Financial Institutions with a "Double Bottom Line": Implications for the Future of Microfinance

This paper presents the the results of the CGAP survey of global outreach of Alternative Financial Institutions (AFIs). These include a broader set of institutions (and not just NGO/NPO/MFIs) which focus to some degree on extending financial services to clients that do not have access to commercial banks.

The paper states that:

• AFIs account for over 750 million savings and loan accounts;
• Data needed to quantify the split between poor and non-poor clients in these institutions is almost never available;
• MFI clients tend to be poorer on an average than clients of other AFIs in the same country;
• AFIs also have very large numbers of poor clients;
• AFIs probably account for a significant share (sometimes the majority) of financial system clients in most developing and transition countries.

The paper further states that AFIs deserve more attention than they receive from government policy makers and external donors. While governments, donors, and others interested in the outreach of microfinance should continue to foster the growth of high-performing MFIs, they also need to think about the opportunities and challenges presented by the other AFIs.