Strategies and Structures for Commercial Banks in Microfinance

By Glenn Westley (07/06, MSM-132, En, Es)

One of the critical decisions that bankers looking to serve the microenterprise market niche must make is whether to do microlending in house or through some sort of external organization such as a service company or subsidiary. Up until now there really has not been a comprehensive set of guidelines available on how to make this crucial choice. In addition to providing such guidelines, the paper discusses other best practices banks should follow in order to be successful in microlending.

The opinions expressed herein are those of the author(s) and do not necessarily represent the official position of the Inter-American Development Bank

Permission is granted to reproduce this paper in whole or in part for noncommercial purposes only and with proper attribution to the author(s), the Sustainable Development Department, and the Inter-American Development Bank.

Last updated: 06/13/07