Actively studying take-up rates, or participation rates, can help us understand the demand for different microfinance products, and how existing products might be improved to attract more clients and serve them better. This note reviews the evidence on take-up. It first discusses why take-up rates and participation are important, and how they can be measured. It then goes on to review survey data on why people don’t use microfinance products when they are available, and offers guidance on how low take-up rates might be addressed.

This Framing Note is the fourth in a policy series by the Financial Access Initiative exploring various dilemmas which policymakers face across several topics of great importance to financial inclusion. This paper describes the contours of the interest rate policy dilemma, updating previous sources with new theory about consumer behavior and new evidence from the demand side about how clients respond to interest rates; and from the supply side as to what drives the setting of rates. The focus here is not on interest rate policy in general, which would include its use in monetary policy, but rather the interest rate control regime applied especially to small or micro loans.

La conciencia pública sobre la inequidad global ha sido elevada por grupos indignados de ciudadanos, periodistas, políticos, organizaciones internacionales, yestrellas del pop. Los diarios informan regularmente sobre las tendencias de las tasas de pobreza en todo el mundo y sobre campañas globales dirigidas a reducir esas tasas a la mitad. Un ingreso diario de menos de dos dólares por persona se ha convertido en un indicador ampliamente reconocido para definir a los pobres del mundo. El Banco Mundial cuantificó 2,700 millones de personas en esta categoría en 2001 – dos quintas partes de la humanidad. Entre estos 2,700 millones de seres, los 1,100 millones más pobres a duras penas sobrevivían con menos de un dólar al día.

Para quienes no tenemos que hacerlo, es difícil imaginar cómo es vivir con un ingreso tan pequeño. Ni siquiera tratamos de imaginarlo. Suponemos que con ingresos en estos niveles tan imposiblemente bajos, es muy poco lo que los pobres pueden hacer por sí mismos más allá de sobrevivir de manera precaria. Sus posibilidades de salir de la pobreza deben depender, asumimos, ya sea de la caridad internacional o de su eventual incorporación a la economía globalizada. Los debates públicos más acalorados sobre la pobreza en el mundo, por lo tanto, son aquellos sobre los flujos de ayuda y la condonación de la deuda, y sobre las virtudes y los vicios de la globalización. La discusión sobre lo que los pobres pueden hacer por ellos mismos se oye con menos frecuencia. Si es difícil imaginar cómo sobreviviría uno con uno o dos dólares al día, es aun más difícil imaginar cómo se podría prosperar.

Microcredit markets in many regions are becoming more competitive. This is generally a good thing for borrowers.

These two commonly heard statements raise a number of questions for policy makers: How to measure the intensity of competition over time? And is competition among lenders always a good thing for borrowers? Or do credit markets, and microcredit markets in particular, have any special features which may change or modify the conventional view of competition? If so, what tools do regulators have to promote competition? The FAI Focus Note “Competition Policy in Microcredit Markets” provides some initial answers to these questions for policy makers who wish an introduction to the issue. To do this, the Focus Note combines general competition theory and policy with evidence from credit markets and microcredit in particular. Since competition involves winners and losers, the regulator’s dilemma here is identifying and making the tradeoffs necessary to find a level of competition appropriate to the stage of market development and in line with national objectives.

The first global estimate of its kind reveals that 2.5 billion adults do not use formal services to save or borrow.  Who are these ‘unbanked’ populations? Where do they live? How do they survive? And what lessons do these estimates hold for policymakers working to improve levels of financial inclusion for poor populations?

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This Framing Note is also available in Spanish and in French.

La première estimation de son genre démontre qu'il y a 2,5 milliards adultes qui n’utilisent pas de services financiers formels pour épargner ou emprunter. Qui sont ces populations non desservisses? Où est-ce qu’elles habitent ? Comment est-ce qu’elles y survivent ? Et quelles sont les leçons de ces estimations pour les décisionnaires qui cherchent augmenter les niveaux d’inclusion financière des populations pauvres ?

This note reviews why risk management is both important and difficult for the poor, and how access to insurance is being expanded.

Examines claims about returns to capital earned by poor households.

Examines how the poor manage their money through a behavioral economics lens.