Microcredit in transitional economies

As a handbook for new microcredit programme managers, this report summarises the key building blocks of programme design and current experiences in efficient programme operations. It is organised into the following sections: Chapter 1 provides an introduction to microenterprise credit, summarises the experience of programmes in both developing countries and North America, and discusses the potential role of microcredit in transition economies. Chapter 2 focuses on the economic environment of the transition economies and its implications for the design of microcredit programmes. The chapter describes the business and development infrastructure currently available to support these programmes and microentrepreneurs, and it indicates opportunities for the development of microcredit in transition economies. Chapter 3 describes four existing micro and small-scale credit programmes and how they have operated successfully in their respective contexts, given their different development objectives and target customers. These four programmes highlight the challenges facing microcredit programmes in transition economies and the main factors for success. Chapter 4 reviews main components, that can lead to the design of an effective, local programme. These building blocks concern context, mission, customers, and resources. This chapter details the steps in developing a clear programme mission and a strategic plan as well as appropriate institutions in making an assessment of local customers and markets; and in defining the credit and noncredit products and services to be offered. Chapter 5 reviews the fundamentals of programme operations, including effective lending methods, technical assistance delivery, credit and portfolio management, financial and cash flow management, and staff training and development.