A Donor-Investor’s Vision for Enhancing the Future of Microfinance

Conclusions

In summary, microfinance entered a critical phase of consolidation in 2005. It will no longer be sufficient for the majority of MFIFs to continue simply as fundraising and investment institutions. A more pioneering role is in order. The “frontier of microfinance” has not yet reached a point at which it is widely regarded by private investors as a credible and efficient financial product. It has not yet sufficiently penetrated the poorest and most difficult countries, and the agricultural sector. The private sector is not in a position to take the lead in deepening microfinance so that it can address these challenges. This means that the role and fundamental duty of KfW Entwicklungsbank remains that of the promotional investor, stimulating the private sector in close co-operation with our like-minded friends. We face interesting challenges at the new frontier of microfinance.

Keywords

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