IV Module I Key Principles for an African Model of Microfinance

African microfinance is as diverse as the continent itself. An array of approaches have been used, ranging from traditional kinship networks and Revolving Savings and Credit Associations (ROSCAs) to NGOs and development projects, and funded by both the informal and formal financial sectors, as well as domestic and international and donors. Consequently, examples of African microfinance offer an array of lessons of what works and doesn't work. This section summarizes some of the key principles for microfinance institutions (MFIs) to become more ideologically and institutionally sustainable, building their capacity to better serve the poorest while becoming financially viable and self-reliant. It is understood that there is no blueprint for microfinance initiatives; each initiative must adjust to the specific cultural, political, and economic setting in which it operates. Allowing for such diversity, the following general principles are highlighted:

• Pool together people's resources through group organizing • Rely and build upon what people know – tradition • Reinforce microfinance to empower the African private sector • Strive for efficiency Microfinance in Africa: Combining the Best Practices of Traditional and Modern Microfinance Approaches towards Poverty Eradication To learn more about this author, visit United Nations Economic Commission for Africa's Website.

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