Some Examples of Microfinance Projects

Microfinance encompasses providing financial services such as loans, savings accounts, insurance funds, and credit to poor and low-income clients so as to help them increase their income, thereby improving their standard of living.

In this context, microfinance projects have attempted to reach vulnerable populations throughout developing countries.

Below are some examples of microfinance projects.

Catholic Relief Services

Catholic Relief Services’ microfinance programs in developing countries work through microfinance associations and their member institutions, as well as with informal or community-based savings groups.

CRS encourages clients to save and borrow for investments in income-generating microenterprises. CRS aims to reach very poor households and communities, and help to create a sustainable financial base for local community development. CRS microfinance programs in developing countries place a major focus on savings-led microfinance—helping community members to form groups, pool their savings, and make loans to each other.  This approach has created economic opportunities for more than 3.2 million people who live in the world’s most impoverished areas.

CRS provides training and capacity strengthening to new savings groups, using a highly sustainable fee-for-service, market-based, agent approach. Upon completing their first 12-month cycle, groups can operate on their own.

In 2005 CRS began to move away from direct lending to and oversight of its microfinance partners, and since 2006 CRS’s MFI interventions have shifted to a focus on Social Performance Management (SPM). By introducing SPM systems, CRS was able to provide the MFIs practical measurement tools to monitor and evaluate their social performance. Integrating social and financial indicators into a unified performance measurement system has created a “double bottom-line” culture that measures success in terms of both profitability and positive social impact.

To learn more about CRS and its microfinance projects, please click here.

IFAD (International Fund for Agricultural Development)

IFAD’s Rural Microfinance Development Support Project was designed to support microfinance institutions in order to improve rural people’s access to financial services.

The project was launched in Cameroon in 2017, and since its inception has increased the outreach of seven partner microfinance networks that work in rural areas. However, the number and volume of loans increased only in three of the microfinance networks. The novelty of the project was the creation of a refinancing fund for agricultural medium-term credit.

To learn more about IFAD’s Rural Microfinance Development Support Project, please click here.

DAI

DAI, an international development company focused on social and economic development issues works with a wide range of clients, including national and local governments, bilateral and multilateral donors, private corporations, and philanthropies.

DAI and USAID worked together on a microfinance project titled ‘Kenya—Microfinance Capacity Building Project (KEMCAP)’. The project consisted in supporting Kenya’s capacity to create an enabling environment for microfinance, sharing best practices, and creating business connections between various regional firms. The Association of Microfinance Institutions (AMFI) was formed to serve the interests of these institutions.

KEMCAP’s principal objective was to build and strengthen AMFI so that it could become a permanent fixture in the Kenyan financial services marketplace, improving much-needed industry infrastructure for microfinance institutions while helping to increase client outreach and business performance.

To learn more about DAI’s Kenya—Microfinance Capacity Building Project, please click here.

The Hunger Project

The Hunger Project’s Microfinance Program addresses a critical missing link for the end of hunger in Africa: the economic empowerment of the most important but least supported food producers on the continent – Africa’s women.

According to the Hunger Project, microfinance can help reduce poverty by improving both people’s standard of living and economic self-sufficiency, as well as offer a pathway to education, health care and equity between men and women.

The Hunger Project has designed a microfinance model which aims to address a critical issue in development: the full inclusion of women farmers and entrepreneurs. As a result, the Hunger Project’s Microfinance Program is women-led, locally owned and fully integrated – it provides an empowering environment for women to participate.

To learn more about The Hunger Project and its microfinance projects, please click here.

Andrew Grene Foundation

The Andrew Grene Foundation works in partnership with Fonkoze Microfinance  to run a microfinance project in Aquin, a rural area in the south of Haiti. The objective of the project is to help lift women and their families out of extreme poverty.

The microfinance project includes a four-month education program (Alfa Course), which teaches participants basic numeracy, literacy, healthcare and childcare. There is also the Ti Kredi lending program which is specifically designed for women who are unable to join the conventional lending program due to unemployment, illness or family issues. According to program administrators, close monitoring of this program ensures low loan delinquency. Graduation rates are at 90%.

To learn more about the Andrew Grene Foundation’s microfinance project, please click here.

Asian Development Bank

The Asian Development Bank’s microfinance projects also attempt to increase financial access to traditionally underserved populations, including women, poor households, vulnerable groups, and micro, small, and medium enterprises.  The ADB recognizes that financial services should go beyond micro loans to include savings, payments and remittances, insurance, and pensions.

ADB’s support for inclusive finance is provided through loans, credit lines, investments, grants, guarantees, and technical assistance. According to ADB, women have very limited financial control. Thus, addressing gender inequality in financial inclusion is more than just formulating projects that target women as a market. ADB explains that gender-related projects in financial inclusion should aim to elevate the role of women in society.

ADB's microfinance projects that help women range from improving the access of female clients to financial services and products to improving financial literacy among women.

To learn more about the Asian Development Bank’s microfinance projects, please click here.