Finance for the Poor: Microfinance Development Strategy

This paper proposes a development strategy for institutional microfinance covering the services provided by both formal and semiformal sources. The paper addresses three major concerns:

• What should be the strategic directions in ADB's assistance to its DMCs to expand the frontier of institutional microfinance to include the poor who are currently excluded and those who are likely to be excluded in the future?
• How should ADB support improvement of the quality of microfinance services in the Region?
• How can ADB help expand microfinance services to achieve the maximum development impact, including a reduction in the incidence of poverty?

The goal of ADB's proposed Microfinance Development Strategy is to ensure permanent access to institutional financial services for a majority of poor and low-income households and their microenterprises and support the development of sustainable microfinance systems providing high quality services. The strategy focuses on:

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