Research & Analysis

Foreign Exchange Rate Risk in Microfinance

Many borrowing microfinance institutions (MFIs) are not adequately managing their exposure to foreign exchange rate risk. There are at least three components of foreign exchange rate risk: (1) devaluation or depreciation risk, (2) convertibility risk, and (3) transfer risk.

Access for All: Building Inclusive Financial Systems

Diverse channels are needed to get diverse financial services into the hands of a diverse range of people who are currently excluded. Making this vision a reality entails breaking down the walls—real and imaginary—that currently separate microfinance from the much broader world of financial systems.

Mobile-Phone Banking and Low-Income Customers

This paper presents the first public findings on how low-income people view and use m-banking, using results of a survey of 515 low-income individuals in South Africa. Three hundred of those surveyed do not use m-banking, while 215 are customers of WIZZIT, a startup mobile banking provider. WIZZIT targets the 16 million South Africans who lack or have difficulty accessing formal banking services.

Working With Savings and Credit Cooperatives

This Donor Brief addresses how donors can support savings and credit cooperatives to increase access to financial services. It highlights the advantages of working with these groups as well as some of the unique challenges of doing so.

The Market for Foreign Investment in Microfinance

Many microfinance institutions (MFIs) in developing and transition economies have received foreign funding, especially the larger MFIs. Most of that funding has consisted of grants or highly subsidized loans from donor agencies, including such bilateral donors as Agence Française de Développement or the US Agency for International Development, and multilateral agencies such as the United Nations Development Programme or the World Bank.

AML/CFT Regulation

Across the world, new measures are being introduced to combat money laundering and the financing of terrorism. All financial service providers, including those working with low-income communities, are—or will be—affected by these measures. This paper summarizes the implications of the international framework for anti-money laundering (AML) and combating the financing of terrorism (CFT) for financial service providers working with low-income people.

Building Capacity for Retail Microfinance

This Donor Brief addresses how funding agencies -- public donors, international NGOs, private foundations, and investors -- can help meet the challenge of developing retail capacity.

Commercial Banks and Microfinance: Evolving Models of Success

There is a vast potential market for retail financial services among low-income clients, and a growing number of commercial banks have successfully entered this market. These are the findings of recent research undertaken by CGAP, the global resource center for microfinance supported by a syndicate of 30 multilateral, bilateral, and private donors.

Protecting Microfinance Borrowers

Around the world, the microfinance community is paying more attention to consumer protection. Controversial topics, such as high interest rates and the overindebtedness of borrowers, have raised public concern for poor consumers in countries far and wide, from Bolivia to Bangladesh to South Africa and beyond. Yet relatively little is known about how consumer protection might apply to financial services for the poor.

Managing Risks and Designing Products for Agricultural Microfinance

This Occasional Paper offers a model for providing financial services to poor, rural farming households that combines the most relevant and promising features of traditional microfinance, traditional agricultural finance, and other approaches.