Studying the Past, Looking to the Future: How the Game Has Changed
How the Game Has Changed
USAID launched the Global Development Lab earlier this month to test 200 to 500 innovations over the next five years and identify game changers like Oral Rehydration Therapy or Microfinance. In thinking back at the history of the microfinance field, I wondered how many of us know about the foundational role USAID played in building the microfinance industry and helping to shape today's global movement for financial inclusion. While a key theme in microfinance is the shift from donor funding to private sector capital, the narrative around the story brings to life nuances and creative tensions between poverty and sustainability advocates in creating this game changer.
Microfinance has evolved from a focus on understanding the importance of microenterprises for the survival of low-income households in the 1970s to providing credit for microenterprise development in the 1980s to building healthy financial institutions for the poor in the 1990s to developing a broad array of demand-driven credit, savings, insurance, and payment services to help poor households manage risk in the 2000s to today’s focus on financial inclusion for all, largely through low-cost, scalable digital finance and payment systems. Throughout this journey, USAID has played a key role.
Over the next six weeks, we will examine microfinance’s evolution and reflect on USAID’s investments and thought leadership in this field. As we explore our accomplishments, challenges, and lessons learned, we hope you will follow along through this series. We heartily welcome your thoughts and recollections on the journey so many of us have shared.