The paradigm for microfinance
championed by members of the WWB network has at its core that: a) microfinance
services should focus on the poor; b) microfinance services and institutions
must be sustainable, once operations have grown to a reasonable scale;
and c) microfinancing institutions need to be integrated into the domestic
financial system through savings and/or accessing commercial funds.
Members of the
WWB network define successful microfinance institutions as those
- provide financial services to
significant numbers of poor people.
- provide microfinance services
that are efficient and financially sustainable.
- provide services that have a high
impact on reducing the poverty of clients.
- are integrated into the
domestic financial systems, through savings mobilization and through mobilizing
funds from commercial sources.
Three key measures to
provide responsive and sustainable financial services to hundreds of millions
of poor entrepreneurs are:
- engaging a range of institutional
- focusing on achieving high performance
by a range of legal structures;
- providing favorable policies and
financial access to institutions with high performance.
Microfinance Policy Focus
To reach the hundreds of millions of poor
people that need and warrant access to financial services, microfinance
NGOs, other specialized microfinance institutions, commercial banks,
credit unions and cooperatives, and grassroots savings and credit
programs need to participate.
The key is not legal structures, but the demonstrated capacity
of the microfinance institution to meet high standards of operating and
financial performance, reach, client impact, and integration into the domestic
Those institutions that meet high standards warrant a favorable
policy environment and financial support, including capital, loan funds,
practitioner-based institutional development support, and the capacity to