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Microfinance Resources

The sources below provide extensive information on a wide range of topics in microfinance including information on hundreds of individual microfinance institutions (MFIs), MFI networks, public and private funds that invest in microfinance, raters and external evaluators, advisory firms, and governmental or regulatory agencies. An expanded list of resources may be found at the back of Transforming Lives $40 at a Time.

CGAP (Consultative Group to Assist the Poor)
Microcredit Summit Campaign
Microfinance Gateway
Mix Market


 Glossary of Microfinance Terms
 Reading List
 Women's Issues
 International Development

 

Glossary of Microfinance Terms

Collateral is an asset pledged by a borrower to secure a loan. Collateral can vary from fixed assets (a car, a sewing machine) to cross-guarantees from peers.

Credit Union is a nonprofit, cooperative financial institution owned and run by its members. Members pool their funds to make loans to one another and elect a volunteer board to run their credit union. Most credit unions are organized to serve people in a particular community, group or groups of employees, or members of an organization or association.

Financial Self-Sufficiency (FSS) is total operating revenues divided by total administrative and financial expenses, adjusted for low-interest loans and inflation. A microfinance institution is financially self-sufficient when it has enough revenue to pay for all administrative costs, loan losses, potential losses and funds.

Housing Finance is a specialized loan that allows households of both microentrepreneurs and wage-earners to finance home improvements or additions. loans tend to be longer-term, and in larger amounts, than traditional microenterprise loans that are focused on providing working capital. Home improvement loans may enhance at-home businesses.

Informal Sector/ Economy is a subset of the economy consisting of self-owned enterprises and the enterprises of informal employers, in both urban and rural areas. Businesses within the informal sector are not registered with any taxation or regulatory bodies. The main features of the informal sector are ease of entry, self-employment, small-scale production, labor-intensive work, lack of access to organized markets, and lack of access to traditional forms of credit.

Microcredit, a component of microfinance, is the provision of relatively small loans to low-income entrepreneurs. Microcredit is often offered without collateral and may be lent to either a group or an individual.
  • Group lending allows a number of individuals to borrow collectively. The incentive to repay is based on friendship and peer pressure; if one member of the group defaults, the other members have often pledged to make up the payment amount. The member who defaults is expected to reimburse the group as soon as possible.
  • Individual lending focuses on one client, usually one with a successful business and a proven repayment record as a group member. Individual
Microentrepreneurs are individuals who own and operate small-scale businesses. Typical microentrepreneurial businesses can include retail kiosks, sewing workshops, carpentry shops, and market stalls selling both purchased and homegrown or homemade foods or other goods.

Microenterprise development has various meanings. It is the term often used in the United States to refer to microfinance. It may also mean the provision of non-financial services and training to microentrepreneurs including business and leadership training, mentoring and financial planning services.

Microenterprise is a business in the informal sector, usually employing fewer than 5 people, and often based out of the home. A microenterprise may provide the sole source of family income, or it may supplement other forms of income.

Microfinance targets low- and moderate-income businesses and households with financial services ranging from loans (microcredit), savings, insurance, transfer services (remittances), and other services such as business training.

Microfinance Institution (MFI) is a financial institution that offers financial and, sometimes, other business services to low- and moderate- income clients.

Microinsurance is a growing sector of microfinance that provides property, health, life, business and climate insurance products to microentrepreneurs and employees in the informal sector allowing them to concentrate more on growing their businesses while mitigating other risks affecting property, health or the ability to work.

Microsavings are deposit services providing low- and moderate-income individuals with a secure place to save small amounts of money, often without minimum balance requirements. Typically, contributions are made weekly along with loan and interest payments. Savings programs allow low- and moderate-income individuals to cover unexpected medical expenses and plan for future investments such as their children's education and their own retirement.

Mobile Technology is mobile phone programs and services that help empower the poor; besides the convenience of connecting with family and friends, also through collecting and sharing timely agricultural and health information and providing safe, convenient purchasing and savings services in both urban, and particularly, rural areas.

