This spring, Grantmakers Without Borders (Gw/oB) will release what we hope will prove a valuable resource for grantmakers around the world: a funders’ guide to microfinance. This undertaking was prompted in part by our observation that microfinance has become a dominant anti-poverty strategy among funders, pulling millions towards microfinance and away from other proven development strategies and critical services.
Gw/oB felt a responsibility to look beyond the oft-cited high repayment rates and the heroic narratives of successful borrowers to better understand the strengths and weaknesses of microfinance, to learn if it was indeed realizing its purported effects, and to support donors as they evaluate the role microfinance plays in their grantmaking.
Another concern to Gw/oB: the marked silence from the voices of people most affected by microfinance. We do hear from the most successful borrowers, but what about the legions of others? What are they saying about their experience? What role, if any, do they play in designing and evaluating microfinance programmes? The lived experiences of borrowers became central to Gw/oB’s exploration.
The guide explores the history and evolution of microfinance, prevailing arguments from advocates and critics about the sector, and philosophical differences on models of delivery and measurements for success. It explores recent research on microfinance and offers cautionary tales and inspiring case studies that broaden current understanding of social entrepreneurship and the notion of inclusion. Finally, the guide offers a series of principles for funders to consider as they determine if and how to support microfinance within their own grantmaking.