Independent microfinance guides
Understand how microfinance really works
Plain-language guides to microcredit, savings, insurance and digital finance for low-income households, plus the metrics used to assess microfinance institutions.
Grounded in research from leading sources
- CGAP
- World Bank Global Findex
- American Economic Journal
- Science
- Portfolios of the Poor
Learn the numbers
Learn to read a microfinance institution like an analyst
Investors, regulators and managers rely on a small set of ratios. We explain each one: what it measures, how to calculate it and how to read it.
- ✓Portfolio qualityPAR30, write-offs and risk coverage, and why PAR is stricter than a repayment rate.
- ✓SustainabilityOperational and financial self-sufficiency, adjusted for subsidies.
- ✓True cost of creditFlat vs. declining-balance rates, worked through step by step.
Why read us
A clear, independent guide to financial inclusion
Plain language
Concepts explained without jargon, with worked examples where numbers matter.
Grounded in evidence
We draw on CGAP publications, peer-reviewed studies and regulator documents.
Independent
No lending products, no paid placements and no comparison tables for commission.
Practitioner metrics
PAR30, OSS, portfolio yield: the ratios analysts actually use, with formulas.
For every reader
Written for students, journalists, practitioners and curious readers alike.
Kept up to date
Every guide shows the date it was last reviewed.
Learning path
Where to start
Start with the basics
What microfinance is, who it serves and why mainstream banks struggle to reach low-income households.
Learn the products
Group and individual lending, savings, insurance and mobile money: how each one works in practice.
Judge an institution
Read portfolio quality, sustainability and efficiency ratios, and understand what drives interest rates.
All guides
Everything you need to know about microfinance
From the basics of microcredit to regulation, interest rates and the research evidence.
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.
Randomised studies find microcredit is "modestly positive, but not transformative". See what the evidence says →
New to microfinance?
Start with a ten-minute introduction, then explore the glossary and the history of the sector.
Read the introduction →