How CGAP Member Donors Fund Microfinance Institutions

What are the structures, funding instruments, procedures and points of entry within each agency?

This paper presents the results of a questionnaire that was set for CGAP donor members (including bilateral and multilateral agencies). Questions included:

  • Where in the agency structure does microfinance fit?
  • What countries or geographic regions are priorities for the agency?
  • What instruments are provided (grants, loans, equity, etc.) to MFIs?
  • What are the procedures for accessing support from the agency?

Finds that:

  • Most donors do not have a focal point or a central unit for microfinance;
  • While almost all of the bilateral donors work globally, several donors have an emphasis on Africa;
  • The majority of bilateral agencies provide grants and/or soft loans, and in limited cases, equity to MFIs. Regional and multilateral development banks typically provide loans to governments, although several have opened microfinance facilities for direct financing of MFIs;
  • Several bilateral institutions provide funding directly to MFIs by channelling funds through Northern NGOs. Yet others, such as Germany and Japan, fund via governments. All of the regional and multilateral development banks fund governments.

[Author's abstract]

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About this Publication

By Malhotra, M. & Chidzero, A.