This report looks at the respective role of official development finance institutions (DFIs) and private lenders in funding microfinance institutions (MFIs). It starts from the premise that as the microfinance industry matures; its growth can and should be financed by private resources. The role of development finance institutions is to pave the way for those resources: DFIs should only go where private lenders don’t yet dare to tread and act as catalysts for private funding but they should not compete with it.