CHAPTER 5

DISCUSSION/CONCLUSION

Based on the 6 samples research in year of 2006-2007 we can conclude

that:
1. As a microfinance institution, all of these institutions have the
same intention that is to help and develop their community in
their own ways. Their goals are to increase poor people income
so they can increase their quality of living.
2. Target and model need to be aligning each other with the
institutions goals. Each offer different approach and control. The
success of microfinance programs is determined by the proper
match among target, model, and institution’s goals.
3. Group model is better than individual model because it is less
risky than individual model. In group model there is one back-up
system to minimize NPL risk that is the group it self compare to
individual who doesn’t have any. Overall scheme from building
communities and counseling, group model gives the best support
to accomplish microfinance objective.
4. Microfinance institution should have strict policy by not easily
tolerate any NPL from the member. All process in the scheme
especially monitoring and controlling could not easily be bend by
their member. The problem of not having strict policy is that
member will not have incentive to follow the rules.
5. Collateral have not very significant effect in guaranteeing low rate
of Non Performing Loans. This can be seen by the better
performance of other non collateral microfinancing institutions.
6. The high interest rates of MFI have a good purpose and are given
back to the people through counseling and other empowerment
programs. Different from money lenders and conventional bank
that are only want good result from business and their funds are
returned with interest.

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Suggestion:
1. To get more holistic & valid data then next research should
expand the scope and number of samples, and time horizon.
2. Next research should also compare the result of local scheme with
international scheme finding/research. The comparison can see
the difference between local to international scheme and see the
development of microfinance in the world.

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