Remittances are transfers of funds from people in one location to family and friends living in another location either from one country to another or within a country.

Unbanked describes people who have little or no access to affordable financial services (such as savings, credit, money transfers, insurance or pensions) through any type of formal financial sector organization. Implicit in this definition is that financial services are usually available only to those individuals termed "economically active" or "bankable."

Portions of the Glossary are borrowed from:
Year of Microcredit 2005 Website
Accion International Website
Grameen Foundation Website

 

Reading List

Microfinance

A Billion Bootstraps, Phil Smith & Eric Thurman

Banker to the Poor: Micro-Lending and the Battle Against World Poverty, Muhammad Yunus

Commercialization of Microfinance: Balancing Business and Development, ACCION International, Deborah Drake and Elisabeth Rhyne

Commercialization: The New Reality of Microfinance, Robert P. Christen and Deborah Drake

Defying the Odds: Banking for the Poor, Eugene Versluysen

The Economics of Microfinance, Beatriz Armendariz De Aghion and Jonathan Morduch

The End of Poverty: Economic Possibilities for Our Time, Jeffrey D. Sachs

Kitchen Table Entrepreneurs: How Eleven Women Escaped Poverty and Became Their Own Bosses, Martha Shirk and Anna S. Wadia

Mainstreaming Microfinance: How Lending to the Poor Began, Grew, and Came of Age in Bolivia, edited by Maria Otero and Elisabeth Rhyne

Microfinance By the Numbers, CGAP

Microfinance: Evolution, Achievement and Challenges, Malcolm Harper

Microfinance Handbook: An Institutional and Financial Perspective, Joanna Ledgerwood

The Microfinance Revolution, Marguerite S. Robinson

Microfinance Systems: Designing Quality Financial Services for the Poor, Graham Wright

The New World of Microenterprise Finance: Building Healthy Financial Institutions for the Poor, Maria Otero and Elisabeth Rhyne

Occasional Paper No. 4: Institutional Metamorphosis: Transformation of Microfinance NGOs into Regulated Financial Institutions, Anita Campion and Victoria White, Microfinance Network

Our Money, Our Movement: Building a Poor People's Credit Union, Alana Albee and Nandasiri Gamage

Pathways Out of Poverty: Innovations in Microfinance for the Poorest Families, Sam Daley-Harris

Practical Microfinance: A Training Manual, Malcolm Harper

The Price of a Dream, The Story of the Grameen Bank, David Bornstein

Replicating Microfinance in the United States, James Carr and Zhong-Yi Tong

Rural Credit: Lessons for Rural Bankers and Policy Makers, K. P. Padmanabhan,

Small Customers, Big Market: Commercial Banks in Microfinance, Malcolm Harper and Sukhwinder Singh Arora

State of the Microcredit Summit Campaign Report 2005, Sam Daley-Harris

Women and Microcredit in Rural Bangladesh: An Anthropological Study of Grameen Bank Lending, Aminur Rahman

 

Fifty Ways to Improve Women's Lives: The Essential Guide for Achieving Health, Equality, and Success for All, National Council of Women's Organizations and Martha Burk

In Her Hands, Craftswomen Changing the World, Paola Gianturco and Toby Tuttle

Taking Action: Achieving Gender Equality and Empowering Women, (UN Millennium Project, Caaren Grown, Geeta Rao Gupta, Aslihan Kes and Jeffrey D. Sachs

The Other Side of War: Stories of Survival and Hope, Zainab Salbi

Women in the Material World, Faith D'Aluisio and Peter Menzel

 

International Development

Development as Freedom, Amartya Sen

Guns, Germs and Steel, Jared Diamond

The End of Poverty: Economic Possibilities for Our Time, Jeffrey D. Sachs

The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, C.K. Prahalad

How to Change the World, David Bornstein

The Lexus and the Olive Tree: Understanding Globalization, Thomas Friedman

The Mystery of Capital, Hernando DeSoto

The Poor and Their Money, Stuart Rutherford

The World is Flat: A Brief History of the Twenty First Century, Thomas l. Friedman

The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor, David S. Landes



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