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FDC / The Role of Commercial Banks in Microfinance, 1998

The Role of Commercial Banks in Microfinance, 1998

At present some 200 million households of the self-employed poor in the Asia-Pacific region have no access to the formal financial system, with institutions such as commercial banks reaching only the top 25 per cent of populations. Yet the evidence indicates that microfinance can be profitable for commercial banks. Based on interviews with bankers in the Asia-Pacific region, this report considers the experience of commercial bank engagement in microfinance and the factors which appear to underlie success. It also deals with the role of government in providing a supportive environment, and how donor agencies can encourage greater commercialisation of microfinance.