MICROFINANCE BEST PRACTICES GROUP ON LINKEDINhttp://www.linkedin.com/groups?home=&gid=3040764&trk=anet_ug_hm

BEST PRACTICES DEFINITIONS UTILIZED BY THIS GROUP

In order to fully clarify the BEST PRACTICES concept as well as the role / mission/purpose of this group I am posting below the following definitions:

1. According to Wikipedia “A BEST PRACTICE is a technique, method, process, activity, incentive, or reward that is believed to be more effective at delivering a particular outcome than any other technique, method, process, etc. when applied to a particular condition or circumstance. The idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer problems and unforeseen complications. Best practices can also be defined as the most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people.

A given best practice is only applicable to particular condition or circumstance and may have to be modified or adapted for similar circumstances. In addition, a "best" practice can evolve to become better as improvements are discovered. Despite the need to improve on processes as the environment changes, best-practice is considered by some as a business buzzword used to describe the process of developing and following a standard way of doing things that multiple organizations can use for management, policy, and especially software systems”. (http://en.wikipedia.org/wiki/Best_practice)

2. According to the www.businessdictionary.com BEST PRACTICES are defined as “Methods and techniques that have consistently shown results superior than those achieved with other means, and which are used as benchmarks to strive for. There is, however, no practice that is best for everyone or in every situation, and no best practice remains best for very long as people keep on finding better ways of doing things .” (http://www.businessdictionary.com/definition/best-practice.html)

3. Related to the meaning / role / mission of this group BEST PRACTICE also means to identify the current systems, tools, procedures pertaining to the mainstream banking that could be easily applied (maybe with slight amendments/adjustments) to the microfinance institutions.

Basically, the MFIs products and services (micro-loans, micro-savings and deposits, micro-insurance, payments/transfers, cards, etc) are similar to the ones offered by banking institutions, the only major differences being the vision/mission, the products’ size and the targeted customers. Therefore, taking into account these basic resemblances, I think it is only natural that the basic policies, manuals, procedures, systems, financial models and tools utilized by MFI’s (especially the ones that already reached a certain level of growth / development) to be more or less similar to the ones utilized / implemented in banks. George Staicu – Founder and owner of the Microfinance Best Practices groupSenior banking and microfinance consultant