• Investment Management
  • Assets Under Management
  • Structured Investments
  • Where We Invest
• Sustainable Capital
  • Debt Investments
  • Private Equity
  • Capital Markets
  • Strategic Advisory
• Our Philosophy
  • Sustainable Development
  • Microfinance
  • Adjacent Spaces
  • Resources

• Our Philosophy
• Sustainable Development
• Microfinance
• • Borrower Stories
• Adjacent Spaces
• Resources

Microfinance

People of low-income have demonstrated remarkable entrepreneurial ability when given the opportunity to pursue small business endeavors. A key difference between people living in poverty and those who are able to rise above it is often something so simple which is taken for granted in the developing world: access to credit. The ability to access funding is crucial for any business, and for decades microfinance institutions worldwide have proven that when the poor are given access to credit via micro loans to start their own small business, they are able become self-reliant.

Traditional banks have generally tended to exclude the poor from being able to access their products and services; microfinance has emerged to fill this gap.

Repayment

Just as remarkable as the ability of an entrepreneur to turn a small loan into a self-sustaining business, is the ability of him or her to consistently repay their debts – at levels higher than most major financial institutions in developed countries. Microfinance generally boasts repayment rates of 97-98%. This is accomplished by the fact that microfinance institutions are often different than traditional banks due to their very high level of client interaction and the different social methodologies that MFIs use to extend loans. Furthermore, micro entrepreneurs have a strong incentive to repay their loans so that they can secure access to future funding, because their livelihood depends on it.

More than just financing

Microfinance helps the poor become self-reliant and also helps economies to develop. But microfinance is an equally strong catalyst for social change. Many MFIs tend to lend primarily to women because they have demonstrated greater responsible than men in making financial decisions that are beneficial to their households. This has enabled the empowerment of women in places where they might have otherwise been subordinate in their households or without any means if they were unmarried. MFIs also often provide services to compliment their core financial products, such as insurance, financial management education, skills training, educational and housing loans, and mobile banking.

For additional information about microfinance, including useful links, please see our resources page.