As a not for profit organization focused on reducing poverty, BMI places high emphasis on the area of modern Social Performance Management. This provides direction in client selection as well as monitoring of client progress. In our work, key areas such as poverty consciousness, client capacity building, client protection and transparency are addressed in a detailed manner. 


BMI Social Performance Initiatives 

Providing the lowest Effective Interest rate among MFI's in Sri Lanka

BMI charges the lowest effective interest rate in the market, apart from the government lending institutions. The BMI rate ranges from 7.5% - 14% flat p.a nominal, with an average blended rate of 12.5%.

Although, the BMI provides such low interest rates to clients, the organization is operationally stable and sustainable.


Measuring the Progression from Poverty

BMI utilizes the Progress out of Poverty Index (PPI) into its daily operations to track the movement of clients out of poverty and target low income segments of the community for provision of loans.


Employment Surveys

BMI utilizes employment surveys to measure the impact of loans provided to BMI clients on employment generation, both directly and indirectly. Since, in addition to the employment generated to the client, the business ventures commenced through BMI loans usually facilitate employment for the client's families and relatives. Findings from these studies are used to gauge success factors in employment creation as well as to monitor the employment trends such as seasonal, part-time, family etc.


Protecting clients from over-indebtedness

BMI also attempt to protect clients from over-indebtedness by taking into consideration the level of debt maintained by each borrower. BMI's credit assessment takes into consideration the level of debt maintained by each borrower. Therefore, lending to individuals with multiple loans is generally discouraged. Moreover, in order to protect the clients from over indebtedness the consequences of multiple borrowing are also discussed during loan cluster meetings to create awareness of its negative implications among clients.


Client capacity building

All BMI clients are provided with free financial literacy trainings to enhance their knowledge on finance and improve understanding and transparency of BMI operations among clients.


Loan Risk Fund (LRF)

In provision of loans, BMI charges 2.5% of the total loan amount from the client for the Loan Risk Fund (LRF). This fund is created to protect the clients and their families in the event of death or permanent disability of the client or the main wage recipient in the family. In such a situation, the loan of the particular client will be written off using the LRF. Any client taking a second loan, has to pay this 2.5% only for the incremental loan amount. If a client obtains the previous loan amount for the second loan, there will be no charge for the LRF.


Berendina Social Protection

'Berendina Suwa Sahana' Scheme operated in 21 branches during the year 2016 contributing Rs. 7.8 Mn as medical and funeral claims (as at 31st December 2016) whilst cumulatively benefitting 3024 clients of BMI and BMIC within the year.

Under this scheme clients are provided with assistance in case of any emergency situations such as sudden illness and funerals. In an illness, the client will be provided monetary assistance of Rs. 250 per day for hospitalization to cover the costs entailed. In the case of a death of a client or a close family member (spouse, father, mother, children or in-laws) further monetary assistance of Rs. 5000 per family, will be provided to partially cover any funeral expenses.

To receive this benefit, a client needs to fulfill three main criteria these being; the need to be an active client who has obtained a BMI loan, over 90% cluster attendance and cluster repayments and no arrears over 1 day in the history of the current loan.

No fees are charged from the clients for this scheme and are provided as a pure benefit to BMI clients.