Reimagining Microfinance

This paper argues that the dichotomy between commercial microfinance and pro-poor microfinance is a false one. It proposes a new model that could not only make microfinance more relevant to the world’s poor, but also more profitable in the long-term.

This model views microfinance as a platform for delivering a host of products and services to the world’s poorest, most isolated people. It relies on high volumes, not high margins. It uses private benefit limits, holistic performance standards and third-party certification to ensure that MFIs meet their double bottom lines.

The paper suggests that if MFIs adopt these practices, they may have a longer-term impact on poverty while generating profits up and down the value chain, from poor families to multinational corporations. Finally, the paper states that by reimagining microfinance, MFIs may regain public trust and avoid regulatory backlash.