Innovative Approaches to Delivering Microfinance Services: The Managed ASCA Model in Kenya
Presents the report of a study on the organisations, operating a microfinance model, in which they provide management services to group-based loan funds. The groups - from Karatina in Nyeri District of Kenya Central Province - operate as Accumulating Savings and Credit Associations (ASCAs) otherwise known as ASCA Management Agencies (AMAs). Using interviews with group members, group officials, staff and management of three AMAs (Partnership for Productivity, the Women's Enterprise Development Institute and the Small Enterprise Development Institute), the study explored the:
- Operations of the AMAs and the groups they work with;
- ASCA management model, its performance, concerns and challenges.
The study also looks at the strength and weaknesses of the model. It states that the model's strength lies in the:
- Entrepreneurial spirit of the providers and their need to respond to client demand rather than donor satisfaction;
- Building on the popularity of informal group mechanisms such as ROSCAs and ASCAs;
- Its ability to offer a middle road between MFI provision and self-help group approaches that tend to assume the capacity for user-management.
The report concludes that since the model arose out of the withdrawal of donor support to a local NGO, donor intervention in the model is likely to undermine its positive attributes.
