2.2 Formalizing Informal Methods of Financial Intermediation: Microfinance in Africa - Experience and Lessons from Selected African Countries

Guest post by: International Monetary Fund
Become an Author

Free PDF Download
References: Stock Market Development in Sub-Saharan Africa - By International Monetary Fund

(IMF Working Paper, Prepared by Anupam Basu, Rodolphe Blavy, and Murat Yulek1, September 2004)

Traditional informal systems for the collection of savings and for lending have provided
substantial insight for the operations of licensed MFIs in African countries. The use of
informal traditional methodologies by licensed MFIs has been instrumental in mobilizing
savings from lower-income households and giving them access to financial services that are similar to those provided by the formally regulated financial system. In particular, licensed
MFIs have benefited from interacting with informal players in two ways:

• First, savings mobilization methods developed by informal savings collectors have
been widely replicated. One example is how the susu collector function was
expanded in Ghana by licensed MFIs with “Mobile Banking” services, with officers
visiting rural markets on specific days (Box 2).

• Second, informal institutions have been integrated into the saving and lending
operations of licensed MFIs. Informal savings collectors that place their deposits
with the larger MFIs, may be considered a part of the saving mobilization effort of
the latter; notably, they provide an additional layer in the structure of the
microfinance system. This is the case for example in Ghana, with licensed MFIs
working with Susu clubs (Box 2).

IV Module I Key Principles for an African Model of Microfinance

II. How Can MicroFinance Succeed In Africa?

III. BACKGROUND - Microfinance in Africa

1.0 Introduction: Microfinance in Africa - Experience and Lessons from Selected African Countries

SME's - why is franchising not more popular in Africa

6.0 References: Microfinance in Africa - Experience and Lessons from Selected African Countries

SMEs - surviving the recession in Africa

4.0 The Role of Governments: Microfinance in Africa - Experience and Lessons from Selected African Countries

SMEs - opportunities in Africa

SME's - in Africa the skills challenge grows

Citi Foundation Creates $11.2m Program with SEEP Network to Strengthen Trade Associations

II.D. Foreign Direct Investment: TRADE AND CAPITAL FLOWS BETWEEN CHINA AND AFRICA

III. C. Commercial Policies: THE ROLE OF CHINA’S PUBLIC SECTOR

African Countries Focus on Microfinance: Twelve African Nations Engaged in the International Year of Microcredit to Date

IV. Introduction - MICROFINANCE IN AFRICA: THE MODEL

IV. Module II: Linking Microfinance to Poverty Eradication

SME's - protectionism does it help?

4.1 Objectives and Coverage of the Regulatory Framework: Microfinance in Africa - Experience and Lessons from Selected African Countries

IV. Principle III: Reinforce Microfinance to Advance the African Private Sector

Who are the clients of microfinance? FAQ

Home > African-Accounts > International Monetary Fund > 22 Formalizing Informal Methods of Financial Intermediation Microfinance in Africa Experience and Lessons from Selected African Countries > Google +

Free PDF Download
References: Stock Market Development in Sub-Saharan Africa - By International Monetary Fund

About the Author: International Monetary Fund

RSS for International's articles - Visit International's website
The IMF is an international organization of 185 member countries. It was established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment. Since the IMF was established its purposes have remained unchanged but its operations—which involve surveillance, financial assistance, and technical assistance—have developed to meet the changing needs of its member countries in an evolving world economy.
Click here to visit International's website.

More from International Monetary Fund
V A Markets for Exports AID VS COMMERCE FACTORS INFLUENCING THE GROWING TIES
VII B Demutualization PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA
V B African Demand for Infrastructure AID VS COMMERCE FACTORS INFLUENCING THE GROWING TIES
VII A Automation PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA
Introduction Fiscal Dimensions of Sustainable Development

Share this article. Fund someone's dream.

Share this post and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

2.2 Formalizing Informal Methods of Financial Intermediation: Microfinance in Africa - Experience and Lessons from Selected African Countries

Related Articles

Related Forum Posts

Share this article. Fund someone's dream.


Name:
Email: