Building Networks of Service-Providing Institutions: Sourcebook

This paper is the product of a collaborative effort between the Action Research program of the World Bank Group and some leading microfinance institutions in Africa. Under this program, the World Bank Group has assisted national institutions to form networks for strengthening their capacity to deliver financial services to the poor.

The paper presents the benefits of networking. These include:

• Interactive learning from each other;
• Facilitated acquisition and dissemination of information;
• Expanded pool of technical, human, and financial resources;
• Problem-solving through enhancement of innovation;
• Enhanced formation of operating linkages;
• Effective advocacy with regard to both government and donors.

However, the authors state that there are costs associated with networking too:

• Training and the cost of running the network office;
• Expenditures on meetings and workshops, costs of travel by members;
• Cost of communications and publications;
• Opportunity costs of staff time while they participate in network activities.

Through an analysis of administered questionnaire, the paper concludes that:

• Benefits arising out of networks are sustainable;
• Returns outweigh the apparently high short-term costs;
• Networks provide a means of producing a bigger pie for the entire industry;
• Networks allow each member institution to gain a larger share, rather than one where a single institution carves a large share of an existing small pie.