Microfinance in Africa: Combining the Best Practices of Traditional and Modern Microfinance Approaches towards Poverty Eradication
This report examines microfinance as a strategy for poverty eradication in the African context.
The report proposes a microfinancing model that could be adapted to the specific microfinance contexts in Africa. It suggests that this model be based on the principles of pooling together people's resources through group organizing, and relying and building upon what people know. The model should reinforce microfinance to empower the African private sector and strive for efficiency.
Microfinance initiatives are most likely to succeed in a supportive national, regional and international environment. The report presents the following lessons that scale up through the state to the global community:
- Acknowledge and empower African people;
- Establish realistic expectations that are practical and culturally sensitive;
- Conduct research to understand and support microfinance initiatives;
- Adopt policies supporting microfinance infrastructure;
- Create supportive legal environment;
- Develop standards and assessment tools;
- Transform public structures;
- Support microenterprise initiatives;
- Reinforce staff training;
- Utilize pre-existing structures like Postal Savings Banks;
- Promote networking and cooperation among actors at all levels in design, management and assessment of microfinance initiatives.