Beyond basic credit and savings: Developing new financial service products for the poor

As the microfinance revolution continues, increasing numbers of financial institutions are seeking to diversify the financial services they offer to their clients. In particular there is a growing awareness that improved client-friendly savings facilities provide an essential service for the poor, while at the same time providing more capital for the institution. This paper examines the experience of BURO Tangail, a Bangladeshi microfinance institution committed to providing flexible and responsive financial services to its clients and operating in what is perhaps the most competitive market in the world of microfinance.

The following steps are followed by BURO Tangail when developing a new product:

1. Research and identify needs and opportunities.
2. Design and pilot test.
3. Monitor and evaluate the pilot test.
4. Make revisions and scale-up the implementation.

The paper describes a number of interesting ideas from BURO Tangail and other sucessful financial institutions. For example, the use of Customer Consultative Groups and giving products easily recognisable trade marks and product names such as "Savings of the rural community"(BRI) or "Save to increase your chances" (BAAC).