Reflections on Operating Microenterprise Services from Within CDFIs

This forum examines characteristics of microenterprise programs in multi-service Community Development Financial Institutions (CDFIs). This paper uses information drawn from the experience and observations of senior staff at four FIELD Institutional Model grantees. They identified the following advantages of their institutional structure:

• Multiple strategies for low-wealth individuals to accumulate assets;
• Cost-efficient lending operations;
• Skilled managers of risk in microlending;
• High-quality business training and technical assistance (TA) to clients;
• Sophisticated management information systems.

The study identified challenges in the areas of:

• Balancing training and financial sustainability;
• Scaling up;
• Integrating microenterprise services into the larger organization;
• Retaining and attracting skilled staff;
• Facing regulatory scrutiny.

Grantee recommendations included:

• Commit to cross-selling services;
• Regularly assess the low-income market;
• Explore income-generating opportunities;
• Build partnerships with trainers and TA providers;
• Assess and document performance.