Lecture 19 - Commercial banks as microlenders. The following will be discussed in this chapter: Incredulity, ignorance, and indifference; microlending needs its own room; models of downscaling. | Commercial Banks as Microlenders Summary of the Last Lecture As can be seen from the findings of last lecture, the advantages commercial banks can capitalize on arise from their market position, while most of the obstacles involve the need to change internal ways of thinking and operating. Summary of the Last Lecture Successful strategies provide a structure that uses the positional advantages of banks while preventing the attitudes and processes of traditional banking from hobbling microfinance. Incredulity, Ignorance, and Indifference I can summarize the reasons banks have not served the poor in three words: incredulity, ignorance, and indifference. —Michael Chu, Harvard Business School Incredulity, Ignorance, and Indifference I can summarize the reasons banks have not served the poor in three words: incredulity, ignorance, and indifference. —Michael Chu, Harvard Business School Incredulity, Ignorance, and Indifference It is not a unique criticism to say that many people inside . | Commercial Banks as Microlenders Summary of the Last Lecture As can be seen from the findings of last lecture, the advantages commercial banks can capitalize on arise from their market position, while most of the obstacles involve the need to change internal ways of thinking and operating. Summary of the Last Lecture Successful strategies provide a structure that uses the positional advantages of banks while preventing the attitudes and processes of traditional banking from hobbling microfinance. Incredulity, Ignorance, and Indifference I can summarize the reasons banks have not served the poor in three words: incredulity, ignorance, and indifference. —Michael Chu, Harvard Business School Incredulity, Ignorance, and Indifference I can summarize the reasons banks have not served the poor in three words: incredulity, ignorance, and indifference. —Michael Chu, Harvard Business School Incredulity, Ignorance, and Indifference It is not a unique criticism to say that many people inside banks regard BOP clients with incredulity, ignorance, and indifference. Such attitudes have long been widely held and deeply entrenched, not just among banks, but in almost all formal Incredulity, Ignorance, and Indifference institutions—in fact they often characterize societal attitudes at large. It is important to acknowledge these attitudes openly because they pose real obstacles that banks must overcome before they can carry off microenterprise lending successfully. Incredulity, Ignorance, and Indifference Incredulity that low-income people can be good customers can be addressed with firsthand examples, such as Mibanco in Peru, a microfinance institution that has become a commercial bank. Mibanco’s strong profitability and resilience helps explain why banks have entered microlending in Latin America. Incredulity, Ignorance, and Indifference Ignorance of how to serve the market requires learning from experienced practitioners, such as ACCION, or from staff hired away from competitors. .
