In recent years, stakeholders have increasingly acknowledged that formal financial institutions are not always able to address the financial service needs of the very poor, particularly those living in remote areas. Small transaction sizes, sparse populations, and poor infrastructure limit the ability of commercial banks and others to reach rural areas where many of the world's poorest and most marginalized populations live. This paper explores the experience in Tajikistan, where a number of different types of financial service providers and civil society organizations play an important role in meeting a variety of financial service needs and market segments. It proposes that in order to increase financial inclusion, community-based providers and collective organizations are necessary to overcome high costs and cumbersome procedures required by regulated providers and thereby contribute to the development of the financial system.
I first met Alan Gibson on 24 September 2007 in Chiang Mai, Thailand at a seminar on developing service markets and value chains. Alan sat beside me in the morning plenary and introduced himself. Later that day, he invited me to join a group heading out for dinner. I was new to the field of service markets and value chains – I had come from the microfinance world and was looking for a change. I cannot imagine a better person than Alan to introduce me to the new world of market development; I was fascinated by what he had to say. We ended up talking until the wee hours that night, not noticing as everyone around us made their way back to the hotel.