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Lending and Befriending
Can a $25 loan change someone's life? In certain countries, absolutely. Here's how Kiva lets you lend directly to entrepreneurs in the developing world.

Five Talents Joins a Consortium of Fellow Christian NGOs to Support Microfinance Program in Sudan

Five Talents, a Christian development organisation supporting microfinance, has joined a consortium of organisations from the Christian micro-enterprise development (CMED) industry to fund a micro-credit program in Southern Sudan. The village banking initiative in the Wau Diocese was started in 2005, providing adult education, local savings mobilization, business development training, small business development investing and rural micro-credit provision.

Mann Deshi: A Micro-Business School for rural women
The Mann Deshi Business School for Rural Women (MDBS) is a new Micro-business school program launched in India that provides training in technical, financial and marketing skills to women with no formal education and to girls who have dropped out of high school, allowing them to start and improve their own small enterprises.

7.3.1 Pro-poor development: Mainstreaming skills development for the poor
Creating a training system that effectively supports the needs of the poor can only be done as part of a broader pro-poor development strategy. Training on its own cannot solve the fundamental underlying problem of the lack of productive employment opportunities for EVSE. It must be linked to broader processes of economic and social change.

Can Technical Service Providers Add Significant Value?
The second major hypothesis behind MicroStart is that technical assistance from an experienced microfinance organization or consulting firm can help build the capacity of small, young MFIs.

Fonkoze - Educating Individuals to Become Self Sustaining
Fonkoze, Haiti’s largest microfinance institution, is another good example of integrating microfinance with other services such as medical treatment, remittances, empowerment, insurance against risk and natural disasters, health insurance, and in particular, education to help improve clients’ situations and contribute to the overall economy.

Inhibitors to Success

At its core, microfinance is not terribly different from mainstream consumer finance. From accessing funding to managing the disbursement and collection of funds, microfinance operates like any consumer finance business. But because microfinance serves a very different client segment – the world’s poor – we cannot ignore the different set of challenges these clients face and the implications these challenges have on the organizations serving them.

Overview of Microfinance
Because the term microfinance is used in many different contexts, it can sometimes be oversimplified and viewed in a skewed or narrow perspective.

Achieving Financial Stability
Marie Francois' story - Haiti

IV. Principle III: Reinforce Microfinance to Advance the African Private Sector
Key Principles for an African Model of Microfinance

IV. Introduction - MICROFINANCE IN AFRICA: THE MODEL

The last twenty years have seen significant advances in understanding and providing financial services to better advance development and eradicate poverty. This includes providing the financial means to save, access credit, and start small businesses, with the potential to enhance community development, as well as local and national policy making. When properly harnessed and supported, microfinance can scale-up beyond the micro-level as a sustainable part of the process of economic empowerment by which the poor can lift themselves from poverty.

II. How Can MicroFinance Succeed In Africa?

African microfinance is as diverse as the continent itself. An array of approaches have been used, ranging from traditional group-based systems, to specialised lending by banks and funded by international nongovernmental organisations (NGO) financial intermediaries. Consequently, examples of African microfinance offer an array of lessons of what works and doesn’t work. Drawing from these lessons, and those from non-African examples, OSCAL developed a Microfinance model based on four principles:

I. WHAT CAN MICROFINANCE DO FOR AFRICA?

When properly harnessed, microfinance offers a variety of benefits to the African people. Foremost, microfinance initiatives can effectively address material poverty, the physical deprivation of goods, services, and the income to attain them. When properly guided, the material benefits of microfinancing can extend beyond the household into the community. At the personal level, microfinance can effectively address issues associated with “non-material poverty, which includes social and psychological effects that prevent people from realizing their potential.

Microfinance as Key Poverty Reduction Strategy Paper (PRSP) Component: The Majority of PRSPs Include Access to Financial Services

By the late 1990s, it was clear that something was not working in the field of development. Deteriorating economic growth in Sub-Saharan Africa, the failure of Structural Adjustment Programmes used by the World Bank and International Monetary Fund (IMF) and the question of how to link debt relief to poverty reduction led policy makers to adopt the Poverty Reduction Strategy Paper (PRSP) initiative in September 1999.

