Supporting Innovations in Microfinance
This paper discusses a CGAP program, Pro-Poor Innovation Challenge (PPIC), which helps MFIs take risks, maintain flexibility, and develop innovative products and services to reach the poor.
The paper states that PPIC recognizes smaller MFIs that have found innovative ways to reach poorer clients, many of them in remote rural areas. PPIC gives cash awards to these MFIs to encourage them to scale up their programs. Launched in 2000, PPIC has awarded 49 grants of up to USD 50,000 each to MFIs in 35 countries. PPIC has helped awardee MFIs to:
- Boost their credibility with public officials, many of whom have turned to the awardees for input on financial sector policies;
- Attract investor interest and grow their assets;
- Access additional funding;
- Generate creative ideas, from new products and services, to new delivery systems and methodologies for underserved client groups;
- Attract other players who have replicated their services, or collaborated with existing programs;
- Take measured risks that they could not have otherwise afforded to take.