Beyond Microcredit: The Role of Savings Banks in Microfinance- Experiences from Latin America, Africa and Asia

This issue of Perspectives examines the role of World Savings Banks Institute (WSBI) members in improving access to finance and enhancing microfinance activities in the Asia/Pacific, African, and Latin American regions. Savings banks play a leading role in efforts towards financial inclusion. WSBI members are ideally equipped to lead microfinance providers in their home countries because they have:

• Widespread branch networks and nationwide coverage that makes them easily accessible;
• Significant outreach among the poorest households in their countries;
• Relatively low requirements for accessing their services;
• Enough branch infrastructure and institutional knowledge to achieve economies of scale and provide affordable financial products;
• Ability to provide a whole range of financial services in a sustainable manner.

The paper summarizes WSBI members' microfinance approach by region. It states that in order to facilitate expansion of access to financial services, microfinance frameworks should:

• Be tailored to national circumstances;
• Gear regulations towards activities rather than institutions;
• Encourage a diversity of players in a market-driven environment;
• Make regulation proportionate to expected benefits;
• Remove restrictions to microfinance activities and associated prudential requirements;
• Encourage linkages between banks, MFIs and other retail outlets.