This paper is a summary of key lessons learnt by the author, in his years of working in the field of microfinance. They include:
* Lessons for donors in choosing a suitable partner organization:
o Local institutions like non-governmental organizations (NGOs), cooperatives, people�s organizations, banks, etc. make good partners;
o International NGOs can help local microfinance institutions (MFIs) in capacity-building and in getting start-up finance;
o Roles and responsibilities in partnering relationships should be clearly delineated.
* Reasons why NGOs are not good microfinance partners:
o NGOs that do different varieties of work lack focus;
o They are social welfare-minded and lack business skills.
* Reasons why cooperatives make better partners:
o Their cost structure is lower;
o They focus on profitability.
* Lessons about micro-credit and micro-savings:
o Micro-savings are more important than micro-credit;
o Micro-credit is useful to households with income-generating activities;
o The economically inactive need savings services.
* Lessons on MFI performance:
o Performance standards should be established at the beginning of a program and must be regularly measured and reported;
o MFIs should adopt a specific microfinance methodology to achieve efficiency;
o Technical training must be given to MFI staff;
o MFIs should have good accounting and reporting systems;
o It is important to have good governance, management, human resource management and financial performance;
o A network of partner MFIs is a good tool to encourage inter-MFI coordination and practical learning.
