There is broad recognition within the development community that donors have contributed significantly to building microfinance institutions that serve the poor around the world. But isn’t it time donors updated their investment portfolio to reflect new thinking and the new reality on the ground? It takes a broader ecosystem of providers to deliver the diverse set of services that the poor need. Strategies that remain focused on only one of these providers – MFIs – are missing the bigger picture.
Shifting to a market systems approach has many practical and operational implications, especially around staffing, relationships, monitoring and evaluation, and coordination. USAID is one organization that is implementing these shifts and is sharing some lessons learned along the way.
Can a market development approach that takes a holistic view, tackling problems of demand and supply, policy and regulation be successful in developing a microinsurance market? Based on our experience in Zambia, we would argue that the answer is yes.
A report from CGAP and IFC explains how greenfield microfinance institutions help advance financial market development in Sub-Saharan Africa. The most significant effect of greenfield MFIs appears to be their contribution to professional development in the banking and microfinance sectors.