Commercialization of Microfinance Perspectives from South and Southeast Asia

Abstract

While microfinance commercialization has been evaluated in a few Latin American countries, relatively less attention has so far been paid to the Asian experience. This report analyzes the major issues surrounding the commercialization of the microfinance industries in four countries in South and Southeast Asia and in the Asia and Pacific region generally. The countries of particular focus—Bangladesh, Indonesia, Philippines, and Sri Lanka—vary considerably in socioeconomic conditions (Table 1.1) and represent different stages of microfinance development and commercialization of the industry. This report reviews the progress made toward commercialization, examines the implications and challenges of microfinance commercialization, and recommends approaches to promote the commercialization of microfinance while preserving the traditional MFI social objective of expanding the poor’s access to financial services. In examining these issues, this report incorporates the perspectives of various stakeholders including microfinance clients and potential clients, microfinance practitioners, government officials, donor community representatives, and academics. It also draws from Latin American experience, as appropriate.