A Comparative Analysis of Member-Based Microfinance Institutions in East and West Africa

The paper presents a comparative analysis of member-based microfinance institutions (MFIs) i.e. savings and credit cooperatives or mutualist institutions (COOPECs/SACCOs), self-managed village savings and credit associations (CVECAs), and financial service associations (FSAs) in two East African countries (Kenya and Tanzania) and three West African countries (Burkina Faso and Mali). The authors rely on desk reviews, a field survey and focus group discussions to comparatively analyze the history of the movements; member profiles, products and services; the financial techniques used by the institutions; the structure and governance; the social, financial and institutional viability; and trends. Findings reveal that there are many similarities between the West African COOPECs and the East African SACCOs in their origins, locations, client profile, the products offered, reach, governance and financial viability at the branch level. Despites these similarities, important differences exist which are due in large part to recent developments in West Africa. The paper also presents the challenges and prospects for member-based microfinance institutions in East and West Africa. It makes recommendations in the area of exchanges of experience and cooperation; technical assistance; development of the village/community-based MFIs in East Africa and the role of professional microfinance associations in improving the regulatory framework.