A credit enhancement and risk-allocation tool, designed to promote local currency lending by commercial banks and financial institutions to microfinance institutions.
Across Asia and the Pacific, many small entrepreneurs struggle to find loans for their businesses. Microfinance institutions (MFIs) are equally challenged in accessing commercial financing.
ADB, working with partner financial institutions (PFIs), launched its Microfinance Program (MFP) in 2010 to encourage international and local banks to increase their lending to MFIs.
Expand the risk appetite of PFIs by sharing the default risk on their MFI loans and increasing the flow of commercial financing for this sector
Help MFIs access local currency loans, diversify funding options, and build long-term lending relationships with partner banks/financial institutions
Help meet the financing needs of micro and small enterprises (MSEs)
Make credit more accessible to women—99% of MFP's clients—for income generation, livelihood activities, and overall well-being (e.g. through micro-housing and education loans)
Promote responsible lending practices and help build organizational capacity for MFIs
From 2010 to 2022
new loans supported
approximately 98% are women
partner institutions across ADB DMCs
A credit enhancement and risk-allocation tool, designed to promote local currency lending by commercial banks and financial institutions to MFIs. Under the Program, ADB shares the default risk—usually up to 50%—on wholesale loans to MFIs extended by its partner financial institutions.
MFP is working with regulated institutions that offer financing for individual micro-borrowers, financing for agriculture and farm-based activities, loans to MSEs in the informal sector, loans for micro-housing, and related activities.
ADB works with regulated commercial banks and financial institutions, including asset management companies, with established focus and track record in promoting financial inclusion and financing for achieving the Sustainable Development Goals.