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Publication Detail
FDC 1998-08: Second Tier Microfinance Institutions in Asia

Second tier microfinance institutions are those which channel funds from the government and/or donor agencies to individual "retail" MFIs at concessional interest rates. This article reviews the experience of such institutions in a number of South and Southeast Asian countries Th findings of the study include: * Second tier institutions can effectively channel government and donor agencies' support to MFIs, * These institutions can make the microfinance sector more effective by setting and enforcing performance and reporting standards, * Such institutions can monitor and evaluate MFIs performance for government and donor agencies, * An effective second tier insitution can also ensure MFIs operate on a level playing field. Improving the efficacy of MFI roles means establishing and adhering to rigourous standards in more countries. Authors state that second tier institutions should: * Not expand too rapidly and avoid restrictive interest rate policies, * Fund scaling-up institutional development and equity as well as lending, * Avoid becoming politicised.

PinoyME Foundation
Authors Keywords
McGuire, Paul B.; microfinance; microfinance institutions;
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