Rural Finance (Policy Series 1)

This paper explores issues and experiences in rural finance. It focuses on its potential to alleviate poverty in sub-Saharan Africa (SSA).

It states that:

• Women are poorly served by existing services in the rural financial markets;
• The poor are often more concerned with livelihood protection and maintaining minimal standards of living;
• Fragile and high-risk livelihoods require insurance or insurance substitutes, and for this reason the poor may prefer savings over investment.

The paper concludes that:

• Improvements to financial services, both formal and informal, must be tailored to the needs of the poor;
• Banks should help mobilize the savings of the poor by removing restrictions on withdrawals from savings accounts, and simplifying lending operations and procedures;
• Credit access programs should aim to increase women's access to credit within the formal sector;
• Attention must be given to the limitations of the poor in making savings and using credit in productive ways.