How to develop in third world countries a sector of viable financial institutions with sustainable financial services for the whole populace including the poor? During the 90s an answer to that question is being sought in the field of microfinance, which comprises formal and nonformal financial...

Indonesia is a country with a deregulated policy environment in which microfinance institutions (MFIs) abound. Between 1970 and 1993 poverty has been drastically reduced from 60% to 14%. Three factors have been instrumental: explicit government policies, sustained economic growth and, since...