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					CGAP CLIENT SURVEY

Executive Summary of Research Findings



Prepared by Nellie Gregorian


FEBRUARY 2007 | NEW YORK
Background

In October 2006 CGAP commissioned a client survey examining opinions and perceptions of CGAP strategy
and performance among its key stakeholders. The survey examined respondents’ reactions to the following
issues:

          •   The overall context of microfinance

          •   Evaluation of CGAP strategy and performance

          •   Perceptions of CGAP role and identity

          •   Evaluation of CGAP communications with stakeholders



Methodology

A link to the survey was sent to CGAP’s entire contacts database, representing a broad mix of CGAP
members, MFIs, donors, private sector partners and other industry representatives.

The survey was also made available on CGAP’s Web site and the following industry sites: the Microfinance
Gateway, DevFinance and Microfinance Practice. A total of 621 respondents participated in the survey.

Analysis was conducted by an independent public opinion researcher, Nellie Gregorian, president of Fluent,
a New York-based public opinion and market research firm.



Key Findings

•         Research suggests that CGAP enjoys a high level of approval and credibility among its key
          stakeholders.

•         CGAP’s Phase III strategic goals are considered relevant and important by all constituencies, and
          they are perceived to address the greatest obstacles to achieving widespread access to microfinance.

•         CGAP’s performance in meeting these goals is also evaluated very positively. CGAP is perceived to
          be effective in almost every area of its work.

•         However, there is still room for improvement in some areas.

•         CGAP’s stakeholders are also relatively well informed about its core equity and consider it as a
          “knowledge resource center” and a “standard setter for microfinance.”

•         CGAP’s publications and knowledge products are considered among the most important and
          influential sources in the field of microfinance.

•         CGAP enjoys high approval ratings across all constituent groups. Significantly, the more familiar
          stakeholders are with CGAP’s work the more positive is their appraisal of its contribution to the
          field of microfinance.


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•        While most of the views and evaluations of CGAP were extremely positive, answers to open-ended
         questions suggest that there is a minority of respondents who are critical of CGAP’s work, ideology
         and cultural orientation.

•        Some of these critical voices suggest that CGAP’s “single-minded,” “dogmatic,” “ivory-tower”
         approach may hinder its effectiveness in promoting a diverse, inclusive and thriving environment
         for microfinance.

•        The overwhelmingly positive quantitative data indicates that voices of “dissent” are few, and even
         the most critical respondents (barring a few) were supportive of the CGAP’s mission and goals, and
         offered quite a few recommendations that might further improve CGAP’s standing in the industry.



Research Findings: Microfinance
•        Stakeholders were asked to identify the most critical elements in increasing access to microfinance,
         as well as the greatest obstacles to achieving widespread access to microfinance.

•        Building the financial market infrastructure for microfinance (i.e., banking system, local markets,
         payments systems, rating agencies, credit bureaus) emerged as the greatest need of microfinance
         (63%) and the lack thereof as the greatest obstacle (64%).



                       Most Critical Elements in Increasing Access to Microfinance



                 Building the market infrastructure                           63%
    Developing a greater range of products to suit
                                                                            54%
                            poor people's needs
    Concentrating on more remote or rural clients                           43%

    Working on government policy and regulation                       39%
          Experimenting with new technology for
                                                                      37%
                             delivering services
                         Increasing funds for MFIs               32%
            Augmenting consumer protection and
                                                            19%
                            financial education
                                              Other     12%




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                The Greatest Obstacles to Achieving Widespread Access to Microfinance


     Lack of the financial market infrastructure for
                                                                                  64%
                                       microfinance
        Poor government policies and regulations                             51%

    Operational costs of making small transactions                           51%
     Lack of management or loan officer capacity
                    of retail financial institutions                    44%

                       Lack of funds for on-lending          30%
     Lack of understanding of microfinance by the
                                                             25%
                                    general public

        Lack of industry standards/good practices            22%

                                             Other      13%




Evaluation of CGAP strategy and performance

•        Stakeholders have a very positive view of CGAP and the role it plays in microfinance. The
         overwhelming majority of respondents (85%) agree that “CGAP’s contributions to microfinance
         are very important to the success of microfinance globally.”

