The thrust of this detailed guide from the World Bank is that microfinance is an increasingly mainstream and effective way to address poverty. Thirty years ago, perhaps, the idea of extending small loans or simple financial services to the world’s poor was strange and even radical. Now microfinance is no longer a charitable niche but a common and professionalized mainstay of the banking world. In fact, only the word microfinance is really new: As this book reminds us, for hundreds of years small, informal savings and credit groups have operated from India to Ireland.
Today millions of people receive loans as well as money transfers, deposit services, and insurance. But with three billion people in the world living on less than $2 a day, there’s still a lot of work to be done.
Access for All explains the basics of microfinance from the micro (client) to the macro (government) levels. The idea of access for all requires regulation at the policy level, financial reporting and transparency at the institution level, and fair transactions at the client level. Three challenges remain, the book asserts: scale, depth, and cost. Scale so financial services can serve large numbers of people; depth so individuals living in the even the remotest mountain hamlets can be served; and cost so services are less expensive for both clients and providers.
This book pulls together knowledge of the Consultative Group to Assist the Poor, a resource center and consortium of networks, funders, and microfinance institutions. As author Brigit Helms writes, “We believe microfinance is an integral part of a competitive and diverse financial system that fosters innovation and growth in all segments of society.”