Promoting Inclusive Markets and Financial Systems
Cooperatives Learning to Move Down and Out: the Case of the Réseau des Caisses Populaires du Burkina (RCPB) Adding Village Banking Combined with Adult Education to Their Traditional Lines of Service (Promising Practices Series)
Building microfinance institutions from scratch became the norm in the 1990s for fostering outreach and down reach of financial services to the poor. This MFI building movement was in reaction to lack of interest among traditional financial institutions in the kinds of service delivery innovations needed to engage the truly poor, especially very poor women in rural areas. While motivated by stronger social commitment and greater innovative spirit, the institution-building movement is running into the same cost issues as the traditional institutions have faced. Ironically, many of the new MFIs are reacting in the same self-limiting ways that reduce commitment and innovation to engage the truly poor, especially very poor women in rural areas. Even more ironic, one way to break through this cost-structural impasse is to take advantage of the traditional financial service infrastructure already located nearby where the very poor live. This case study examines the “promising approach” of grafting onto a financial cooperative’s (or network of cooperatives’) existing service portfolios some of the same service delivery innovations around which many of the MFIs have been built, but at lower marginal cost for reaching out and down. The “Crédit Epargne avec Education” program of RCPB in Burkina Faso is the longest lasting (since 1993), largest scale (66,706 all-women members of 3,416 caisses villageoises in December 2006) case of this kind of innovation, for which there exists relevant historical and recent data on growth in outreach, poverty level of clients reached, impact on clients and communities, and institutional performance and commitment.