A Billion to Gain? A Study on Global Financial Institutions and Microfinance

Publication Date: Feb 2006
Published by: ING Microfinance Support
Document Type: Paper

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Attitudes and activities of global commercial banks towards microfinance

This study was commissioned by ING Microfinance Support and the Netherlands Ministry of Foreign Affairs with an objective to understand:

• The current activities and future plans of international commercial banks with regards to microfinance;
• Learnings for international commercial banks from domestic banks involved in microfinance;
• Role of Government in helping corporations to combat poverty as seen by international commercial banks.

The report states that:

• the international banks’ main motive stems from either corporate citizenship or commercial targets.
• Most banks seem to follow ‘dual strategy’, i.e. strategy of combining both types of target as they cannot rely on one alone; this is an effective way for international commercial banks to make long term investment in microfinance.

The report concludes that:

• The key question for international commercial banks is whether their involvement would increase the availability of products at lower prices for more people at the lower end of the market.
• The answer may not be evident in next five to ten years, but it is certain that the international banks would not leave the microfinance stage early.