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Recognizing Two Approaches to Balancing Returns in Microfinance

If microfinance is to rely on impact investors to fund its future growth, it's crucial that it build credibility with both financial-first and below-market investors. Without clearer and more accurate investment propositions, microfinance could progressively alienate all its investors.

MSMEs: Big Opportunity In Small Lending

Access to finance is the most significant obstacle to business growth globally (16.2%) and experts estimate that there are 310 to 380 million enterprises that need more credit but can’t access it, with collective needs totaling $2.1 to $2.5 trillion.

Transparency In SME Investments: We’re Not There Yet

Despite evidence of financial and impact tracking, most DFIs do not disclose data on financial performance. Reporting on social impact is even harder to obtain. We are a long way from full transparency.

New Directions for Funders: Insights and Perspectives

How can funders balance the need for flexibility and accountability requirements with partners while ensuring effective outcomes? The answer lies in defining a monitoring and impact evaluation system that includes a "theory of change," quick feedback loops and reasonable assumptions.

Market Building Through Financial Sector Deepening In Africa

How do we support a market building approach in practice? The current advice is to either become a market facilitator or fund one. But what is a market facilitator; what do they do?

USAID’s Approach To Developing Market Systems

Market systems are dynamic and changes stimulated by projects are rarely linear, making it difficult to match each activity with a single output and outcome.

Solutions For Building More Effective Market Systems

Market systems are complex, and it's nearly impossible to predict their future outcomes. Can setting concrete goals be too limiting?

Where The Wild Things Are: Measuring Market Development Progress

Being able to measure and demonstrate progress are critical issues as taxpayers and other funders of donors and DFIs require explanations and justifications of the use of their limited resources. A handful of donors are starting to experiment with different tools for measuring progress in agricultural and other non-financial markets. It is difficult work, especially when attempting to measure attributable and sustainable changes to a market system.

Why And How Should We Measure Progress In Market Development?

With increasing scrutiny of aid budgets in donor countries, the pressures to prove impact of development programs are higher than ever before. It is relatively easy to assess impacts in a backward-looking fashion when there is already some record of progress, but measurement challenges are more daunting at the start of a program, when impact assessment needs to be forward-looking.

Taking Market Development Approaches to Financial Access

How can aid agencies begin to ‘take’ market development thinking and practice into their efforts to enhance financial services for poor people? Drawing from wider experience, here are five basic starting points to consider.

OPIC and the Global Microfinance Industry

As the U.S. Government’s Development Finance Institution, the Overseas Private Investment Corporation (OPIC) has a mandate to help channel private capital to address some of the world’s toughest development challenges. One of the core ways we carry out that mission is by working with microfinance institutions. In recent years, OPIC has tailored its financing and insurance products to better serve the microfinance sector.

Expanding the Funding Horizon for Financial Access

There is broad recognition within the development community that donors have contributed significantly to building microfinance institutions that serve the poor around the world. But isn’t it time donors updated their investment portfolio to reflect new thinking and the new reality on the ground?

Microfinance: Excited about Building an Industry?

The real strength of microfinance is industry building – creating institutions that bring useful services to poor people who need them. While clients’ businesses rarely revolutionize the economic fabric of their communities, microfinance institutions (MFIs) do.

Marked Progress in the Transparency of Cross-Border Funding

Transparency on funding for microfinance made significant progress over the last decade. There are strong reasons to believe that transparency contributes to more effective and more responsible funding.

The Role Public Funders Can Play in Branchless Banking

Given the current momentum, is there a meaningful role that public funders can play without crowding out private investment?

Funders' Role in Providing Investment and Advisory Services

Overall IFC’s strategy is driven by its desire to extend reach and its understanding that to do so we need to give full consideration to complex ecosystems which must hold a value proposition for all players involved.

Measuring Aid Effectiveness Effectively

It is hard to say whether aid has really helped to raise growth or reduce poverty or contribute to the Millennium Development Goals.

Over-Indebtedness and the Role of Investors

The consequences of over-indebtedness are shared among all stakeholders in microfinance. Households, individuals, and communities are affected by borrowers who cannot repay their debts.

Driving Fast on Indian Country Roads: Learning from the Crisis

Investors all the way up the value chain of microfinance funding can do a lot to support a safe road to financial inclusion.