Effective Donor Strategies to Support Microfinance Associations

This document is a technical note for investors and various donor agencies. It describes the role of Microfinance associations (MFAs) and the value added services they provide to microfinance institutions (MFIs).

The document deals with the following:

• An introduction to MFAs and various characteristics associated with them;
• The guidelines followed to access the membership of these associations;
• The importance of MFAs for the growth of MFIs, and the different roles played by MFAs in promoting MFIs;
• The reasons for which the investors/donors should support MFAs;
• The possible manner in which investors/donors can support these associations;
• Different stages in the development of the Microfinance market, and the role played by MFAs in it;
• Support to institutional sustainability, financial viability and other supporting activities of MFAs.

Further the document highlights the following:

• Checklist for investors/donors to evaluate the performance of MFAs;
• The process and steps involved in funding MFAs;
• Standards for MFA effectiveness, key MFA activities at each stage of development, and MFA performance indicators.