Research & Analysis

Guiding Principles on Regulation and Supervision of Microfinance

Captured here is broad consensus on many principles of good practice in regulation and supervision of microfinance. The guidelines summarize these principles for government regulators and others engaged in moving microfinance into the formal financial sector.

Regulation and Supervision of Microfinance

This Donor Brief provides a simple and clear summary of the increasingly complex issues in microfinance regulation and supervision. It includes definitions of key terms, clear guidelines, and options for donor action.

Microfinance Means Financial Services for the Poor

This Donor Brief summarizes the vision and strategy of CGAP members to bring microfinance to the scale required to serve millions worldwide.

Credit Components

Designed as inputs to larger projects with limited life spans, credit components run the risk of failing to provide the intended target groups with permanent access to financial services. This Donor Brief outlines some ways to make the most of credit components and minimize their downsides.

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.

Is Microfinance an Effective Strategy to Reach the MDGs?

This paper reviews the mounting body of evidence showing that the availability of financial services for poor households (“microfinance”) is a critical contextual factor with strong impact on the achievement of the Milennium Development Goals.

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.