Abstract
Linking the formal financial sector with poor microfinance clients seemed impossible even a decade ago. Increasingly such linkages are emerging, either spontaneously or enforced, and it is crucial that we share the knowledge gained from these efforts. One of India's most innovative linkage models is ICICI Bank's recent 'facilitation linkage' with several NGO/MFIs. This approach is based on a partnership between ICICI Bank and selected NGOs/MFIs, according to which the latter takes the responsibility of monitoring and recovering loans from individuals and self-help groups, but the credit (and most of the risk) is directly between ICICI Bank and the SHG or individual clients. This article explains the model and provides two case study examples, PSS and BISWA, to illustrate this linkage methodology.
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