What is a microfinance network or association?

Microfinance networks are regional- and country-level associations whose members engage in microenterprise lending, including microfinance institutions, credit unions, cooperatives and banks (henceforth “MFIs”). Their members typically have diverse target clientele and often use diverse methodologies. These organizations come together in a network to improve microfinance best practices, share information and coordinate efforts to promote an enabling policy and funding environment for microfinance.

Why are networks vital to the Microfinance Industry?

Microfinance networks play a unique and important role in developing inclusive financial systems in developing countries. They support microfinance institutions with services that improve their institutional performance, advocate for an appropriate enabling environment for microenterprise development, and serve as conduits of fundamental information to its membership.

While networks have varied objectives, many promote transparency in the microfinance industry, represent and address the needs and interests of their members, and improve members’ institutional strength. By adopting and promoting standards for the microfinance sector, networks build public confidence in institutions that handle the scarce resources of low-income people.

Capacity building through the provision of training services is also an essential function of networks. Capacity building initiatives allow networks to improve the efficiency and scale of MFIs, thereby creating a platform for increased sustainability. Finally, MFIs can only become permanent financial service providers if they operate in an enabling legal and regulatory framework. Microfinance networks provide a critical sphere of dialogue where MFIs can reach consensus positions on policy issues. Networks are then able to advocate and lobby to the appropriate government officials for a more favorable regulatory environment.

Essentially, networks function as a critical link between donors, microfinance institutions, and practitioners, representing a focal point for information sharing and collaboration among all relevant stakeholders.

Regional and Country-level Networks

Country-specific networks represent the interests and provide specialized services that are pertinent to the needs of diverse microfinance stakeholders within the domestic sphere. Regional networks extend their outreach and representation to a broader geographical area.

Want to learn more?

To view a presentation on the role of microfinance associations, click here.

To learn more about a Microfinance network in a particular region or country, click here.