Managing Growth of MFIs: ASA Bangladesh - Single-minded Growth

Publication Date: Feb 2008
Published by: MicroSave
Document Type: Case Study

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This paper describes ASA’s growth strategy.

This paper examines the growth of the ASA Bangladesh and finds that ASA did not face many problems as a microlender, since Grameen Bank and BRAC had established the ideas and methods of microcredit among the Bangladeshi public, donors, regulators and potential clients. ASA’s institutional growth was smooth when it began providing microcredit, as it already had a large staff, a secure leadership and many years of donor funding.

The paper suggests that ASA has flourished due to expanding demand from a large client pool for basic service that ASA offers: a high-volume, low-value, basic general-purpose loan, repaid in weekly installments. The products and its delivery have not changed much in ASA’s 16 years of business. The paper also states that ASA has:

• Focused on a single goal of providing microloans and recovering them;
• An economical and decentralized governance structure;
• Maximized the profits of its branches through the “self reliant model”;
• Is not dependent on donors or commercial creditors;
• Makes budgeting plans only for the short term and changes them quickly to suit circumstances.

Finally, the paper makes suggestions for future growth for ASA. These include:

• Improving its current credit product;
• Transforming into a new legal entity that can accept savings;
• Developing a range of deposit services for the general public;
• Allowing loan disbursements to individual businesses.