Various reasons associated with institutional deficiencies, local market changes and
actual screening processes help explain these outcomes. The realities of setting
‘institutional financial sustainability’ as a principal objective in this microfinance
organisation mean that officers tend to allocate little time to the process of screening.
Pressures on officers’ time for achieving high loan portfolios appear to produce strong
incentives for officers to form groups very quickly, in order to start disbursing loans
as soon as possible and hence attain their personal performance targets. As present
performance criteria take into account financial indicators only, officers place little
importance on information levels amongst group members, degree of group cohesion,
types of prior mutual relationships and actual poverty levels, leading to cases of
highly fragmented groups being formed.