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Plenary Session: Financing Microfinance for Poverty Reduction

Workshop Session: Transparency on the Depth of Outreach – Indicators for Programs Performance and New Efforts to Cost-Effectively Measure Absolute Poverty

Microcredit Summit Director Honored

Asia/Pacific Regional Microcredit Summit Meeting of Councils

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Plenary Session: Financing Microfinance for Poverty Reduction

Remarks by David Gibbons

Of course there are some major assumptions and those assumptions can indeed be questioned, but what we have done in India is show that this approach actually works. It is possible to build a sustainable microfinance institution using quasi-equity as a critical component of the project, not of course the whole picture by any means, but as a critical component. And this is quite valuable, I think, to those of you who may wish to start MFIs, who may wish to scale-up existing MFIs. You can look toward quasi-equity to play a critical role. This can remove barriers of entry into the industry, and it can…reduce the capital constraint.

Quasi-equity can help in that expansion, but we need other ways of reducing the capital constraints. And the current thinking is that we need to establish a partnership with banks, interested banks, which don't have the capital constraints and don't have the funding constraints, and try to work with them to do the necessary social intermediation, while they provide the financial intermediation.

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