A proposal for sustainable development through microfinanceThe following proposal summarizes from the history of the microfinance sector, in particular its successes and failures, a model for the development of a sustainable microfinance initiative. At the heart of this summary is the analysis of the strengths and weaknesses, challenges and opportunities, and characteristics of three well-managed microfinance institutions (“MFIs”): Grameen Bank (“Grameen”), Compartamos and Friendship Bridge (“Friendship”). . These analyzes highlight the strategic leverage points – business strategies, organizational structures, financial reporting transparency, performance measurements and organizational objectives – that determine the success of microfinance initiatives. These strategic leverage points, in turn, shape the framework for developing a prudent microfinance initiative. Microfinance evolved from Muhammad Yunus's microcredit strategy to alleviate poverty by providing small, non-collateral short-term loans to the poor. In short, Yunus founded the microfinance institution Grameen Bank after a successful experiment in lending to poor women in Bangladesh revealed that the poor are able to repay debts at a high rate and can benefit from access to credit. The high repayment rate, around 98% according to Yunus, meant that a commercial bank could become financially sustainable by providing loans to the poor as a method of alleviating poverty. Furthermore, access to credit provides the poor with the ability to lift themselves out of poverty. Grameen's rapid success has led to the popularization of microfinance's ability to alleviate poverty and, as a result, provides valuable insights into effective microfinance business strategies, ... mid-article ... that future competition would force Compartamos to reduce its taxi. ultimately if it were egregious. Compartamos has leveraged its organizational structure to achieve its goal of growth and financial sustainability. Compartamos' emphasis on profitability and banking organizational structure resulted in high-quality reporting, rapid growth and, through its IPO, provided evidence that microfinance could provide significant returns to investors while helping the poor. However, Compartamos' financial success is argued to exploit the poor through high interest rates and microfinance mission drift. These strengths and weaknesses highlight the limitations in pursuing financial performance versus social impact in the microfinance sector. The history of the microfinance sector provides a framework for understanding why some MFIs are successful and others are not..