Policy Guidelines for Donor Support to Member-owned Financial Institutions in Rural Sub-Saharan Africa

This study proposes policy guidelines for supporting member-owned MFIs, with a focus on promoting savings groups and financial cooperatives in Sub-Saharan Africa. The policy guidelines are inspired by six case studies provided by the Netherlands Platform for Microfinance (NPM) Rural Finance Working Group and based on good practices and extended experience of the authors. Policy guidelines on savings group and financial cooperatives include:

• Acknowledge that savings groups' promotion is an effective way to expand financial inclusion in rural areas and urban slums;
• Ensure that savings group promotion is handled by (microfinance) staff with expertise on savings groups program strategies;
• Promote a demand driven approach when supporting MFIs to link with savings groups, or when supporting savings groups promoting agencies to link with MFIs for savings and credit;
• Integrate support to financial cooperatives into the NPM members policies for microfinance sector support;
• Donors and investors staff needs expertise in financial cooperatives. Effective financial and capacity building support has a huge influence on the performance of financial cooperatives networks.