Microfinance

What's at Stake

Billions of people worldwide are trapped in a cycle of poverty, because they lack access to the financial services that would allow them to secure a loan and invest in their future. Microfinance addresses this problem by enabling people who are unserved by conventional financial service providers to gain a small line of credit, savings account, or insurance policy. With a loan as small as $40, a woman in India can start a business and provide for her family.

Despite the promise of microfinance to serve the poor worldwide, only a fraction of the world’s poor has benefited from these financial services so far. For example, only an estimated 133 million people have been reached by microcredit.

Strategy

We invest broadly in the microfinance industry to accelerate its growth and extend the benefits of financial services to the people who need them. We address specific constraints to growing the sector by helping microfinance institutions (MFIs) gain access to capital; alleviating information, technology, and other resource shortages for MFIs; and building the industry infrastructure needed to serve millions of people efficiently.

We further strive to demonstrate that these ventures can be self-sustaining and profitable, and thus more attractive to traditional investors. We believe this will foster greater competition in the market and create economies of scale that both drive down costs and improve financial services for the poor. The aim: better service for microfinance clients.

Goal

We aspire to make high-quality, affordable financial services widely available to the poor so that they may gain financial security and escape poverty. Women, who are especially vulnerable, can use microfinance services to start a business and earn status in the family and community. When people have access to financial services, they can stabilize their sources of income, build up assets, and plan for the future. We hope these activities will set off greater economic growth in emerging markets and contribute to the revitalization of poor communities.

Portfolio