The Consultative Group to Assist the Poorest: A Microfinance Program

This document reviews the first three years of CGAP since its formal constitution in 1995. It presents the plan for its second phase, CGAP2, which began in 1998.

Milestones achieved by CGAP in its first phase include establishing mechanisms for increased interaction and shared understanding among 26 donor agencies and microfinance practitioners, developing and disseminating best practice tools globally, and adopting a performance-based funding approach with MFIs.

CGAP2's strategy is anchored on building MFI retail capacity so as to achieve its mission of significantly expanding access of very poor people to quality financial services from sustainable or potentially sustainable MFIs. CGAP has selected five key themes for this core objective:

• Support development of a critical mass of MFIs that provide financial services to the very poor on a sustainable basis;
• Support changes in donor practices to further improve quality of their microfinance operations;
• Increase MFIs' understanding of poverty outreach;
• Improve legal and regulatory frameworks for MFIs;
• Facilitate commercialization of the microfinance sector.

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