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Lesson
Key success factors are government buy-in and an appropriately designed program. The key factors that contributed to the success of the MDP were (i) the strong commitment of the government and support from stakeholders to develop the sector and achieve sustainable microfinance; and (ii) a well-designed program that appropriately addressed the key constraints, accompanied by TA to support the program objectives and a grant for capacity development.

Project Number: 38579-013
Project Name: Microfinance Development Program
Report Date:
Lesson
Developing the microfinance sector entails a comprehensive approach that addresses key constraints at all levels. First, it entails enhancing the policy and regulatory environment. Second, it means developing the market infrastructure. In the case of the MDP, it was developing and adopting the performance standards for microfinance and drafting the bill for the credit information system that was successfully passed into law. Third, it means developing the capacity of MFIs for sound and sustainable microfinance operations.

Project Number: 38579-013
Project Name: Microfinance Development Program
Report Date:
Lesson
Vigilance needs to be exercised in maintaining market-based principles for sound and sustainable microfinance operations. The issuance of EO 558 initially threatened the foundation of the government’s market-based financing strategy for the sector. It did not have any significant adverse impact on the policy environment, as the market-oriented framework was already well established and institutionalized in the sector.

Project Number: 38579-013
Project Name: Microfinance Development Program
Report Date:
Lesson
NAPC’s information system capacity should have been assessed earlier. An assessment of NAPC’s information system should have been made at the formulation stage. Policy action and TA could have been incorporated in the program design to achieve an effective and functioning information system.

Project Number: 38579-013
Project Name: Microfinance Development Program
Report Date:
Lesson
The program has successfully eased the constraints to expansion of microfinance services, but outreach to the poor needs to be improved. Within the broad context of inclusive growth, the growth and commercialization of the microfinance sector increased access to financial services, created jobs, and increased financial literacy. However, outreach to households below the poverty line remains limited.

Project Number: 38579-013
Project Name: Microfinance Development Program
Report Date: