A financial intermediary needs funds to operate. These may be obtained from the equity of the institution, by borrowing from another bank, the central bank, the government or a donor agency, or they could be funds from deposits lodged with the bank. Equity is a liability of the institution, owed to shareholders who normally expect a return on their investment. It is common for governments and donor agencies to contribute some or all of the equity of a financial institution which is to provide services in an area not otherwise commercially attractive.

Financial institutions can boost their funds by borrowing from the central or commercial banks but have to be able to meet their obligations regarding interest payments. Two features of operating in rural as opposed to urban areas impact on sourcing funds. Firstly, patterns of demand for funds tend to be governed by the seasons, so that all farming clients who wish to borrow to cover the expenses of growing crops in the season will be wanting funds at the same time. Secondly, the funds may be required for a period of several months, even for a year or more.