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== Top 20 FREQUENT WORDS ==
dropout 81
loan 76
borrowers 54
mfis 52
borrower 44
ngos 41
micro 40
research 40
finance 38
mfi 37
ngo 37
rate 35
staff 24
lending 23
cited 22
shocks 22
terms 20
due 18
business 17
factor 17



== DOCUMENT KEY POINTS ==
*research brief on a the causes of the high rate of dropout amongst micro finance borrowers december research brief on the causes of the high rate of drop out amongst micro finance borrowers prepared by civil society human and institutional development programme chip for pakistan financial services sector reform programme pfssrp under contract number pak aidco december plot no
*g project funded by european union opposite national institute for handicapped islamabad house c street f islamabad ph

*the purpose of the study was to find out the causes of a high dropout rate amongst micro finance borrowers of these mfi ngo programmes relate and classify them into factors within and outside the said mfi ngo programmes and to prepare a report that a critically analyses the findings b prioritises the causes for high dropout rates c recommends remedial measures and d proposes innovative lending products

*figure main causes of borrower dropout main causes of borrower dropout organizational design and policy idiosyncratic shocks systemic shocks market driven pull factors competitive mfi industry figure above and table below give an over all non organizational specific ranking of the factors and causes of borrower dropout of mfi ngo borrower in pakistan according to this research

*research brief on a the causes of the high rate of dropout amongst micro finance borrowers december table overall causes of client dropout causes of client dropout ngo a ngo b ngo c overall a

*organizational design and policy sub causes under organisational design and policy series loan processing communicat ion loan product staf f relat ed group relat ed st rat egy design causes causes a loan processing loan processing formalities like presenting an identity card or filling the forms and signing the stamp papers were not cited as a cause of dropping out very frequently

*thus the loan was either used for non productive purpose or the borrower had to find other source of fund to augment the loan for business income generating purpose or when a business was being supported by inadequate capital injection its probability of failure was increased or income generated was sufficient only to repay the loan

*if they don t charge us interest they won t be able to lend us the money source individual interviews of dropout borrowers a mfi c a september this shows that as long as the consumer is attaining a net gain in terms of income out of the loan interest charge and cost of loan do not affect his her decision until the point where the cost is so high that the borrower prefers to switch to other sources of finance including self financing by foregoing other expenditure
*research brief on a the causes of the high rate of dropout amongst micro finance borrowers december however in cases where the income generating activity took off because of the loan thereby increasing the ability of the borrowers to repay comfortably the borrowers did not mind the financial cost of the loan

*the benefits accrued were mainly in terms of facilitating each other in giving each other company while going to the bank to deposit the installment a borrowers who preferred to be lent on individual basis were f those who lived in urban areas f whose groups tended to meet frequently f who had trouble in repayments and thus were talked down by the mfi ngo staff in front of the group members

*sub causes under idiosyncratic shocks inabilit y to repay closed t he spent t he money on lack of abilit y emigration stopped by family due to weak business t o do crisis or t ime to cont inue member business other somet hing else celebration business reasons series within the factor of idiosyncratic shocks the main reason for borrower dropout was the inability to pay due to business failure or general economic condition of the borrower ranging from to from organization to organization

*the following three general scenarios were observed in terms of absence of borrowing need cited as factor of borrower dropout were o the first previous loan was utilized for income generating activity and the purpose of the loan was served or o the previous borrowing was for immediate non productive purpose and was availed by borrower who could afford to repay the loan without additional increase in income chip

*lack of concern among mfis while we felt that this factor should have been of great concern to the practitioners in the micro finance sector in pakistan generally and the management and staff of the mfis ngos specifically our study found a general lack of concern amongst the mfis ngos for client retention
*in case of one mfi ngo where respondents referred to the greatest degree compared to dropout borrowers from other mfis ngos to their knowledge of to their access to and their preference for alternative sources of credit as a cause of dropping out dropping out in favour of alternative credit suppliers formal informal was cited only of the times

*research brief on a the causes of the high rate of dropout amongst micro finance borrowers december o though the field staff was aware of the main causes of borrower dropout in their respective mfis ngo and identified these causes to be related to organizational policies and product design the middle management was of the view that dropout rate was not a serious enough issue to merit any special attention from the organization
*one proxy of this lack of concern is that mfis ngos benefiting from donor funds are not required to report their respective client retention rates for the organization as a whole and for different loan cycles as part of the set of the performance indicators required of the mfis ngos by the donors


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== DOCUMENT WORD ANALYSIS ==
=== Main Category ===
: AlHuda Material\islamic micro


=== KeyWords ===
loan microfin islam borrow programmatic repay busi financial incom officeas finance activa insurable applic service relief policies local amount econometric



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:[[The Demand for Microinsurance in Pakistan by Elizabeth Mcgui]] 



== DOCUMENT REFERENCES ==


=== Number of Pages ===
12


=== Published Date ===
2007-05-26 11:12:16


== Full Document ==


[https://www.hodhood.com/en/HodHoodDocuments/IslamicFinance/IslamicMicro/The%20Demand%20for%20Microinsurance%20in%20Pakistan%20by%20Elizabeth%20Mcgui.pdf Read the Full Document]


[[Category:Islamic Finance]]

[[Category: Islamic Micro]]