Financial services can enable the rural active poor to reduce their vulnerability, become more productive and increase their revenues. However, the provision of sustainable financial services in African rural areas presents a wide range of constraints.
Formal financial services still only reach about 10% of the rural population (IFAD Rural Poverty Report, 2010). That low performance translates the difficulties faced by financial service providers in reaching out to rural areas, which are remote, low population density, poorly equipped, subject to high seasonality in income. For practitioners, the challenge is to deal with high transaction costs, highly seasonal client revenues, and the difficulty of hiring and retaining skilled staff.
Thanks to technology improvements and product innovation, as well as improved infrastructure, rural finance providers can develop new strategies to remain relevant and efficient. Existing microfinance institutions (MFIs) have a key asset in developing these strategies, as they can build on solid, experienced client base. Scaling up, developing new products and using technologies are three of the key leverages that they can use.
PAMIGA - NGO created in 2006 to contribute to unlock the economic potential in rural Africa by supporting the development of rural finance - helps them in this process.
The Action aims at contributing to unlock the economic potential in rural Africa, by promoting the growth of existing financial intermediaries that serve rural areas by:
The Action is developed with 15 MFIs organized in a network and an information sharing platform. They are covering 10 Sub-Saharan countries, in Western, Central and Eastern regions, favouring cross-regional perspectives but also allowing for peer learning.
The final beneficiaries are 1 million rural households (300,000 additional households), small farmers, women and youth, seasonal migrants, all involved in rural economic activities.
As of December 31, 2014: