Banking on the Poor: Unleashing the Benefits of Microfinance

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This policy brief is designed to help policymakers and practitioners understand the financial services needed by the poor. It is framed within lessons learned from a five-year IFPRI research program that examined, among other issues, the roles government should play in providing financial services to meet the needs of the poor. Insights presented here are based on a series of detailed household surveys conducted in nine countries of Africa and Asia: Bangladesh, Cameroon, China, Egypt, Ghana, Madagascar, Malawi, Nepal, and Pakistan.

Microfinance, once a colossal leap of faith for many governments and donors, is now considered a viable business. IFPRI’s research shows that it is most successful when designed with a tight and mutually reinforcing fit between the larger financial environment, the mechanism of service design and delivery, and the particular needs of the poor that microfinance institutions serve.

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