Browse by Theme: Financial Inclusion

Despite the many benefits that CARE’s Village Savings and Loans schemes bring to poor communities, they are not a panacea. As groups mature they seek the security of a bank account, or wish for larger loans than the group can provide. This report looks at eight different models that CARE has explored to connect savings groups with formal financial services. Including Barclays, Vision Finance, Vodacom and Mwanga Community Bank, Orange and Equity Bank and Jubilee Insurance.

High uptake of savings, credit and insurance products have allayed concerns that products might prove too expensive for very poor communities. A total of 4,200 groups, or 105,000 individuals have been linked to the new products developed. Businesses too are benefitting, with increased customer bases and strong repayment rates. The report does recognise however, that overall transaction costs of linking savings groups to formal institutions remains high, albeit mobile banking offers opportunities to reduce this cost. The report also recommends that customer protection must be maintained. It outlines a set of ‘Linkage Principles’ that CARE has designed to help guard their interests.

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This report by Banking on Change partners Barclays, CARE International and Plan UK examines the barriers to financial inclusion in developing countries. It also looks at the potential boost to the global economy that large-scale financial inclusion represents, estimating that developing countries could receive a yearly savings boost of up to $145bn if the 2.5 billion adults worldwide who are ‘unbanked’ participate in savings-led microfinance. The report also calls for financial inclusion to be a key part of the post-2015 development agenda.

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To many people, charities and huge multi-national companies will always be strange bedfellows. As such, there can be a gossipy appetite to hear of a mighty culture clash when the two worlds come together in partnership – the sandal wearing NGO worker bewildered by their suited counterparts in the shadows of Canary Wharf.

The truth is much less riveting. Earlier this week, I sat alongside fellow panellists from Barclays, Plan, and DFID at an event entitled ‘Out of poverty and into profit’ in which we asked whether new development partnerships were a force for good?’

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This review focuses on the potential for the savings-led microfinance (MF) movement in sub-Saharan Africa to close an important gap in MF so that all poor people can access the financial products and services.

The three sections include (1) taking stock of where the savings-group (SG) movement fits within the larger MF sector and what different facilitating agencies (FAs) are doing in SG programming and where; (2) assessing program integration, in which SGs are implemented with other development programs, and linkage, in which SGs can opt into the formal financial sector; and (3) urging advocacy for changes in financial regulatory systems.

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CARE has pioneered an approach that meets the need for microfinance at the very bottom rung of the world's economic ladder. CARE Village Savings and Loan Associations (VSLAs) empower women to pool their savings – with no outside capital – and then make loans to each other to start small businesses or pay for important life expenses. Read more about our VSLA approach, along with other best practices at work in Africa, in CARE's most recent report: "Microfinance in Africa: Bringing Financial Services to Africa's Poor."

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CARE has pioneered an approach that meets the need for microfinance at the very bottom rung of the world's economic ladder. CARE Village Savings and Loan Associations (VSLAs) empower women to pool their savings – with no outside capital – and then make loans to each other to start small businesses or pay for important life expenses. Read more about our VSLA approach, along with other best practices at work in Africa, in CARE's most recent report: "Microfinance in Africa: Bringing Financial Services to Africa's Poor."

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