participatory credit project
Small enterprises in the agriculture, trade and services sectors are most susceptible to changes towards financial sector liberalization. The asset bases of small businesses often fail to meet the stricter collateral requirements of the new market driven financial system. The individual loan requirements in these enterprises also routinely fall short of the revised minimum prescribed.
Keeping the interests of small borrowers in mind should be an overriding aspect of a successful financial sector reform agenda. Giving voice to and creating space for small enterprises and the poor in the operational policies of credit institutions are essential elements of all civil societies. Consulting small businesses and the poor and enabling them to participate in designing credit delivery can also reduce the default risk through better ownership and shared objectives.
Creditwatch provides guidance and support services for banks as well as non-banking companies with a substantial small-business client base and credit managers interested in improving participatory credit practices. Creditwatch’s Participatory Credit Project helps MFIs and financial institutions to improve and better target their credit services to small business and the poor.