A Leap Beyond Microfinance:Bundling Microloans with High Impact Social Services
Inter-American Development Bank (IDB)
The nongovernmental organization Global Partnerships is redefining microfinance. Moving beyond the concept of microloans as working capital, it aims to achieve greater impact in reducing poverty by combining these loans with affordable social investments, such as health services, training and low-cost pensions and insurance. This approach represents a significant strategic leap compared with traditional microfinance lending. It conceives of low-income borrowers not only as economic agents, but also as individuals and family members who need advisory, educational, and health services, among other products, to raise their living standards in conjunction with access to finance. The new Global Partnerships Social Investment Fund 2010 seeks investments in Latin America that are financially sound, competitively strong and with projects displaying an exceptional level of social impact.