Reaching the MDGs: A Concrete Look at the Challenge of More Effective Aid (Not Just More Aid)
Some acronyms never make it into the mainstream, and forever remain part of the secret language of a closed group of people that share the same profession, hobby or interest. But everyone is talking about the MDGs, or Millennium Development Goals.

Financial Sector Development as an Essential Determinant for Achieving the MDGs: Increasing Private Credit Shown to Reduce Income Inequality
Whether or not one has access to private credit is a litmus test for wealth or poverty. If you're rich, you have it, and can use it to get richer. If you're poor, you don't have access to it, and you remain poor. Conventional wisdom suggests that building up the financial sector has little effect on this gap.

IMAGE Project in South Africa Proposes Use of Microfinance in Struggle Against HIV/AIDS Infection
IMAGE provides women with short term business loans of up to USD 1,300 operating on the presumption that an increase in earning power will encourage women to be more vocal at home, confronting unfaithful husbands about issues such as condom usage.

IMAGE Project in South Africa Proposes Use of Microfinance in Struggle Against HIV/AIDS Infection
IMAGE provides women with short term business loans of up to USD 1,300 operating on the presumption that an increase in earning power will encourage women to be more vocal at home, confronting unfaithful husbands about issues such as condom usage.

Managing trade-offs
Achieving both profitability and strong social performance is the ultimate promise of microfinance. It is not impossible, but neither is it easy, and relatively few micro-lenders are there yet.

Managing trade-offs
Achieving both profitability and strong social performance is the ultimate promise of microfinance. It is not impossible, but neither is it easy, and relatively few micro-lenders are there yet.

The wider impacts of microfinance
Most MFIs seek to promote the business of their clients and thereby raise client incomes. Some MFIs also invest in services intended to achieve direct social impacts in the form of raising awareness on health, encouraging children's education, promoting women's empowerment within households and so on. MFI achievements on this front have been relatively well-documented.

The wider impacts of microfinance
Most MFIs seek to promote the business of their clients and thereby raise client incomes. Some MFIs also invest in services intended to achieve direct social impacts in the form of raising awareness on health, encouraging children's education, promoting women's empowerment within households and so on. MFI achievements on this front have been relatively well-documented.

Microfinance and the MDGs
Microfinance, and the impact it produces, goes beyond just business loans. Poor people use financial services not only for business investment in their microenterprises but also for health and education, managing household emergencies, and meeting the wide variety of other cash needs that they encounter.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

Realising the potential of microfinance
Microfinance is a key strategy in reaching the Millennium Development Goals (MDGs) and in building global financial systems that meet needs of most poor people. Although microfinance has demonstrated the potential to reduce poverty, its impacts have varied. Perhaps as a result of these inconsistencies, few donors have prioritised microfinance in their strategies to achieve the MDGs.

The State of the Microcredit Summit Campaign Report 2006
In 1997, RESULTS Educational Fund, a U.S.-based non-profit organization, organized the Microcredit Summit. The summit focused on catalyzing the international development community to recognize that scaling up microfinance was essential to reaching the Millennium Development Goals and creating a just world.

The State of the Microcredit Summit Campaign Report 2006
In 1997, RESULTS Educational Fund, a U.S.-based non-profit organization, organized the Microcredit Summit. The summit focused on catalyzing the international development community to recognize that scaling up microfinance was essential to reaching the Millennium Development Goals and creating a just world.

What is the role of the financial regulator in supporting the development of microfinance? FAQ
Many feel that the most important role of a financial regulator in supporting the development of microfinance is to create an alternative institutional type that allows sound financial NGOs, credit unions, and other community-based intermediaries to obtain a license to offer deposit services to the general public and obtain funds through apex organizations.

