Microfinance, Poor Rural Households, and Women

This paper presents findings of a study to review ADBs operations in 2007. The study aimed to determine how effective ADBs projects had been in reducing rural poverty and improving the status of women. It also aimed to draw lessons to improve project design and the direction of ADBs microfinance operations. The purpose of ADBs microfinance strategy is to support the development of sustainable microfinance systems that can provide diverse, high-quality services. It focuses on:

• Creating a policy environment conducive to microfinance;
• Developing financial infrastructure;
• Building viable institutions;
• Supporting pro-poor;
• Supporting social intermediation.

The study drew valuable lessons from the in-depth analysis conducted in Bangladesh, Philippines, and Uzbekistan. They include:

• Characteristics and mandate of participating MFIs have an important bearing on targeting of poor households; institutional orientation must match developmental goals in project design;
• Planning to reach large numbers of the ultra-poor through microfinance alone may not be realistic;
• Absence of baseline data is a serious issue for undertaking an impact evaluation;
• Concern for mainstreaming the status of women suggests the need to include a gender action plan and gender specialists in project design.