Reflection on the Unsung Heroines: Profiles of Four Female Microcredit Clients With the responsibility of raising five children,

Gloria decided to augment her husbands meagre income by earnings through washing other peoples clothes. Later on Gloria started on her own business of selling barbecue after getting loan from MEDFI on flexible terms. She utilized the money to finance both her capital needs as well as household needs. If we look at the nature of their family income source, her husband earns 300 Pesos per week through tricycle driving; however this income suffers from irregularity and inconsistency. In case of Gloria, changing her profession from washing to selling barbecue provided her to increase their cash flows and to ensure that even in slowdown; she is able to meet her daily needs. Stella is Glorias daughter, also owns her business of selling cooked snack food and soft drinks starting in the early afternoons along the roadside. Her husband worked in a construction firm earning 1000P per week but since his earnings was linked to available projects in hand, it was estimated that he had a steady cash flows for 6 months in a year. In MEDFI, Stella recognised a potential capital source to finance her business. Both Gloria and Stella devote their success to MEDFI for lending them loan in easy and flexible terms that helped them to support their business as well as their daily consumption needs. Despite their husbands irregular stream of cash flows, the ladies have strengthened their position through their earnings. Issues Identified in context with the case study The main theme of the discussion is that Gloria and Stella represent a certain segment of the society where there is dire need of financial inclusion. First of all the issues identified in the case are Irregular source of cash inflows, security issues on account of poor savings, psychological issues on the absence of land rights on which they have built their homes, safety issues in the case of unforeseeable events like floods etc., lack of formal sources of financing forcing the potential customers to either borrow from money lenders at high rates or hold back their investment plans. Role of MEDFI in shaping the lives of unsung heroines In the case, we get to observe how Microenterprise Development Foundation Inc. (MEDFI) was able to overcome such issues. It basically understood the customer needs and therefore designed its products to suit them on flexible terms. It basically provided the heroines in our case with the confidence and the capital requirement not only to finance and sustain their business but also to address their household needs contributing towards consumption smoothening. Having insurance with MEDFI helped Gloria to address her medical needs. The businesses in which Gloria and Stella are involved cannot be scaled, since it operates in a very niche and limited market. The only way to make money is to enter into diversified streams as in case of Gloria, however due to lack of guidance; these businesses are more prone to uncertainty of cash flows. Here, MEDFI can also provide advisory services as to how to better utilise the money.

Understanding customer requirements Formal sector banks provide loans to customers based on his credit rating rather than his requirements. In that case, customer is bound to borrow the difference from informal sources at high interest rates. At the time of payment recovery, the customer prefers to pay the informal sources to lower the burden of interest rates. This behaviour of customer needs to be captured by the formal sector banks based on the customers consumption pattern. Role of formal sector to create financial inclusion Looking at the formal sector, the procedures and standards adopted by the formal sector organisation for determining the financial credibility while making out loans may not warrant them as potential customers. We also observe that the financial sector solutions to address these issues are more focused on the structural issues rather than market driven, product innovation driven. The need of the hour is to change the way the formal sector conducts and communicates its business in this segment of the society. We need to understand if these financial institutions support these customers not only to groom their business but also to provide them stability and sustainability, in return they can achieve their loyalty and establish continuous recover of loan in form of instalments. Conclusion To pull people out of poverty, the need is to provide a stable job. There are many populist schemes run by the government but the success is still under question. Identifying the vulnerable aspects such as drought, health, and social events that cause the poor to revert back to poverty and providing a safety cushion to them, can perhaps help them to move forward. Speaking of financial inclusion, formal sector need to design new financial products better suited to this segment of the society which is yet to be banked upon fully.