The Need for Speed

Abstract

Microfinance has been a lifeline for many low-income people at the base of the pyramid, helping them break the cycle of poverty and improve their lives. Yet the rapid growth of the microfinance industry, combined with limited financial literacy among its customers, made it particularly vulnerable during the 2008-2009 global financial crisis. To expand short-term financing solutions to the microfinance industry following the crisis, to keep credit flowing during a period of unprecedented financial strife, International Finance Corporation (IFC) launched the microfinance enhancement facility, one element of its comprehensive counter-cyclical crisis response package. A timely response was critical, and implementation risks were high. This smart lesson shows how strong cooperation with partners and the decision to develop an outsourced model contributed to the success and reliability of this crisis-response initiative.