Enigmatic though the development process is, two propositions about it have stood the test of time: capital investment is a key factor in determining economic growth and raising incomes; and capital markets in developing countries do not, in a state of nature, work well. One of the few trustworthy findings produced by the massive recent flood of research results on comparative economic growth has been ‘a positive, robust correlation between growth and the share of investment in GDP’ (Levine and Renelt 1992:942); and yet it has proved extremely difficult, especially in recent years, for the poorer countries to finance that investment through the market.1 A very large part of such investment that has taken place in the poorer countries has been financed by public-sector authorities, often heavily buttressed by international aid, and by multinational corporations, with small farms and businesses playing only an insignificant part. The further one proceeds down the income spectrum, the harder it becomes to finance investment by borrowing from private banks, and the enterprises of the poor-both in rural areas and in the shanty towns on the edge of the cities-generally have no access to them at all. This is more than a pity, since the potential for such ‘microenterprise’—using that term to include small farmers-is colossal. This book documents that potential, and seeks to define how it can best be tapped. In particular, it uses our own case-study research to try and learn the necessary lessons from a number of promising experiments in lending to low-income households, and thereby to try and generalise concerning which institutional designs work and which do not.