Financial Inclusion & Microfinance - Frequently Asked Questions

Microfinance, which has its roots in microcredit, has evolved in recent decades. In the 1970s, social innovators from the Global South introduced the concept that small amounts of short-term capital (microcredit) can help poor people in the informal economy engage in productive activities and grow their way out of poverty. Experience and research revealed the limits of microcredit as an anti-poverty tool. This led to the recognition that poor households need access to a full range of financial services, not only to generate income, but also to build assets, smooth consumption, and manage risks. The term “microfinance” thus has evolved to refer to a broad set of financial services tailored to fit the needs of poor individuals.

Financial inclusion has a wider meaning, and it encompasses a wider range of players and institutions. It refers to individuals and businesses having the opportunity to access and the ability to use a diverse range of appropriate financial services that are responsibly and sustainably provided by formal financial institutions. Whereas microfinance advocates generally work with the microfinance institutions that grew out of the microcredit revolution serving the poor, financial inclusion advocates more often work with a broad range of providers to achieve their goals, including those that do not necessarily focus exclusively on poor people. Both the microfinance sector and the global financial inclusion agenda recognize the importance of building consumer financial capabilities and consumer protection policies that account for the conditions and constraints of poor families in the informal economy.

Source: CGAP
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FinDev Gateway, previously known as the Microfinance Gateway, is CGAP’s independent knowledge platform for the global financial inclusion community. We support the financial inclusion sector by providing a neutral space for sharing knowledge, lessons and ideas on making financial services work for poor people.

Through the FinDev Blog and our FinDev Webinar series, microfinance and financial inclusion practitioners connect with their peers to discuss the pressing topics of the day. These platforms allow the community to step out of their day-to-day work and engage in deeper learning and discussions that help advance financial inclusion.

FinDev Gateway also provides access to over 8,000 publications, events, jobs and news on financial inclusion and microfinance contributed by organizations from around the world. Organizations can gain visibility for their work by publishing it on FinDev Gateway.

The platform is a public good available to anyone interested in financial inclusion.

FinDev stands for “Financial Inclusion for Development.” The name is meant to convey the important contribution of financial inclusion in achieving global development goals.

FinDev Gateway has served the microfinance community for over 20 years, first as the Microfinance Gateway and now, as of October 2018, as FinDev Gateway. Over the years, the microfinance and financial inclusion landscape has evolved, our audience has expanded, and FinDev Gateway has changed accordingly to keep up with the needs of this evolving sector.

Today’s FinDev is an interactive knowledge-sharing platform that engages a more diverse audience through publications, blogs, webinars, communities of practice and events. We now cover a wide range of topics beyond traditional microfinance. While microfinance practitioners continue to be an important part of our audience, FinDev Gateway users include digital financial service providers, technology firms, investors, and others who work more broadly on financial inclusion. The new name is more inclusive and better reflects what FinDev Gateway is today, not what it used to be.