Financial Services in Remote Rural Areas: Findings from Seven Member-Owned Institutions - Synthesis

This paper synthesizes findings from studies on member-owned institutions (MOIs) that aim to understand different types of MOIs and MOI support structures that best serve remote rural populations, particularly the poor. The studies include literature review, case studies and thematic papers on key drivers of MOI outreach, namely, internal governance, federations and linkages to external agents, and regulation and supervision. This paper focuses on MOIs' remote rural outreach, value addition they deliver and ways to strengthen their outreach. Findings indicate that:

• Member ownership can be a strong positive force in all types of small MOIs;
• Small MOIs seem uniquely positioned to serve remote rural areas that are poor;
• Linkages and networking pose challenging trade-offs in small MOIs;
• Larger MOIs experience weaker oversight by members, and governance by elected representatives often diverges from interests of the whole;
• Networks seem stronger if they are not supported by donor funds, government support or external capital;
• Governance is a challenge for MOIs that surpass the size for effective peer monitoring;
• Provision of simple, appropriate supervision, systems and technical support is crucial to strengthening MOIs' rural remote outreach.