Global success factors of viable microfinance and implications for China

Microfinance as a development tool has been gaining importance since it emerged in the 1980s. The future of microfinance will be determined in populous countries like China and India. Thus, it is crucial to understand the drivers of successful microfinance in these markets. Three globally successful best practice case studies are presented to determine the overall success factors of viable microfinance (Grameen Bank in Bangladesh, FINCA International, and BancoSol in Bolivia). China has experienced substantial growth as well as success in its poverty reduction efforts in the past. However, rising social tensions have led to a different approach in which microfinance emerged in the country. To determine the situation of microfinance in China a pioneer project SPPA (Social Development Program for Poor Areas) is analyzed. Overall, microfinance proved not a universal tool against poverty reduction ? but if set in place properly it can increase social and material well-being on an individual level and contribute within an overall poverty reduction strategy.