What is the role of the financial regulator in supporting the development of microfinance? FAQ
Many feel that the most important role of a financial regulator in supporting the development of microfinance is to create an alternative institutional type that allows sound financial NGOs, credit unions, and other community-based intermediaries to obtain a license to offer deposit services to the general public and obtain funds through apex organizations.

What is the government’s role in supporting microfinance? FAQ
Governments have a complicated role when it comes to microfinance. Until recently, governments generally felt that it was their responsibility to generate development finance', including credit programs for the disadvantaged. Twenty years of insightful critique of rural credit programs revealed that governments do a very bad job of lending to the poor.

What is the government’s role in supporting microfinance? FAQ
Governments have a complicated role when it comes to microfinance. Until recently, governments generally felt that it was their responsibility to generate development finance', including credit programs for the disadvantaged. Twenty years of insightful critique of rural credit programs revealed that governments do a very bad job of lending to the poor.

What is the government’s role in supporting microfinance? FAQ
Governments have a complicated role when it comes to microfinance. Until recently, governments generally felt that it was their responsibility to generate development finance', including credit programs for the disadvantaged. Twenty years of insightful critique of rural credit programs revealed that governments do a very bad job of lending to the poor.

What is the government’s role in supporting microfinance? FAQ
Governments have a complicated role when it comes to microfinance. Until recently, governments generally felt that it was their responsibility to generate development finance', including credit programs for the disadvantaged. Twenty years of insightful critique of rural credit programs revealed that governments do a very bad job of lending to the poor.

What is the government’s role in supporting microfinance? FAQ
Governments have a complicated role when it comes to microfinance. Until recently, governments generally felt that it was their responsibility to generate development finance', including credit programs for the disadvantaged. Twenty years of insightful critique of rural credit programs revealed that governments do a very bad job of lending to the poor.

Can microfinance be profitable? FAQ

Yes it can. Data from the MicroBanking Bulletin reports that 63 of the world's top MFIs had an average rate of return, after adjusting for inflation and after taking out subsidies programs might have received, of about 2.5% of total assets. This compares favorably with returns in the commercial banking sector and gives credence to the hope of many that microfinance can be sufficiently attractive to mainstream into the retail banking sector. Many feel that once microfinance becomes mainstreamed, massive growth in the numbers of clients can be achieved.

Can microfinance be profitable? FAQ

What is a Microfinance Institution (MFI)?

Quite simply, a microfinance institution is an organization that offers financial services to low income populations. Almost all of these offer microcredit and only take back small amounts of savings from their own borrowers, not from the general public. Within the microfinance industry, the term microfinance institution has come to refer to a wide range of organizations dedicated to providing these services: NGOs, credit unions, cooperatives, private commercial banks and non-bank financial institutions (some that have transformed from NGOs into regulated institutions) and parts of state-owned banks, for example.

What is a Microfinance Institution (MFI)?

When is microfinance NOT an appropiate tool? FAQ
Microfinance increasingly refers to a host of financial services—savings, loans, insurance, remittances from abroad, and other products. It is hard to imagine that there would be any family in the world today for which some type of formal financial service couldn't be designed and made useful. But the fact of the matter is, that in most people's mind, "microfinance" still refers to microcredit.

When is microfinance NOT an appropiate tool? FAQ
Microfinance increasingly refers to a host of financial services—savings, loans, insurance, remittances from abroad, and other products. It is hard to imagine that there would be any family in the world today for which some type of formal financial service couldn't be designed and made useful. But the fact of the matter is, that in most people's mind, "microfinance" still refers to microcredit.

How does microfinance help the poor? FAQ
Experience shows that microfinance can help the poor to increase income, build viable businesses, and reduce their vulnerability to external shocks. It can also be a powerful instrument for self-empowerment by enabling the poor, especially women, to become economic agents of change.

