The Study

Objective of Study• Study commissioned by World Bank in mid-1993

• Study was carried out by Price Waterhouse, in conjunction with an independent development professional

• Study carried out from the perspective of a rural financial institution (RFI)

• To assess the potential market for financial services provided to the rural poor

• Identify constraints to realizing the potential and develop workable approaches to reducing the constraints

• Extending services to the rural poor in a financially sustainable manner

Study Details• 18 months to complete

• Covered 60 villages

• Canvassed 600 rural poor individuals (300 men and 300 women) and 110 rural branch officers using structured questionnaires

• In-depth analysis of over 600 loan records and 750 deposits

Study Components• A survey to determine the pattern of demand and supply of financial

services for the rural poor and women

• Study of financial service providers, particularly of a large public sector bank, with a view to assess the depositor and borrower profile, loan portfolio, recoveries and loan losses, costs and profitability

• A study of institutional practices and attitudes (IPAs) of bank officials who deal with the rural poor and women as clients

• A survey of 'best' practices adopted by the mainstream financial institutions and alternative FIs (such as NGO self-help groups), with a view to cost them and assess their effectiveness and possibility of wider use, to reach the poor

• Development of a set of financial scenarios with various assumptions about policy and operating level changes

Conceptual Framework

If

It scores high on

&ACCESS SUSTAINABILITY

Causal Variables• The framework sought to explain the variation across FIs in

access and sustainability through causal variables described as

'Institutional Practices and Attitudes' (IPAs)

• Internal to the FI

'Mechanisms that Enhance/Thwart Access' (MEAs)• Used by the FI to interface with its clients

Policy Impact On Institutional Performance