This metric is most applicable to organizations operating in microfinance and primarily those who provide lending services.
With an individual lending methodology, a loan is made to an individual borrower who is solely responsible for its repayment.
With a solidarity group lending methodology, groups are used for the disbursement of funds and collection of repayment on loans to either the group as a whole or to the individual members of that group. Borrowers of such groups often bear joint and several liabilities for the repayment of all loans to the group and its members. See the glossary term for additional information.
With a village/self-help group lending methodology, the organization provides access to credit and savings services through group or community managed associations. The organization may lend to the group, which in turn uses this money to lend to its members. See the glossary term for additional information.
With agency banking, the organization extends the network of their branches via authorized agents in rural populations (branchless banking). This comes with the benefits of cost-effectiveness, risk management, product availability, improved financial inclusion, and a wider customer base.
With licensed agents, individuals or businesses are entitled to act on behalf of a financial service provider (FSP) to perform certain financial or administrative transactions. They may have a direct contractual relationship with the FSP or may be contracted by a third party (super agent, aggregator) who maintains a service agreement with the FSP.
With roving staff/mobile branches, mobile units serve customers outside of the branch and in their place of residence or business. They may or may not be associated with a particular branch. Only staff or mobile units that manage deposits or handle opening customer accounts (other than loan origination) should be counted in this category.
With ATMs, customers access services via machines at fixed locations. They may be accessed through different identification means (card, PIN, biometrics) and used for different kinds of cash or non-cash based operations (deposits, withdrawals, transfers, account balance consultation, etc.). ATMs may be proprietary or managed by third parties.
With mobile banking, clients can access services based on unstructured supplementary service data (USSD) USSD or Short Message Service (SMS) communications through their mobile device.
With Internet-based banking services, clients can access services through a personal device (smartphone app, website) using standard Internet protocols.
With merchant POS or a networked merchant, a person acting as a networked merchant uses a physical payment processing device located at the merchant's place of business (e.g. POS) to accept payment for the sale of goods or services from the financial service provider’s (FSP) customers using the customer's FSP identification means (card or other). The merchant could be acquired by the FSP, or simply part of a network enabling the merchant to process payments.
Organizations using an “other” approach to microfinance should describe the method/approach used.
Organizations can refer to the following resources for additional guidance:
-Microfinance Information Exchange: https://www.themix.org/sites/default/files/publications/mix_measuring_the_performance_of_alternative_delivery_channels_2017.pdf
-International Finance Corporation: https://www.ifc.org/wps/wcm/connect/Industry_EXT_Content/IFC_External_Corporate_Site/Financial+Institutions/Priorities/Digital+Finance