The continuing failure of MFIs to reach remote and rural areas, especially in Africa, has renewed interest in finding alternative models of service delivery that can achieve this goal. The Village Saving and Loan Association model promoted by CARE is an accumulating savings and credit association that is timebound, with a periodic action audit at which all the funds are paid out. The approach was implemented in Zanzibar in 2001–2002 and CARE then left the area. This article reports findings from a follow-up study to assess the performance of the groups. The number of groups had grown and overall outreach had expanded to some 4,500 members. The financial performance of the groups was strong with returns on savings of 53 per cent. The context for this strong performance is a relatively well-off and well-educated population that is likely to have favoured strong group governance.
Microfinance, the provision of financial services to the poor, has emerged as one of the promising pathways out of poverty. But how can the people living far from the pathway access microfinance? This case study addresses this question by looking at how an innovative microfinance bank in Africa, Opportunity International Bank of Malawi (OIBM) is exploring alternative delivery approaches and tailored products that appeal to the rural population who have been excluded by the high cost access to the mainstream financial sector. It is experimenting with mobile banking services using armoured trucks equipped with smart card technology, value chain interventions, weather-indexed insurance and savings accounts. Initial evidence indicates that these have the potential to reduce risk, cost and improve access to financial services for those whom microfinance has found difficult to reach. However, the analysis suggests there are inherent challenges that need to be addressed if these successes are to continue.