Literature Review

Member-owned institutions (MOIs) can achieve impressive outreach. They often serve more rural markets than any other type of financial institution. They typically recover their costs. Through growth or replication, they can serve large numbers of clients. And though often limited in scope, their services may respond to client demand and cost clients less than their alternatives. Frequently, MOIs are plagued by fraud and mismanagement. Their scale and continued existence is limited by their governance.

This study examines what outreach can be expected of different types of MOIs and key controllable factors that affect it. We want to understand how MOIs might be supported to provide ongoing affordable financial services to meet the demand of large numbers of low-income remote-rural members. Therefore, we consider three drivers of outreach:

  • Internal governance
  • Participation in federations or networks and linkages to private suppliers, NGOs and government
  • Regulation and supervision


Our analysis is based on a review of the literature on MOIs and focuses on MOIs that provide primarily credit and savings services in Africa, Asia and Latin America. We are particularly interested in MOIs that serve markets unserved by other financial institutions.

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Financial Services in Remote Rural Areas: Findings from seven member-owned institutions: A literature review

Authors: Madeline Hirschland, with Renée Chao-Béroff, Malcolm Harper and Nanci Lee.

English:
Cover [ 2.42 MB ]     Literature Review [ 694 KB ]


This study involved several facets and spanned three years. A literature review was conducted on Member-Owned Financial Institutions (MOIs) that provided primarily credit and savings services in Africa, Asia and Latin America, particularly in markets "unserved" by other financial institutions. Based on the literature review and identified gaps, a framework for the study was organized with two levels of analysis.

Key Findings from the Literature Review

The review found that MOIs can achieve impressive outreach. They often serve more rural markets than any other type of financial institution and typically recover their costs. Through growth or replication, they can serve large numbers of clients. And, though often limited in scope, their services may respond to client demand and cost clients less than their alternatives.

Based on the literature review, three key drivers of outreach were identified for further analysis:

  • internal governance;
  • networking and linkages;
  • regulation and supervision