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CTA. 2002. Growing pains. Spore 98. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/46489
Internet URL: http://spore.cta.int/images/stories/pdf/old/spore98.pdf
How can the tool of microfinance organise itself to expand its outreach across the community, in urban and rural areas alike? How can the strong points of informal credit programmes small size, swift action, low-cost, proximity to borrowers be...
How can the tool of microfinance organise itself to expand its outreach across the community, in urban and rural areas alike? How can the strong points of informal credit programmes small size, swift action, low-cost, proximity to borrowers be replicated to cover many more people, but without adding on high costs and fuelling fears of excessive risk? These factors, after all, are the reasons why large banks never successfully adopted microfinance programmes. In West Africa, strong in its traditions of informal tontine funds, one-third of microcredit funds are invested in agricultural production, and 40% in trade which includes much agricultural produce. However, rural incomes are being hit hard by the process of liberalisation. How can micro-finance be used to greater effect in small family farming enterprises, without becoming the equivalent of income support? These were the issues examined in an international conference on the situation of micro-finance co-organised in Dakar, Senegal, in late January 2002 by Cirad, Enda-Graf, Cerise, CTA, IFAD, French cooperation and AFRACA. The 100 participating practitioners and policy-makers came from all points of the continent. Among their major concerns: the issue of so-called fungibility of loans, which melt into household incomes and are used for more purposes than intended before being repaid, and the rising importance of creating loan capital through savings and protecting it through insurance programmes. The clouds on their horizon the eternal problem of combined excessive size, high costs and inadequate rates of interest were not blown away. [caption to illustration] All very neighbourly, but keep that interest rate up