Case Study

From Project to Institution: AFD and Crédit Rural de Guinée Invest in Rural Finance for the Long Term

Providing financial services to the poor and foregoing financial viability - is it worth the risk?

This case study examines how Agence francaise de development (AFD) made a long term commitment to provide financial services to very poor rural customers in the Republic of Guinee through a network of rural community banks.The paper presents:

  • An overview of the beginning and development of the project;
  • The project's status in 2004;
  • AFD's rural finance strategy, which included:
    • Significant investment over the long term;
    • Creation of human resource capacity;
    • Ensuring local governance;
    • Developing a supervisory model;
    • Moving form project to institution.

Finally, the paper states that:

  • AFD chose to support the task of building from nothing a broad network of grassroots financial institutions to serve the rural poor; this decision required long-term commitment, extensive resources and a willingness to forego financial viability in the medium-term;
  • It has succeeded in building a nationwide, pro-poor institution that plays an important role in the country's local development;
  • It is unlikely that AFD will repeat such a long-term project in the same manner.

About this Publication

By Brusky, B. & Goodwin-Groen, R.