Beyond Lending: How Microfinance Creates New Forms of Capital to Fight Poverty

This article focuses on using the process capital of microfinance to design innovations that can address a wide range of constraints that the poor face. The power of microfinance lies in the process through which it is provided, the new forms of engagement, relationships and capacities that it creates. It is possible to leverage these structures and processes to facilitate other types of innovations to develop new services for the poor. The paper presents examples from Building Resources Across Communities (BRAC) in Bangladesh, which utilized the process capital of microfinance to develop poultry as a viable enterprise for the poor, rear livestock, get basic health services to reach the poor and help women access legal services and human rights. It also designed socio-economic processes that create strategic linkages with microfinance, such as:

• Time-bound food assistance program;
• Microfinance for adolescents;
• Microfinance for commercial sex workers;
• Remittance partnerships.

Finally, the paper states that it is possible to harness the process capital in the microfinance sector more fully and do far more to alleviate poverty by broadening the current perception of microfinance.