Large segments of low-income populations in Latin America and the Caribbean –particularly women, ethnic groups, youth, and those living in rural areas— still have limited or no access to credit, savings and other financial services. Key factors preventing microfinance institutions (MFIs) and other financial intermediaries (FIs) from expanding their services to these segments are:
- High costs of entering and delivering services in rural markets;
- Funding constraints and institutional weakness that make it difficult to implement good practices, introduce appropriate financial and delivery technologies, and operate efficiently;
- Successful models are neither fully developed nor well-known in the region.
The MIF aims to increase access to financial services by underserved microenterprises and low-income populations in rural areas. To this end, the MIF seeks to expand the supply of sound microfinance services in these areas by improving the capacity of financial intermediaries to reach underserved clients living in those locations.
- Help MFIs to adopt cost-effective mechanisms that deliver microfinance services and manage risks (through development, replication or adaptation of appropriate business models, technologies and innovations), as well as to apply good practices and develop appropriate product bundles, in order to effectively penetrate rural areas.
- Facilitate access to financing for MFIs with characteristics, terms and conditions that are adequate to allow them to launch and sustain credit operations in rural markets (i.e. longer term, local currency, etc. thereby speeding up the provision of credit, savings and other microfinance services to the target populations.
Results and Impact:
- An increase in the number of poor households that receive adequate financial services;
- Underserved entrepreneurs and low-income individuals in rural areas improve their access to credit, savings and other financial services;
- An increase in the number of active clients in rural areas being served by microfinance operators with credit and other financial services;
- An increase in the microfinance gross credit portfolio in rural areas;
- New points of services (POS) operating in rural areas.