Who are the clients of microfinance? FAQ

The typical microfinance clients are low-income persons that do not have access to formal financial institutions. Microfinance clients are typically self-employed, often household-based entrepreneurs. In rural areas, they are usually small farmers and others who are engaged in small income-generating activities such as food processing and petty trade. In urban areas, microfinance activities are more diverse and include shopkeepers, service providers, artisans, street vendors, etc. Microfinance clients are poor and vulnerable non-poor who have a relatively stable source of income.

Who are the clients of microfinance? FAQ

What is microfinance? FAQ

To most, microfinance means providing very poor families with very small loans (microcredit) to help them engage in productive activities or grow their tiny businesses. Over time, microfinance has come to include a broader range of services (credit, savings, insurance, etc.) as we have come to realize that the poor and the very poor who lack access to traditional formal financial institutions require a variety of financial products.

What is microfinance? FAQ

6.0 References: Microfinance in Africa - Experience and Lessons from Selected African Countries
References

4.1 Objectives and Coverage of the Regulatory Framework: Microfinance in Africa - Experience and Lessons from Selected African Countries
Overall, the rationale for microfinance regulation is to create a healthy environment for microfinance activities while not stifling the growth of the sector by imposing undue requirements.

4.0 The Role of Governments: Microfinance in Africa - Experience and Lessons from Selected African Countries
In several African countries—for example, Ghana, Guinea, Tanzania and Uganda— governments have in the past relied on state-owned banks to extend rural credit and microfinance services.

3.2 The Roles of Donors and NGOs: Microfinance in Africa Experience and Lessons from Selected African Countries
Donors and NGOs have generally provided support through two main channels: domestic NGOs or donor-managed microfinance projects, and microfinance institutions that function more or less like leasing companies (receiving wholesale external resources and lending to clients).

3.2 The Roles of Donors and NGOs: Microfinance in Africa Experience and Lessons from Selected African Countries
Donors and NGOs have generally provided support through two main channels: domestic NGOs or donor-managed microfinance projects, and microfinance institutions that function more or less like leasing companies (receiving wholesale external resources and lending to clients).

2.0 Deposit Collection and Credit Extension: Microfinance in Africa - Experience and Lessons from Selected African Countries
The importance of deposit collection in the development of microfinance services has arisen from the fact that the poor value both deposit and lending services

1.0 Introduction: Microfinance in Africa - Experience and Lessons from Selected African Countries

Small enterprises and most of the poor population in sub-Saharan Africa have very limited access to deposit and credit facilities and other financial services provided by formal financial institutions. For example, in Ghana and Tanzania, only about 5–6 percent of the population has access to the banking sector. This lack of access to financial services from the formal financial system is quite striking, when one considers that in many African countries the poor represent the largest share of the population and that the informal sector is an important part of the economy.

Redefining Microfinance as a Strategy to Achieve the MDGs: International Year of Microcredit Report Advocates Shift from Poverty Alleviation to Wealth Creation
With microfinance gaining attention for its vital role in eradicating poverty, the International Year of Microcredit recently released a report, "Microfinance and the Millennium Development Goals (MDGs): A Reader's Guide to the Millennium Project and Other UN Documents", to provide further background and support for microfinance initiatives.

Microfinance 2015: Panel Focuses on the Future and Outlook of Microfinance
Where will microfinance be in 2015? What is the future and challenges of microfinance? The first discussion held at the launch of the International Year of Microcredit 2005 focused on these key questions.

BRAC - Linking Food and Training with Microfinance
BRAC, the world’s largest NGO with a large microfinance program serving more than five million Bangladeshi families, is another example demonstrating that microfinance can and should serve the world’s poorest.

Pro Mujer - Providing Clients with Essential Health Care
Pro Mujer, an international microfinance network composed of partner MFIs in several Latin American countries, is a believer and a practitioner of “Microfinance Plus”— a term that has come to capture the concept of offering integrated services to its clients.

Overall Conclusions and Main Messages - MicroStart: Finding and Feeding Breakthroughs
Through MicroStart, UNDP is making an important contribution to the growth of microfinance around the world, both through its direct support of MFIs and through the processes and ideas it is introducing into countries where microfinance is just beginning.

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