Village Banks, Caisses Villageoises, and Credit Unions - Lessons from Client-Owned Microfinance Organizations in West Africa

This paper assesses the strengths and weaknesses of three types of client-owned, mutual financial organizations in the delivery of microfinance services, including both loans and deposit facilities to the poor.

It draws lessons and policy recommendations for the sustainability of such organizations, including:

• Voluntary deposit mobilization should be emphasized and forced savings de-emphasized;
• Individual lending should be considered in addition to group lending;
• Loans should not be targeted to specific clienteles or uses;
• NGOs implementing village banking programs should realize that building a financial institution is a long-term process that requires several years of intense co-operation;
• A support facility should be in place before any sponsoring agency leaves. This facility would be in charge of providing continuous technical support and auditing services.