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p. 12 of 24 BACK | NEXT Introduction Need for a Development Strategy for Microfinance Microfinance in the Asian and Pacific Region ADB’s Microfinance Experience Other Agencies’ Microfinance Experience ADB’s Microfinance Development Strategy Implementation of the Strategy

Microfinance Development Strategy

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Other agencies’ microfinance experience

The surge of interest in microfinance development during the last two decades has led many funding agencies to support microfinance operations (Appendix 6). The collective experience of these agencies confirms that microfinance can play an important role in poverty reduction, and the economic and social benefits of microfinance can be large. The challenge is to mainstream good practice in microfinance operations and increase the outreach to the poor on a sustainable basis. The agencies agree that (i) greater focus is essential on policy framework and building retail institutions that can provide a wide range of services, not just credit; and (ii) the trend toward commercialization must be supported. Their experience also indicates the importance of integrating microfinance operations with the broader financial system to sustain the outreach. There is also a consensus among funding agencies that their role needs to be essentially catalytic.²⁷

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