Knowledge Bank

The basic assumption of this paper is that microenterprises in a country such as El Salvador may be credit constrained. Removing such a constraint is not easy. This paper develops criteria for success of microfinance programs that alleviate those constraints. These criteria include outreach and sustainability. Outreach involves numbers of clients, their poverty profile, and the quality of services provided. Sustainability involves financial viability and organizational permanency. The importance of financial viability is stressed. Examples of successful microfinance organizations illustrate the criteria.