Rural Finance Learning Centre 
traininglibrarywhat's on?AgriBank-Statcontacts
 
  Login
  Topics
Archived conference materials
Background and general reference
Client advice
Policy-making
Agricultural finance
Banking for the poor
Collateral
Country studies
Donor intervention
Financial cooperatives
Guarantee schemes
Impact analysis
Interest rates
Livelihood promotion
Prudential regulation
Public sector banks
Risk and insurance
Rural outreach
Value chains
Service provision
  Topic Overview
   id: 5294
   Visits: 17794
   Added: 03 December 2003
   Updated: 03 April 2007
  KO Overview
   id:57023
   Visits: 106
   Added: 30 June 2008
   Updated: 30 June 2008
 
Banking for the poor    
        
The myth that poor households in developing countries are not creditworthy or able to save has been firmly put to rest in recent years. Poor households, it has been found, place special value on reliable and continued access to different types of financial services, available at reasonable cost and catering to their specific needs. Credit and savings facilities can help poor rural households manage, and often augment, their other wise meagre resources, thus enabling them to acquire adequate food and other basic necessities for their families, as well as invest in enterprises to sustain their livelihoods.

Since this discovery, microfinance, or financial services for the poor, has been hailed as the most important tool in poverty alleviation. However, not everyone agrees. According to Nimal Fernando, “There are three camps of thought on the issue of financial services for the poorest. The first camp rejects the hypothesis that the poorest can be reached with financial services on a sustainable basis. The second camp advocates that the poorest of the poor can be reached not only on a sustainable basis but also on a large scale. The third camp recognizes that the potential for reaching the poorest on a sustainable and a large-scale basis is limited but that the search for innovative approaches to expand the outreach to the poorest must be continued."

Policy-makers have an important role in facilitating this debate and also in creating the legal and economic environment within which suppliers of micro financial services can operate successfully.

  
DocumentsEditor's NotesWebsite 
see list  
TitleSustainability Banking in Africa
Author/ EditorUNEPFI
Content Language(s)English
Type of Document Report
Abstract / DescriptionThe key aims of this report are to define what sustainability banking means in the African context, to analyze the current role of the finance sector in the promotion of sustainability in Africa and in so doing provide examples that are potentially replicable elsewhere across the continent.

The drivers, challenges and opportunities of sustainability banking in Africa are highlighted, along with a series of current product, process and market innovations that demonstrate the potential of sustainability practice within the African finance sector.

Evidence from the Report points to the emergence of a dynamic business case for sustainability banking in sub-Saharan Africa –derived from new corporate governance standards, better regulatory frameworks, and increased financial sector capacity to implement sustainability practices and to enter or create new markets. Although there is an impressive range of financial innovations supporting sustainability in Africa, there is clearly the need for further innovation regarding efforts to understand and address African specific sustainability problems. The Report deduces that greater access to financial services and SME support can provide solutions for these problems, especially as financial “exclusion” is seen as an acute issue of concern in Africa, not simply as a matter of inconvenience, but potentially as a denial of a basic right.

Keywords SUSTAINABILITY BANKING; FINANCE; BANKING
Country AFRICA
Date of Publication/Issue2005
Download
PublisherUNEPFI
Number of Pages12 pp
  
1710 Knowledge Objects - 3247 Members - 137 Topics
Contact RFLC Editor
freeMem:302,701,728 totMem:524,353,536 reqNum:15560 openSessions:1 generationTime:2009/01/09 23:48:53