Promoting Inclusive Markets and Financial Systems
SummaryThe argument for accelerated growth in microfinance is based on the persistence of mass poverty and the fact that microfinance has proven to be one of the few antipoverty approaches that is both effective and scalable. However, barriers to microfinance outreach remain and must be overcome if optimal levels are to be attained. Rapid growth (in terms of client outreach) should be pursued aggressively and with a sense of urgency wherever growth-ready microfinance institutions (MFIs) are operating in a reasonably enabling environment. Backing aggressive expansion plans of well-prepared MFIs will impacts those clients that are targeted who are reached and will also have a significant impact by demonstrating the growth potential of the overall sector while spurring innovation. Exponential growth can also enable MFIs to realize economies of scale, allowing
for the lowering of interest rates.