Transforming nongovernment organizations (NGOs) into regulated financial institutions has added an element of diversity to the microfinance industry. This process started when Fundación para la Promoción y el Desarrollo de la Microempresa (PRODEM) became BancoSol in Bolivia in February 1992. Between September 1997 and the end of 2004, a total of 16 transformations were reported in Cambodia, India, Mongolia, Nepal, Pakistan, and Philippines. Although the number is small, the overall influence on the industry is great. In some countries, transformed institutions have performed much better than conventional banks both in terms of outreach and profitability, and many of these institutions have become flagship microfinance institutions. They have improved their governance and risk management, and most have begun to offer a broader range of services including deposit facilities and money transfers. To finance their growth, they tap capital from a range of sources including socially responsible investors and in a few cases the private sector and the International Finance Corporation. Some people expressed fears that transformed NGOs would move away from serving the poor; however, a 2004 study published by ADB—Micro Success Story? Transformation of Nongovernment Organizations into Regulated Financial Institutions—concluded that transformation has not only integrated the microfinance industry into the broader financial system, but also in most cases it has had a positive effect on both the breadth and depth of their outreach. Virtually, all transformed institutions in Asia are now serving a larger number of poor households than they did previously.