This paper traces the development of microfinance products in recent years following the success of the Grameen Bank.
The paper:
* Presents key developments in microfinance in the Philippines and in other countries based on studies and documented experience obtained by the Microfinance Council of the Philippines (MCP),
* Provides the framework for the review of literature,
* Describes the ‘Grameen Bank’ approach to microfinancing,
* Discusses international experiences in the development of successful microfinance products,
* Presents the Philippine experience in microfinance product development, focusing on:
o Key MFIs and their approaches to microfinancing,
o Microfinance products and development trends,
o The product development process.
The paper states that:
* Microfinance products developed in the last two decades in the Philippines, have increased in complexity and sophistication, and have become more attuned to the needs of the poor.
* The product development process includes the following key activities:
o Conceptualization and planning,
o Pilot testing,
o Replication and expansion.
* The factors affecting product development include:
o The condition of the regulatory environment in which the MFI operates,
o Competition,
o Market development.
The paper concludes that further research and systematic documentation in the following areas would help MFIs in reaching their goal of reducing poverty through sustainable microfinancing:
* Actual processes undertaken,
* Challenges faced,
* Lessons learned,
* Identification of what worked and what did not.
