Scaling up poverty reduction: case studies in microfinance

The CrediAmigo microfinance program mounted by Brazil's Banco do Nordeste (BN) shows how an international financial institution like the World Bank can be a useful catalyst in the development of microfinance retail capacity. The World Bank's patient, phased support to BN as it designed, launched, and nurtured CrediAmigo goes against the common perception that multilateral banks always focus on large near-term disbursements to the detriment of longer-term capacity building. In five years, the CrediAmigo program has provided microcredit to over 300,000 of Brazil's working poor and is financially sustainable. Most of these families live on less than two dollars per day, and work in the cities and towns of the northeast region. Even more importantly, CrediAmigo has demonstrated to the development community throughout Brazil that microcredit can be delivered sustainably, on a large scale, and with great impact on low income families. Prior to the success of CrediAmigo, no microcredit program in Brazil over the past 30 years reached more than a few thousand clients. Today, although there are a large number of well-funded public and private initiatives throughout Brazil, CrediAmigo stands alone in the scale and effectiveness of its achievement.