Research & Analysis

Scoring: The Next Breakthrough in Microcredit?

Scoring is a way to judge the risk of whether the self-employed poor will repay their microcredit debts as promised This Occasional Paper discusses how scoring works, what microlenders can expect from it, how to use it, and what its implications are for microcredit.

Microfinance and the Millennium Development Goals

The eradication of extreme poverty and hunger, education, women's empowerment, and the other Millennium Development Goals are rightly the focus of donors and governments. This brief gives the evidence for how microfinance can play an important part in achieving these goals.

Microfinance, Grants, and Non-Financial Responses to Poverty Reduction

This note was written for audiences from development specialties outside the financial sector to provide guidance on where microfinance is most appropriate, and where complementary and alternative interventions are more effective.

Why Donors Need to Understand Product Development

Product development in microfinance makes a lot of sense because clients need more than one type of loan or service. MFIs often ask for support to expand their product line, but developing products is not easy. This Donor Brief provides guidelines for donors who want to make the best use of funds for product development.

Microcredit Interest Rates

This Occasional Paper explains how a microfinance institution (MFI) should estimate the interest rate on its loans if the institution wants to become sustainable; how to calculate the effective interest yield on loans; and what different loan and repayment methods are used to determine the true rate of interest income received by an MFI. This Occasional Paper also discusses evidence that MFI clients are capable of paying high interest rates, concluding that MFIs should be able to cover their costs.

Microfinance Transparency and Reporting to Donors

Knowing and understanding the components that contribute to transparency in microfinance is half of battle. It is also particularly useful to know how donor reports can enhance transparency for the whole microfinance sector. This Donor Brief provides suggestions for achieving better transparency in reporting.

Making Sense of Microcredit Interest Rates

Why do microfinance institutions (MFIs) charge such high interest rates to the poor? This Donor Brief gives donors a quick reference to use when answering questions about seemingly high microcredit interest rates. It also explains how donors can tell if an MFI's rates are too high and suggests what to do.

What are Apex Institutions in Microfinance?

Many apex institutions have dubious track records. This Donor Brief explains how donors can recognize a good apex institution and then support it, thus avoiding common donor mistakes with apexes.

Savings Are as Important as Credit: Deposit Services for the Poor

Savings are often the only way poor people can manage to pay for a major life event (such as a marriage or funeral), survive a natural disaster, or take advantage of a business opportunity. This Donor Brief outlines what donors can do to support savings services that help poor people improve their lives.

Water, Water Everywhere, but Not a Drop to Drink

"Water" in this title refers to donor funds for microfinance institutions (MFIs). Strong MFIs have an oversupply of donor funds, it seems money is everywhere. But many smaller and promising MFIs cannot get the funds they need to grow. This Donor Brief addresses how donor funding can become more effective.