Building Better Lives: Sustainable Integration of Microfinance and Education in Child Survival, Reproductive Health, and HIV/AIDS Prevention for the Poorest Entrepreneurs
by Christopher Dunford

This paper provides diverse examples of microfinance institutions that have responded successfully to the challenge of integrating microfinance with nonfinancial services, without compromising the impacts or sustainability of their microfinance and overall operations. Special attention is given to the integration of microfinance with health education for very poor women, including the promotion of family planning and HIV/AIDS prevention management. The credit and education components reinforce each other by addressing the informational as well as the economic obstacles to health and nutrition.
There is good potential for large-scale, self-financing delivery of microfinance and education together in one efficient and effective service package. The key element is delivery of both services by one field staff. This requires management to make an extra commitment to staff recruitment, training, and supervision. Where operating grants are available to support nonfinancial services, management may prefer to employ two specialized field staffs to deliver the two types of service in parallel to the same clients.

Seven Aspects of Loan Size
by Mark Schreiner

Attempts to measure the depth of outreach in microfinance usually start - and often end - with loan size. But just what is loan size? This paper discusses seven aspects of loan size, each of which affects not only depth of outreach but also profitability. The seven aspects are: term to maturity, dollars disbursed, average balance, dollars per installment, time between installments, number of installments, and "dollar-years of borrowed resources." This paper defines the seven aspects, explains why each one matters, and gives examples of their measurement with data from three Latin American microfinance organizations.

Institutional Alternatives for the Promotion of Microfinance: Self-Help Groups in India
by P. Satish

Microfinance is now an accepted institutional framework for taking financial services to the poor. It is but natural that microfinance should have had tremendous growth in India - the home to the largest concentration of poor. In India the microfinance technology that had a relatively higher growth in the last decade is the self-help group (SHG). This lays stress on thrift as well as credit and also on the linkage between informal groups and formal financial institutions. An important sine qua non in this technology is the institution that promotes the SHGs. In India, SHGs have been promoted by nongovernmental organizations (NGOs), banks and the government. This paper attempts to compare the role of these three institutional variants in promoting the SHGs, their strengths and weaknesses, and the best practices that could be copied from them.

Microfinance Impact Assessments: The Perils of Using New Members as a Control Group
by Dean S. Karlan

Microfinance institutions aim to reduce poverty. Some assess their impact through a cross-sectional impact methodology which compares veteran to new participants and then calls any difference between these two groups the "impact" of the program. Such studies have risen recently in popularity because they are cheap, easy to implement, and often encouraged by donors. USAID, through its AIMS project, encourages this methodology with its SEEP/AIMS practitioner-oriented tools. This paper intends to inform practitioners about the perils of using such a strategy, and suggests a couple of solutions to some of the larger problems with this approach.

Rethinking the Approach to the Microenterprise Sector in Latin America: An Integrating Framework
by Jaime Ortiz

Unavoidable macroeconomic adjustment policies have exacerbated social inequalities in Latin America. As a result, electoral platforms have identified microenterprises as an alternative economic activity to help alleviate poverty. Pursuing an efficient microentreprenurial base requires from governments a comprehensive package of both financing and training strategies. Conversely, microentrepreneurs require a better understanding of their activity in order to set forward arguments that will allow them to enhance their management practices. Government policies towards the microenterprise sector should create favorable conditions conducive to the establishment and operation of financial institutions as well as specialized nongovernmental organizations providing training and consulting. Within that framework, this article attempts to raise awareness of the managerial and policy implications of the interactions between financing and training in affecting microenterprise performance.

Financial Performance of Selected Microfinance Institutions: Benchmarking Progress to Sustainability
by Michael Tucker

A few microfinance institutions (MFIs) have implemented best business practices and made the tranistion to fully regulated financial institutions. Many more are in the process of undertaking this transformation or at least considering it. Rising competition among growing numbers of MFIs for both funding and clients has made improved financial performance a necessity for most if not all MFIs. Financial ratios of 17 Latin American MFIs are compared to benchmark performance ratios for the industry and with commerical Latin American banks. This small sample of data, while useful, also underlines the need for more widespread MFI reporting. Complicating reliance on financial comparisons is a complete lack of standardized measures on how well the poor are being served.

Microcredit and the Rural Poor: A Review of the Maharashtra Rural Credit Project
by Raghav Gaiha

An attempt is made to review the Maharashtra Rural Credit Project (MRCP) - a microcredit scheme - by focusing on the process of implementation and its implications for targeting, empowerment of women, and trade-off between coverage of the poorest and sustainability of this scheme. Attention is drawn to deficiencies in the design and implementation of this scheme that limit the participation of the poorest and the benefits accruing to them. Moreover, it is argued that there is risk of overstating the trade-off between the coverage of the poorest and sustainability of the MRCP if these deficiencies are overlooked.

Book Review
Grameen Bank and Women's Empowerment in Bangladesh: A Review Essay
by Asif Dowla

Book Review
Mainstreaming microfinance: How lending to the poor began, grew, and came of age in Bolivia.
by Monty L. Lynn