Paper

Reaching the Hard to Reach: Summary Document and Guide

Potential of member-owned financial institutions to serve remote rural poor
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This paper summarizes findings of a study that aimed to identify the potential of member-owned institutions (MOIs) and their support structures to serve remote rural populations, particularly the poor. The study, spanning three years, included a literature review and seven case studies. Findings include:

  • Three key drivers of outreach are internal governance, networking and linkages, and regulation and supervision;
  • Governance is one of the biggest challenges for MOIs in remote areas;
  • Linkages help overcome limitations of funds, capacity and scale, but are problem-ridden;
  • Development of effective regulation and supervision is very important to improving MOI outreach;
  • MOIs reach more and poorer markets than other financial intermediaries;
  • Use of groups and associations can reach large numbers quickly;
  • Large, linked or federated MOIs have more scope, but small MOIs compensate with flexibility;
  • Small MOIs are generally cheaper to members;
  • Members value proximity, loan size and quick emergency access;
  • Unlinked, time-bound groups have more potential for quick, sustained outreach.

Finally, providing simple, appropriate regulation, systems and technical support is crucial to strengthening MOIs’' outreach, which fills a void by serving remote, rural areas.

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