Institution Building and Professionalization

The GLS Bank supports the MFI in developing its business-modell for disbursing microcredits. The microcredit sector in Germany is still young and the MFIs are currently exploring new ways of giving out loans to non-bankable people and disadvantaged target groups. Those MFIs that succeed to fulfill the following criteria: (a) development of a market-oriented credit product based on the people’s needs, (b) having efficient processes in place that guarantee a sustainable business model, (c) having a sound credit portfolio with low risks will be specially supported under the flagship programme.

Further, to professionalize the german MFIs, the ministry is currently running a transnational exchange project on best-practice sharing with other European countries. In this regard, so called microfinance scouts visit various European countries over a period of one year to gather new ideas for creating sound processes and procedures within the institution. At the end of the project a handbook will be available which will especially help new MFIs to implement best-practice right from the very beginning.