HOW TO MAKE A LASTING MICROFINANCE INSTITUTION: A RECIPE FOR SUCCESS

Abstract

2005 was designated as the “Year of Microcredit” by the United Nations Economic and Social Council. Microcredit was seen as a breakthrough in facilitating financial access for those from all backgrounds. Microcredit is a smaller division of microfinance, which describes financial services, such as loans, savings, insurance, and fund transfers to entrepreneurs, small businesses, and individuals who lack access to traditional banking services. Many see microfinance and microcredit as synonymous; however, microfinance is broader because it provides a collection of financial services, not just credit or loans. The author put together a guide by compiling previous studies that detail the successes of microfinance institutions across the globe. This guide will be instrumental to any organization curious about microfinance institutions or those looking to enter the industry. While looking through published research on microfinance, many studies highlighted one specific point about microfinance institutions. However, not one recent literature review summarized all of the important points of interest drawn across a multitude of studies.