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p. 10 of 24 BACK | NEXT Introduction Need for a Development Strategy for Microfinance Microfinance in the Asian and Pacific Region ADB’s Microfinance Experience Review Development Impact Lessons Learned Other Agencies’ Microfinance Experience ADB’s Microfinance Development Strategy Implementation of the Strategy

Microfinance Development Strategy : ADB’s Microfinance Experience

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Development impact

Although it is difficult to reliably measure the development impact of financial services, assessments of the seven completed microfinance projects and review of the ongoing projects offer some important insights on the development impact of ADB’s microfinance assistance. In general, the early microfinance projects failed to make a significant contribution to poverty reduction because of their limited outreach. Some projects had a limited positive impact on a small number of clients, but there was no mechanism to sustain this impact beyond the project period. Poverty reduction requires continuous access to a broad range of financial services, not one-time access to loans. Poor infrastructure, sluggish agricultural growth, and limited markets imposed serious limitations on the potential for broad-based growth in rural areas and access to credit could contribute little to permanent improvements in income for clients of microfinance projects under such conditions. Thus, to maximize their development impact, it is essential to integrate microfinance services with other critical measures aimed to reduce poverty.

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