Lessons Learned in Improving Replicability of Successful Microcredit Programs - How Can the Best Models 'Travel' Better

This paper was commissioned by the Microcredit Summit Campaign in 2006.The paper attempts to review the main factors that have made the replication of microcredit possible in different contexts. The paper:

• Highlights the best practices that have translated well across countries. These include:
  • Focus on the bottom poor, especially women;
  • Tailoring of programs to suit the needs of the poor;
  • Group responsibility and ownership;
  • Good leadership and organizational capacity;
  • Effective monitoring, reporting and management;
  • Sustainability.
• Discusses the preconditions needed for microcredit to be successful such as:
  • Sound infrastructure;
  • Relatively easy access to markets;
  • High density of poor people;
  • A suitable legal and regulatory framework;
  • No restrictive laws on interest rate;
  • Mechanisms for the transfer of microcredit technology.

The paper touches upon different models of microcredit, but focuses on the replication of the group-based approach that Grameen Bank started, and which is also the most followed and adapted model around the world. The paper concludes that:

• Practitioners are successful in replication if they have the freedom to innovate;
• Innovations should be developed in response to realities faced by members as they implement their micro-economic activities;
• Grameen resource persons have found that all women are better savers and borrowers;
• Microcredit programs can create a counter-culture in villages where women traditionally lead sheltered lives by making them successful entrepreneurs;
• Staff members need courage, innovation and commitment to make the replication efforts successful.