Microfinance Product Costing Tool
The number of services offered by microfinance institutions (MFIs) to their clients is remarkably increased, mainly because an augment of competition among microfinance actors and a greater interest in satisfying the clients' needs. However, the costs of microfinance remain high and there are very few MFIs able to determine the costs of their products and consequently whether they are viable.This paper presents two ways of calculating administrative costs of microfinance services and addresses the following issues:
- What does the product costing tool do?
- Who is the audience for this tool?
- How is this tool structured?
Finally, the paper illustrates how to use the product costing information to analyze the sources of costs for decision-making. Costs are analyzed according to general categories, customer segment analysis, and total cost and viability analysis.
