Microfinance Meets the Market

March 26, 2009 (Microcapital) “Microfinance Meets the Market” explores the tensions, opportunities, and overall dynamic of the microfinance industry as it shifts (or does not shift) towards commercialization. It outlines the evolution of microfinance (p3-7) from its beginnings as socially oriented non-profit microfinance institutions (MFIs) existing on subsidies to for-profit MFIs, and it explains the theory behind each model. It then presents a portrait of the current microfinance industry (p7-9), and lists a series of eight pertaining questions (p9), each of which it addresses as summarized below. The answers are used to consider overarching questions of subsidy, profit, and social impact in microfinance. (full paper wrap-up)