How to Focus on Breakthrough Organizations When Selecting MFIs

This paper presented at the ‘Global Microfinance Meeting on Young and Promising MFIs’ that was held from May 30 to June 1, 2001, at the United Nations in New York seeks to:

• Reflect upon Save the Children Federation’s experience with selecting MFIs under the MicroStart Morocco project to become breakthrough organizations;
• Draw out lessons learned that are useful and applicable to UNDP MicroStart and the wider microfinance community.

The paper presents:

• Breakthrough Potential Matrix (BPM) for analyzing young MFIs;
• Initial assessment of breakthrough MFIs using the BPM;
• Midterm indications on whether an MFI will break through;
• Lessons for donors and conclusions.

The author concludes that assessment of breakthrough organizations cannot boil down to mere numbers; the conclusions from using the Breakthrough Potential Matrix are merely indicative of an MFI's potential. But when used alongside traditional microfinance assessment tools, the matrix may challenge the assessor to confront issues such as institutional culture, which are easy to ignore.