Technical Assistance for Microfinance Outreach Initiatives of the Consultative Group to Assist the Poorest

This paper discusses the collaboration between the Asian Development Bank (ADB) and the Consultative Group to Assist the Poor (CGAP), in order to expand the outreach of microfinance. The paper argues that:

• The Microfinance Development Strategy (MDS) of the ADB emphasizes the importance of developing a sustainable microfinance system to fully harness the potential of microfinance for poverty reduction;
• Technical Assistance (TA) is one of the means through which ADB translates its commitment into concrete action. The TA establishes a mechanism to help the CGAP strengthen its microfinance activities in the region;
• The objective of the TA is to strengthen the capacity of MFIs in the region to provide demand-driven financial services to the poorest households on a financially sustainable basis;
• In order to broaden the range of services available, CGAP has developed innovative ways for microfinance institutions (MFIs) to reach the poorest households and has encouraged MFIs to adopt similar innovations;
• CGAP provides small grants to selected, small, low-profile MFIs that reach the poorest households through innovative products and mechanisms;
• ADB's support will enable CGAP to improve its focus on poverty outreach, enhance its catalytic role in the region, and help achieve ADB's goal of poverty reduction.

The paper concludes with details of the TA program, its scope, and its cost estimate and implementation arrangements.