Apex Institutions in Microfinance: Donor Brief

The paper states that apexes are attractive because they permit donors to pass the difficult and time consuming task of MFI selection to a local institution that is assumed to have the requisite skills. Futhermore, donors often use apex institutions to deliver funding and technical services in countries where MFIs appear too small or numerous for direct relationships. It argues that funding majority of apex institutions in microfinance have unfortunately produced disappointing results often because they were set up in countries without a critical mass of good MFIs with the capacity to absorb apex funding. Specifically, the paper provides answers to the following questions:

• What is an apex institution?
• How have apexes performed?
• What are the characteristics of a good apex institution?
• What are the challenges faced by apex institutions?
• How can donors support the development of good apex institutions especially in the area of designing apex-donor relationship and operations?

Also available in French, Arabic, Russian and Chinese here.