How Do Microfinance Member Based Organisations Successfully Serve Rural Areas?

prepared by A. Perilleux, A. Vanroose and F. Bédécarrat in collaboration with the e-MFP rural Outreach & innovation Action Group, October 2012.

Ccreated in 2008, the Rural outreach & Innovation (RoI) action Group of the european Microfinance Platform (e-MFP) gathers practitioners and experts involved in rural microfinance. after developing in 2009-2010 the topic of value chain finance, the group has worked on “member based organizations” (MBO). Microfinance institutions relying on self-management and members’ participation seem to have a strong competitive advantage to sustainably reach out to rural areas. echoing with the United Nations' International Year of Cooperatives in 2012, this analysis shows that financial MBOs, and cooperatives in particular, pioneered developing institutional and social models that are subject to expansion and replication in several parts of the world. our observations have been centered on the study of five MBOs from South America and West Africa, and completed with examples from other partner institutions. our focus has been drawn to governance mechanisms and strategic alliances.