Microfinance Risk Participation and Guarantee Program
- Across Asia and the Pacific, many microfinance institutions still struggle to obtain commercial funding to grow and meet the demands of low-income segments
- ADB's Microfinance Risk Participation and Guarantee Program fills market gaps by sharing risks to facilitate local currency lending to the #microfinance sector
- ADB's #microfinance program is open to financial institutions that meet ADB's eligibility criteria and due diligence requirements
What is the program about?
For individuals, families, entrepreneurs and small businesses, access to finance is often cited as a primary obstacle in their path of self-employment and economic development. For the most part, this is the target market of microfinance institutions (MFIs). Across Asia and the Pacific, many MFIs struggle to obtain the commercial funding they need to grow and to meet the demands of their micro-borrowing clients, a vast majority of which are women.
ADB's Microfinance Risk Participation and Guarantee Program is a credit enhancement and a risk-allocation tool, designed to address a market gap and promote local currency lending to MFIs. ADB partners with micro-finance institutions, to increase their access to local currency funding and address the financial needs of millions of people, at the base of the pyramid across the region. Given its risk-sharing structure, the program encourages private sector participation on market-determined terms.