Jeffry Ashe
, Faculty, Columbia University, Director Grassroots Finance Action, United States
16 February 2026
The question is who assumes the risk, individual borrowers or the group. If it is the group there are many examples - Niger and elsewhere - where two or three borrowers take out loans, default and the group loses its fund. Another question is how much interest the intermediaries are charging. In my experience with savings groups we (Oxfam America's Saving for Change Initiative) that if the group needed more money to lend, the amount the membrs saved could be increased. It is also the case in many groups that the demand for loans is less than the loan fund. External funds are only appropriate for that minority of groups that have enterprises that can expand with an injection of high cost external capital.
The question is who assumes the risk, individual borrowers or the group. If it is the group there are many examples - Niger and elsewhere - where two or three borrowers take out loans, default and the group loses its fund. Another question is how much interest the intermediaries are charging. In my experience with savings groups we (Oxfam America's Saving for Change Initiative) that if the group needed more money to lend, the amount the membrs saved could be increased. It is also the case in many groups that the demand for loans is less than the loan fund. External funds are only appropriate for that minority of groups that have enterprises that can expand with an injection of high cost external capital.