Banks in microfinance have the potential to profitably service the microfinance market in developing countries. Existing commercial banks have branch networks, access to capital, diverse financial products, and qualified human resources, providing the fundamentals to launch and grow successful microfinance businesses. Over the past decade, banks have entered the microfinance market, and some have shown promising results in terms of profitability and growth. A review of key internal factors will help determine the feasibility and commitment of a bank’s entrance into microfinance. Banks with higher potential to succeed at microfinance will demonstrate specific characteristics such as an underutilized branch network located near microentrepreneurs, retail banking operations and culture, and internal leadership that understands and is committed to microfinance. Most important is to approach senior decision makers in the bank to discuss the potential returns of microfinance and secure their commitment to a sustainable microfinance strategy. Banks that do decide to enter microfinance usually require some form of outside technical assistance to design and launch a microfinance program. This assistance is necessary so the banks can learn from best practices and others’ mistakes and to help them keep microfinance a priority during the critical start-up and initial expansion phases. The most common areas in which banks require assistance are business planning for microfinance; evaluating and establishing the appropriate legal structure and organizational design; developing loan product, policy, and procedures manuals; business process reengineering of operating processes; evaluating legal options for nontraditional collateral and contract enforcement; customizing existing products; selecting and training staff and developing the appropriate organizational culture for microfinance; and customizing information and risk management systems. Support for development of an enabling legal framework and market infrastructure facilitates entrance and expansion of banks in microfinance. Improvements to the financial sector’s legal framework, such as clearer and more consistent laws and norms, encourage and facilitate bank entrance and expansion in the microfinance market. Market infrastructure that includes elements such as credit bureaus that work with microfinance clients encourages competition and risk management, both of which facilitate entrance of diverse institutions, including banks, into the microfinance market. Banks continue to face challenges in designing and implementing microfinance programs. Defining the target market is a key challenge, as banks usually do not begin by serving the poorest microentrepreneurs and day laborers. However, they can provide an important array of products and services for many low-income clients as part of the financial services network in any economy. It is useful for the bank to conduct a client and product segmentation process to define microfinance and avoid unnecessary internal competition for the same clients with other products or departments in the bank.