Microfinance knowledge hub
How microfinance works, and how to judge it
Plain-language guides to microcredit, savings, insurance and digital finance for low-income households, plus the metrics practitioners, investors and researchers use to assess microfinance institutions.
Guides
What is microfinance?
A clear introduction to microfinance, covering who it serves, which services it includes and why traditional banks often fail to reach low-income households.
Microcredit lending models: group, village banking and individual loans
How the main microcredit methodologies work, including solidarity groups, Grameen-style joint liability, village banking, self-help groups and individual lending.
Savings and deposits for low-income households
Why savings matter as much as credit for poor households, the informal tools people already use, and how formal microsavings products are designed.
Microinsurance: protecting low-income households against shocks
How microinsurance works, which products are most common (credit life, health, agricultural index insurance) and why demand is often lower than expected.
Digital finance and mobile money: how phones changed financial inclusion
How mobile money, agent networks and digital credit expanded access to payments, savings and loans, starting with M-Pesa in Kenya, and the new risks this brought.
How to measure microfinance institution performance
The standard ratios used to assess microfinance institutions (portfolio quality, sustainability, efficiency and outreach), with formulas and how to read them.
Why microfinance interest rates are high, and how to read them
The cost drivers behind microfinance interest rates, the difference between flat and declining-balance rates, and how to calculate the effective cost of a microloan.
Regulation and transformation: from microfinance NGO to bank
How microfinance NGOs became regulated financial institutions, why deposit-taking requires supervision, and lessons from BancoSol, Mibanco and others.
Does microfinance reduce poverty? What the evidence says
A summary of rigorous research on microcredit impact, including the 2015 randomised evaluations, and what it means for policy, practice and investment.
Client protection and responsible microfinance
The client protection principles used in microfinance (preventing over-indebtedness, transparent pricing, fair treatment, privacy and complaint resolution) and how they emerged.