•        In the words of one respondent, CGAP is characterized by “deep credibility, deep and wide expertise,
         commitment to clear communications, unrelenting commitment of staff.”

•        Stakeholders were also asked to reflect on CGAP’s strategy -- both the importance of its goals and
         CGAP’s effectiveness in meeting them.

•        Respondents gave high ratings to CGAP for identifying relevant themes for Phase III and doing a
         good job at achieving progress in these areas.

•        However, comparison of effectiveness and importance scores indicates that there is still room for
         improvement, particularly in the following areas:

         o   Promoting ways to reach poorer clients;

         o   Promoting a diverse range of institutions delivering microfinance;

         o   Improving aid effectiveness and donor coordination;

         o   Supporting new delivery technologies that cut delivery costs.




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Advice from Stakeholders

The research study indicates that most stakeholders hold CGAP in high esteem. They have given it an
overwhelmingly positive evaluation. Some of the stakeholders, however, had some constructive criticism and
advice to offer. These are their recommendations:



Closer alignment with the goals/needs of microfinance partners on the ground

“CGAP at the moment has done creditably well. For improvement, CGAP may have to visit, come closer to MFI
partners beyond the publications.”

 “CGAP has been in the forefront in the R&D and dissemination of VITAL information to MFIs and other
stakeholders globally. In order to accelerate your efforts CGAP could think of a one-man-office in all potential
countries that use microfinance as a powerful socio-economic tool. This would be a cost effective way of
establishing a one-to-one relationship with most of the MFIs globally.”

 “CGAP is very good in what it is doing now. I guess providing access to information/ knowledge/best practices/
serves as a guide to Microfinance practitioner like me. However, some, if not most of the initiatives are donor-
demanded or focused or funded. There's less focus/attention to practitioners or people in the field/mission. Some
of the notes/articles are documentation and reports from an evaluator's point of view.”



More focus on countries and regions with a less developed microfinance infrastructure

“CGAP is active in a selective number of countries or there appears to be a focus in these countries. Other
countries where MFI's are not active CGAP has little presence. CGAP could be used to provide support to grow
MFI's in these countries rather than focus on countries with a developed MFI industry and regulations.”



More clarity about its mandate, role and point of view

“It could be more objective - I feel that perhaps at times, although it is natural given its position, it stands too
much on the side of donors and not enough on the needs of the poorest.”

 “CGAP should reduce its scale and get its hand out of the demand side of this industry. In Spanish there is a
saying: ‘nadie puede ser juez y parte’ - meaning ‘no one can be both judge and plaintiff.’ CGAP wants to play
that role. CGAP is the advocate of the funders; it should play that role only and not try to become arbiter and last
judge of the microfinance industry.”



A less dogmatic approach and more sensitivity to country-specific needs and circumstances

“I believe CGAP needs to become more open minded if it wants to be a truly global MF player. In China, CGAP
is not much respected. It is seen as trying to impose one view (financial sustainability) while being very far
removed for the field. In China there is no single large scale financially sustainable MFI and few MF providers are
aiming for that. It just does not make sense, people refuse to pay such interest rates, and such MFIs would never


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be able to serve the poor in remote ethnic minority regions. MF has not been as successful globally as is made to
believe, it should not divert attention from other developmental needs. Not everyone who has limited access to
credit needs credit as a priority. CGAP should listen more and preach less, until it really understands the
situation. Each county, each region, each province, county, village and person is different...there is no one theory
fits all!”



Serve as a watchdog and be unrelenting in its advocacy of microfinance for the benefit of the poor

 “In the name of microfinance, a number of restrictive practices are being adopted by some of the so-called MFIs.
These should be highlighted and such institutions should be blacklisted. CGAP, being an arm of World Bank, has
the responsibility to work like a watchdog and make MF an efficient way of reaching the poor.”

 “It has both the resources and skills to help sustain and promote greater efforts to reach the poor with financial
services, but it doesn't seem to have much impact beyond those of us who are already believers in microfinance.”



Should make its successes and accomplishments known

“I think CGAP is a wonderful organization and they should toot their own horn to be better known. ACCION
and Grameen are always doing this. Is it the culture of CGAP (derived from the WB) that stops CGAP from
becoming a ‘Microfin Star’ and be an accelerator of the microfin future?”




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