Banking on the Poor: Unleashing the Benefits of Microfinance

This policy brief aims to help practitioners and policymakers understand the financial services needed by the poor. In the last years research and experience have shown that the demand of poor households for financial services has been significantly underestimated

The key-points of this policy brief are:

• Borrowing helps households achieve food security and alleviate their poverty, but it is not enough;
• Savings services are required to enable poor households to manage their resources over time and plan their investments;
• Access to insurance services is fundamental to tackle emergencies such as natural disaster, illness or drastic reduction of the prices of their products;
• Microfinance programmes must fit the specific context of a particular area and its population;
• Credit access can have a significant impact on poverty only if other problems, such as lack of infrastructures, markets, improved agricultural technology and social services, are addressed.

To conclude, this policy brief invites practitioners and policymakers to:

• Strenghthen financial networks;
• Integrate microfinance in antipoverty strategies;
• Provide the regulatory network.