Anatomy of a Micro-finance Deal: The New Approach to Investing in Micro-finance Institutions (Focus Note No. 09)

Publication Date: Aug 1997
Published by: Consultative Group to Assist the Poor (CGAP)
Document Type: Paper (PDF)

View this Document (31 KB)   Email this Document

A new model for donor-MFI relationships

What is the best way to support a micro-finance institution (MFI) that has a track record of extending quality financial services to significant numbers of poor people on a progressively financially sustainable basis?

The CGAP Secretariat has begun to examine this question through the application of a new model for cooperation between international donors and MFIs. The new approach focuses on a business-like relationship based on mutual accountability, institutional performance, and shared risks. This note critiques the more traditional "project-oriented" strategy and then outlines the basic elements of the new institutional approach with some examples from the CGAP Secretariat's experience.

[author]