Towards Self-Sufficiency for the Poor

This paper highlights how CIDA has supported activities in microfinance and microenterprise development since 1968, and how CIDA views microfinance as an important instrument to reduce poverty.

CIDA's main goal is to continue to increase the accessibility of financial and non-financial services to the poor, with special emphasis on women, and ensuring that the poorest of the poor are included among the beneficiaries.

Following points describe the major means to achieving this goal:

• Building and expanding institutional capacity: strengthening and supporting existing MFIs in the scale up phase to expand credit and business services, and increase the mobilisation of domestic savings. Support the development of new and emerging microfinance institutions, especially into under-serviced areas in Africa. Identify appropriate mechanisms to target the poorest of the poor;
• Broadening the capital base: encourage existing formal financial institutions to provide capital to microfinance institutions. Broaden the tools and scope of support including the use of mechanisms that can provide greater flexibility to programming;
• Support a strengthened regulatory and legal environment;
• Strengthen agency and partnership learning: promote the sharing of knowledge and experience by developing countries with well established microfinance institutions and vibrant microenterprise sectors to those with less developed ones;
• Improve impact and performance measures.

The paper further notes the necessity of work to encourage a better understanding of distinctions between operational, financial and institutional sustainability, all of which require appropriate goals.