Linkages between formal and informal financial institutions in extending financial services to the poor

Introduction One of the most important innovations in development finance in recent years has been the emergence of microfinance. Millions of very poor people receive and repay small loans, even though they possess few assets or skills. At least two decades of experimenting lead donors and practitioners in developing countries to identify and duplicate best practices – just think about the famous Grameen Bank. However, this so-called financial frontier has been slow to develop in many developing countries. Millions are still not reached with any form of sustainable or reliable finance, with many of the existing providers of microfinance institutions being completely dependant on donor subsidies