Knowledge Bank

This paper explores the viability of microenterprise credit programs funded by the Inter-American Development Bank, It provides a conceptual framework that emphasizes the importance of financial management and of quality of services for the success of the program and institutional survival. It evaluates four programs, in Paraguay, Colombia, Mexico, and the Dominican Republic, from the perspective of this conceptual framework. Lessons learned include the need for adequate information systems that focus on institutional viability, rather than on beneficiary impacts; the need for the organization to be concerned about self-sufficiency and growth; the strengths of a minimalist approach; the importance of positive real interest rates; and the strong need for portfolio diversification.