Microfinance and non-financial services: an impossible marriage

5 September 2017

Microfinance institutions (MFIs) can - in addition to their classic products - develop non-financial services: vocational training, technical assistance, agricultural or health education. The comparative assessment of five Latin American MFIs (including FINCA Peru) shows that performance varies depending on how non-financial services are integrated into usual activities, but that this diversification is possible and even seems to make a great improvement to the quality of the portfolio. However, the choice of the integration model (“linked”, “parallel” or “unified”) and its implementation must be carefully tailored to the context.