Aspects of outreach: a framework for discussion of the social benefits of microfinance

TLDR

Microfinance aims to improve the welfare of the poor, yet there is no consensus on how best to achieve this goal. The paper proposes a framework for discussing microfinance outreach based on six aspects: worth, cost, depth, breadth, length, and scope. The framework integrates a poverty approach—where deep outreach offsets limited breadth, length, and scope—and a self‑sustainability approach—where broad, long‑term outreach offsets shallow depth, illustrated using BancoSol of Bolivia. © 2002 John Wiley & Sons, Ltd.

Abstract

Abstract Wide agreement about the goal of microfinance—to improve the welfare of the poor—has not led to wide agreement about how best to achieve that goal. To aid discussion, I propose a framework for outreach —the social benefits of microfinance—in terms of six aspects: worth, cost, depth, breadth, length, and scope. The framework encompasses both the poverty approach to microfinance and the self‐sustainability approach. The poverty approach assumes that great depth of outreach can compensate for narrow breadth, short length, and limited scope. The self‐sustainability approach assumes that wide breadth, long length, and ample scope can compensate for shallow depth. I show how to use the framework for BancoSol of Bolivia. Copyright © 2002 John Wiley & Sons, Ltd.