The Challenges of Microfinance Innovation: Understanding 'Private Services'

The organization, technology and operation of microfinance have undergone much change and differentiation. Muhammad Yunus, a Nobel-prize winner first demonstrated the possible empowerment of poor people by means of microfinance. Even so, certain cases have indicated that this empowerment does not necessarily occur and that microfinance can even be damaging. In this paper, we describe a case study which describes some of the value clients do receive from an initiative of this kind but notes that this value sometimes lies in unofficial, ‘private’, advice and help. To this end, we conducted an ethnographic study in a microfinance institution (MFI) in Azerbaijan. We found a special pattern of interaction between MFI-staff members and customers, which both regarded as beneficial. Since, from the point of the organization, it was not recognizably part of their work, we call it a “private service”. We think that the identification of similar private initiatives may help to identify new possible synergies between the operation, organization and technology in the microfinance sector. All of them are decisive for the identification of promising human-computer interaction patterns and the design of supportive computer applications.