The Rural Finance Landscape: A Practitioner's Guide
This guide describes current savings, lending, and insurance practices. It identifies service providers working in the informal, semi-formal and formal sector, and discusses current approaches and methodologies. The guide targets those who want to know more about rural finance and development practitioners concerned with identifying appropriate financial services for their projects. The number of MFIs and clients has increased rapidly in recent years, but rural areas and marginal groups have not benefited equally from this growth. Therefore, new approaches are being developed to serve modern agriculture as well as marginal rural areas and groups. Study findings include:
- Saving is the most important entry point for those planning to provide financial services for farm households;
- Microfinance programs that supply short-term credit are most suitable for producers and traders;
- Microfinance programs are experimenting with insurance systems;
- Most poor rural households rely on informal sector providers;
- Banks or microfinance organizations can help regions and groups that are well-integrated into the market economy.
Finally, putting savings first, relying more on community-based structures and providing proper technical support to clients can ensure appropriate and sustainable financial services for the poor.