Microfinance, Cooperatives and Microinsurance as Sustainable Solutions

Microfinance is being increasingly recognized as a sustainable solution for developmental interventions. In fact, the success of some innovative experiments to alleviate poverty in countries has proved that small credit given to the poor can effectively increase their income-level through entrepreneurship and skill support development. In addition to this, it has also been noted that catalyst agencies such as NGOs also benefit from this new practices of sustainable development. NGOs are not seen merely as passing on the donor agenda to the community in a microinsurance project; they are, in fact, looked upon as professioanal changemakers, actively delivering services to the poor and benefiting from them. The benefit not only motivates them for extending the services, but also improves their own sustainability. There are many examples like SPANDANA in India and Grameen Bank in Bangladesh, which have not only succeeded in providing innovative and sustainable services to the poor, but also helped themselves in creating sustainable service-oriented outlets. NGOs, who have gained profits by providing microcredit services to the poor, have managed to build resources for their own organization in such a manner that they are now funding their own developmental projects, without being dependent upon donor agencies.

Microfinance can evolve further into new business directions for the NGOs. The end-result of all microfinance operations is the establishment of a strong and sustainable community-based organization. In order to manage this organization, cooperative management education can be introduced by the NGO for greaer sustainability and expansion of the services. Further to cooperatives, we have microinsurance that is slowly gaining the momentum to become another big community-based enterprize in developing countries. Here we discuss the ways and means to develop Microfinance, Cooperatives and Microinsurance development in a community.