A major source of financing for the poor and no longer a niche industry. Over the past four decades, microfinance the provision of loans, savings, and insurance to small businesses and entrepreneurs shut out of traditional capital markets has grown from a niche service in Bangladesh and a few other countries to a significant global source of financing. Some 200 million people globally now receive support from microfinance institutions, with most of the recipients in the developing world. In the beginning, much of the microfinance industry was managed by non-governmental organizations, but today the majority of these institutions are commercial and regulated by governments, and they provide safe places for the poor to save, as well as offering much-needed capital and other financial services. Now out of infancy, the microfinance industry faces major challenges, including its ability to deal with mobile banking and other technology and concerns that some markets are now over-saturated with microfinance. How the industry deals with these and other challenges will determine whether it will continue to grow or will be subsumed within the larger global financial sector. This book is based on the results of a workshop at Lehigh University among thirty-four leaders in the industry. The editors, working with contributions from more than a dozen leading authorities in the field, tell the important story of how microfinance developed, how it has met the needs of hundreds of millions of people, and they address key questions about how it can continue to meet those needs in the future.
Ira W. Lieberman, is the President and CEO of LIPAM International Inc. Lieberman advises governments, the private sector and international development agencies on issues affecting developing and emerging market countries. He established the Secretariat for the Consultative Group to Assist the Poorest at the World Bank, representing some 26 donor institutions and foundations with respect to best practice in microfinance. He has served on the boards of directors of a number of microfinance funds and institutions servicing Latin America and Africa. He has also published extensively on the sector. He is the author of In Good Times Prepare for Crisis: From the Great Depression to the Great Recession, Sovereign Debt Crises and Their Resolution. Paul DiLeo is the Managing Director of Grassroots Capital management, which manages investment funds that invest in microfinance institutions in Latin America and India. Prior to Grassroots, DiLeo, managed the first fund of funds in the microfinance industry. He has been on the boards of directors of several microfinance institutions. Todd A. Watkins, is Professor of Economics and Executive Director of the Martindale Center for the Study of Private Enterprise at Lehigh University. He is the author Introduction to Microfinance and co-editor of the book Moving Beyond Storytelling: Emerging Research in Microfinance. Watkins founded and directs Lehigh's Microfinance Program, and was a founding member of the advisory Faculty Council for Accion International's Center for Financial Inclusion, which seeks to promote innovation and growth of commercial microfinance worldwide. Anna Kanze is a Managing Director of Grassroots Capital Management PBC, where she supports the creation of impact investment funds in India and Latin America. She is also a board member of the Social Performance Task Force (SPTF) and a co-chair of the SPTF's Social Investor Working Group since 2017.
Foreword Preface Acknowledgments Abbreviations Introduction, Paul DiLeo and Jose Ruisanchez Section I: Background 1. The Growth and Commercial Evolution of Microfinance, Ira W. Lieberman Section II: Where We Are Now What Is Needed in the Future 2. The Changing Face of Microfinance and the Role of Funders: Financing the Future, Paul DiLeo and Anna Kanze Vision Statement. Fifteen Years of Financing MFIs: From Microcredit to SDG Integration, Roland Dominice 3. The Future of Microcredit Depends on Social Investors, Timothy N. Ogden 4. Microfinance Industry Concentration and the Role of Large-Scale and Profitable MFIs, Todd A. Watkins 5. The Future of Microfinance as Knowledge Management: The Experience of the BBVA Microfinance Foundation, Claudio Gonzalez-Vega 6. Refocusing on Customer Value: Meaningful Inclusion through Positive Partnerships, Gerhard Coetzee 7. Understanding the Impact of Microcredit, Timothy N. Ogden Section III: The Challenge of Technology and New Product Innovation and Development 8. Microfinance in the Age of Digital Finance, Momina Aijazuddin and Matthew Brown Vision Statement. Microfinance and Digital Finance, Greta Bull 9. Governance in the Digital Age: Responsible Finance for Digital Inclusion, Lory Camba Opem 10. Product Diversification: Consumer Loans for Education and Housing, Alex Silva 11. Insurance for Development: How Has It Evolved and Where Is It Going? Craig Churchill and Aparna Dalal Section IV: A Geographic Perspective 12. Asia and the Pacific: Tremendous Progress, but Hundreds of Millions Yet to Serve, Jennifer Isern 13. Financial Inclusion in India A Himalayan Feat, Jennifer Isern 14. Inclusive Financial Development in China, Enjiang Cheng 15. The Future of Microfinance in Africa: Differentiating East and West, Renee Chao-Beroff and Kimanthi Mutua Vision Statement. The Future of Microfinance in Africa, Renee Chao-Beroff 16. Latin America and the Caribbean: The Journey, the Gap, and a Vision of the New Microfinance Revolution, Jose Ruisanchez Appendix: What the Data Tell Us, Blaine Stephens and Nikhil Gehani Glossary Contributors Index
When a reader spots a title such as this book's, it is easy to assume that the editors, working with contributions from several authorities in the field, will dwell on the virtues of the sector and how the future looks rosy. While the book does point to a good job done, it also tells you unequivocally how the sector has not lived up to its original intent of alleviating poverty."- K. Bharat Kumar, The Hindu
