Microfinance services are financial services that poor people desire and are willing to pay for. The term also refers to the practice of sustainably delivering those services. More broadly, it refers to a movement that envisions “a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers.”

Key principles of microfinance were developed in 2004 by Consultative Group to Assist the Poor (CGAP) and endorsed by the Group of Eight leaders at the G8 Summit on June 10th, 2004. Among the key principles, summarizing a century and a half of development practice, are the following:

• 1. Poor people need a variety of financial services, not just loans.
• 4. Microfinance can pay for itself, and must do so if it is to reach very large numbers of poor people.
• 5. Microfinance is about building permanent local financial institutions.
• 8. The job of government is to enable financial services, not to provide them.
• 10. The key bottleneck is the shortage of strong institutions and managers.^[3]

 Those in the micro world leading the way include Grahmeen Bank (video above) as well as www.kiva.org - see the video below.