Paper

Microfinance and Non-financial Services for Very Poor People: Digging Deeper to Find Keys to Success

Providing microfinance and non-financial services to the poor
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This paper discusses results of preliminary research by the Poverty Outreach Working Group (POWG) to identify promising approaches for serving very poor people with microfinance and non-financial services.

Most microfinance programs rarely reach the very poor. POWG asked 10 MFIs to submit case studies describing effectiveness of their programs in reaching target clients, measurement of clients’ poverty levels and documentation of program effectiveness. POWG hoped to identify common elements that made these programs successful and recommend areas for further research from these case studies. Findings indicated that:

  • Microfinance providers can reach very poor people by making a deliberate attempt to target them and offering services that suit their distinctive needs;
  • Most studies lack convincing results and are unclear about the extent to which they have succeeded in assisting very poor people to move out of poverty;
  • Role of microenterprise development in assisting very poor people is unclear.

The study found that success in serving very poor people is dependent on understanding critical factors and addressing them realistically and in ways that produce documentable results.

About this Publication

By Poverty Outreach Working Group (POWG)
Published