Commercial banks moving into microfinance: which market entry model works best?

This study examines the performance of business models used by commercial banks to enter the microfinance industry. The purpose of the study was to provide a high level indication of whether there is a model or models that yield better success than others. To conduct the research, four commer cial market entry models were chosen, and analysis of secondary data from the MixMaket dataset was completed compare model performance. Results indicated based on the methodology that the “service company” model was the most successful market entry model, and that a “commercial bank providing infrastructure and systems to a microfinance institution” may be a close contender. The results of this study are of strategic value to a commercial bank considering entry into the microfinance market.