Take-up: Why Microfinance Take-up Rates are Low & Why it Matters

This note brings together information from field experiences on the take-up of microfinance products and services. It uses data from 2 surveys and 13 projects which show that take-up rates of financial services range between 2% and 84% of eligible individuals.

Microfinance products often have low take-up rates, indicating that existing institutions and products do not serve all poor households. Participation rates reveal information about customers’ interest in a particular product or service, and the unmet demand for better products or better prices. Take-up rates also have implications for methodology selection in measuring impact.

There are three different types of measurements of take-up rates. They are population-based aggregate estimates from government administrative records, general house¬hold surveys of a population, and carefully-designed analyses of specific products or services. Research findings indicate that:

• Eligible individuals who did not borrow reported that high interest rates were not their main reason for not borrowing;
• Randomized studies of actual behaviours, however, show that borrowers’ sensitivity to interest rates and fees is high;
• Actively studying take-up with rigorous research designs can provide more definitive answers on how to design better products for clients.