Poor people need access to a wide range of financial services. They need financial services to seize business opportunities, to invest in home improvements, and to meet seasonal expenses like school fees and holiday celebrations. They also need financial services for life-cycle events, such as weddings and funerals, and to cope with emergencies like the illness of a wage-earner or a monsoon that wreaks havoc on their village.
Most microfinance institutions (MFIs) today offer the poor a limited range of financial services based on microcredit. Although it is not recommended that donors become directly involved in product development, donors need to understand the issue so that they can target and support client-responsive financial institutions. Donors can also disseminate information on new and innovative financial services for the poor.