ABSTRACT
Based on an expanded Schreiner framework, the chapter assessed the demand-side perspective of factors underpinning microfinance product and service design. All eight factors featured prominently with the formal MFI products. Interest rates as cost of access were marginally lower in the Northern Savannah than the national average. Products designed to simultaneously reduce the cost of access and match livelihood needs and wants have added layers of weight to microfinance as an anti-poverty tool. MFIs’ profitability and/or donor partnerships have implications for sustainable microfinance intermediation (length of services). The formal MFIs had the most varied products (product scope) and were integrated in service delivery. Good customer relationships and flexible financial contracts were highly rated. Innovations in product design such as duration of repayments (term to maturity), obtaining loan amounts required, repayment amounts (size of instalment) and minimum balances improved worth. On depth of outreach, loan sizes showed a descending order from the formal to informal MFIs’ clients. On contract enforcement, local norms and ethics surrounding debt issues were randomly used to increase repayment, including the publication of names of defaulting clients. And well-designed products matching needs were generally understood as add-ons. Over 90% of clients claimed benefits exceeded all cost considerations, suggesting microfinance working.
