Microfinance and the Poor: Breaking down walls between microfinance and formal finance
By Elizabeth Littlefiled, Chief Executive Officer, Consultative Group to Assist the Poor (CGAP). Microfinance institutions (MFIs) have emerged over the past three decades to address this market failure and provide financial services to low-income clients.Most of the early pioneer organizations in the modern microfinance movement operated as nonprofit, socially motivated nongovernmental organizations. They developed new credit techniques: instead of requiring collateral, they reduced risk through group guarantees, appraisal of household cash flow, and small initial loans to test clients...
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Microfinance and the Poor: Breaking down walls between microfinance and formal finance
By Elizabeth Littlefiled, Chief Executive Officer, Consultative Group to Assist the Poor (CGAP). Microfinance institutions (MFIs) have emerged over the past three decades to address this market failure and provide financial services to low-income clients.Most of the early pioneer organizations in the modern microfinance movement operated as nonprofit, socially motivated nongovernmental organizations. They developed new credit techniques: instead of requiring collateral, they reduced risk through group guarantees, appraisal of household cash flow, and small initial loans to test clients...
