Inclusive Finance Pages

Inclusive Finance


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.


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.

Adjacent Spaces

Sustainable development cannot be accomplished through microfinance alone. It requires a broad array of investment in other socially beneficial areas. Along with DWM’s investments in the microfinance sector, DWM is actively involved in the SME, housing finance, and education finance sectors. As we continue to innovate and grow alongside the populations we serve, we are constantly searching for new investment opportunities that meet the evolving financial needs of the bottom of the economic pyramid.

Small and Medium Enterprise (SME) Lenders

SME lenders loan across a wide range of business sectors, addressing a shortage in financing commonly referred to as the "missing middle", given that SME financial requirements are often too large for most MFIs to satisfy. SMEs typically provide the bulk of job creation and economic growth in developing countries—more than 90 percent of non-agricultural firms are SMEs in developing countries—generating a significant portion of GDP. SMEs have been recognized by international development experts as engines of economic growth and development. Therefore, specialized expertise with SMEs can confer a large competitive advantage. SME lenders are also often fully-licensed banks funded by deposits, which adds to their stability.

Low-Income Housing Finance

The potential for housing finance in developing countries is extensive. As micro entrepreneurs become successful in their endeavors and begin to grow their business, their next step is often to consider buying a house for their family. Because they are often still in an income bracket too small to be considered by traditional banks, many MFIs have begun offering mortgages to their most successful clients.

Education Finance

There is a growing level of demand for good quality and affordable education at all levels in developing countries. Furthermore, around the world there is an increased recognition of the growing economic value of continuing education beyond the secondary level. Demand for financing to pay for education is growing in tandem with these trends. While some commercial banks in developing countries offer loans to students, such loans are typically expensive and out of reach for those low-income students and families that could benefit the most from them. There are an increasing number of education finance companies stepping in to fill this funding gap.

Looking Forward

DWM will continue to seek out the best investment opportunities both for our investors and for the creation of sustainable social impact in developing economies. DWM recognizes the importance of investments in other adjacent spaces including mobile banking, water procurement, and renewable energy.