Where the Microfinance Revolution Began: The First 25 Years of the Bank Dagang Bali, 1970- 1994

Publication Date: 1995
Published by: MIP - Microenterprise Innovation Project
Document Type: Case Study

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Can donor or government funds meet the massive demand for institutional microfinance?

Draws on example of Bank Dagang Bali, the first formal institution to deliver commercial microfinance at the local level in Indonesia, and to demonstrate financial institutions can provide commercial microfinance profitably

Argues that demand for institutional microfinance worldwide is too high to be met by donor or government funds. It can only be met if licensed commercial institutions are able to mobilize local savings and leverage commercial investment as necessary

Concludes that by providing loans with interest rates at 10 to 20 per cent of what lower-income borrowers typically pay in informal commercial markets, financial institutions can deliver credit profitably.

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