Microfinance and Enterprise Development (MED): Effective Tools to Eradicate Poverty?

This report summarizes key points raised in Microfinance and Enterprise Development (MED): Effective Tools to Eradicate Poverty? Speaker's Corner held October 14-16, 2008.

The discussion sought to identify financial and enterprise development products and services needed by the very poor, as well as the most effective sequencing for their delivery. The forum also discussed the use and utility of poverty assessment tools. Key points that emerged from the discussions include:

• Savings and insurance are more relevant to the very poor than credit;
• Most successful sequencings start with savings, often preceded by transfers and non-financial services;
• Challenges include lack of infrastructure, absence of service providers in rural locations and product designs that do not meet the needs of the poor;
• Many MFIs are using new poverty measurement tools that are both, user friendly and cost effective;
• Embedded services and clustering work well to reach the very poor.

Finally, participants believed that effective approaches for reaching the very poor should be demand-driven and adapted to the local context. They should also incorporate lessons learnt from the successes and best practices of other programs.