by Trevor Kwong - Trends/Challenges -

MICROCAPITAL BRIEF: Study by ACCION’s Center for Financial Inclusion Outlines Best Practices of For-Profit Microfinance Institutions (MFIs) to Preserve Social Objectives

Elisabeth Rhyne, the Managing Director of the Center for Financial Inclusion, an organization founded by US-based nonprofit ACCION International, wrote an article that recently appeared on The Huffington Post website [1] outlining best practices that could help nonprofit microfinance institutions (MFIs) keep their social mission while transforming themselves into for-profit operations.

Citing a recent study published by the Center for Financial Inclusion [2], she recommends that MFIs keep their original team of sponsoring organizations while blending the original staff with new managers to openly discuss the different interests of key players such as investors, sponsoring organizations and managers. In addition, the author also urges NGOs to set up “prenuptial agreements”, to detail from the start the division of property or personnel to take place in the event that the organization decides to become for profit.

About the Center for Financial Inclusion [3]:
The Center for Financial Inclusion was founded in 2008 by ACCION International, a private, US-based nonprofit organization founded in 1961. The Center is dedicated to connecting the microfinance community with the private sector to promote access to financial services for low-income groups. The Center conducts research and hosts events with a focus on the double bottom line (social and financial) and inclusive finance.

By Trevor Kwong, Research Assistant

Additional Resources and Sources:
[1] Source Article: The Huffington Post: Microfinance: Keeping the Mission When Non-Profits Become For-Profits
http://www.huffingtonpost.com/elisabeth-rhyne/microfinance-keeping-the_b_675813.html

[2] Center for Financial Inclusion: Aligning Interests- Addressing Management and Stakeholder Incentives During Microfinance Instution Transformations:
http://www.centerforfinancialinclusion.org/Document.Doc?id=747

[3] Microcaptial Universe: Center for Financial Inclusion:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Center+for+Financial+Inclusion+(CFI)

[4] MicroCapital.org: MICROCAPITAL BRIEF: World Bank, ACCION’s Center for Financial Inclusion Host Discussion on Access to Microfinance for Disabled People:
https://www.microcapital.org/microcapital-brief-world-bank-accions-center-for-financial-inclusion-host-discussion-on-access-to-microfinance-for-disabled-people/

Universe and add your entry to the wiki athttps://www.microcapital.org/microfinanceuniverse/tiki-index.php

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