Microfinance for Decent Work – Enhancing the Impact of Microfinance: Evidence from an Action Research Programme

In many emerging markets, Micro FinanceInstitutions have significant outreach, providing financial services to thousands, if not millions of small and micro enterprises. Since their primary relationship with these entrepreneurs often involves an enterprise loan, they were able to use that leverage to improve conditions in the business. From 2008 to 2012 the ILO collaborated with 16 microfinance institutions to test a range of approaches to foster social impact through the delivery of innovative financial and non-financial services. Eliminating child labour, fostering the formalisation of enterprises, reducing vulnerability and enhancing business performance through improved working conditions – these are decent work objectives that Micro Finance Intitutions addressed in the framework of the “Microfinance for Decent Work” (MF4DW) action research programme. The results highlighted one key message: that MFIs can achieve desired results if they identify an issue and then focus on that area to help their clients.