Even in countries where microfinance is firmly established there are wide gaps in terms of coverage. Only 15% of the rural population of Latin America and the Caribbean has access to formal financial services. And although people continue to move from the countryside to cities, lower income individuals tend to end up in marginal urban areas where banks are rarely present.

To work in these underserved areas, microfinance institutions need to use cost-effective mechanisms, appropriate technologies and risk management tools. While there are some successful cases in this region, new models must be developed and more capital must be attracted to these markets.

The MIF will fund pilot projects to test innovations in rural financial services and provide financing to microfinance institutions with effective models to serve low-income clients in the countryside. For marginal urban areas, the MIF will finance studies on specific markets and provide financing to microfinance institutions committed to serving those populations. The goal is, over a five-year period, to encourage at least 45 microlenders to expand into rural and marginal urban areas.