Holding the Door Open : Facilitating Access to Microcredit in the Benin Social Fund
During preparation of the Benin Social Fund Project, all levels of society indicated that lack of access to credit was a major problem for poor people. At the same time, there was reluctance to put in a micro-credit component, as an assessment of t...
| Main Authors: | , |
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| Format: | Brief |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2002/03/6267100/holding-door-open-facilitating-access-microcredit-benin-social-fund http://hdl.handle.net/10986/11830 |
| Summary: | During preparation of the Benin Social
Fund Project, all levels of society indicated that lack of
access to credit was a major problem for poor people. At the
same time, there was reluctance to put in a micro-credit
component, as an assessment of this type of component in
social funds had yielded mixed results. The Bank was already
supporting the Second Rural Credit Project, providing
technical support to a national association of cooperative
savings and credit societies to increase the availability of
credit. Nonetheless, the Government, having identified
micro-credit as a priority, was keen to have micro-credit
activities. To balance the somewhat conflicting points of
view, the project team decided to develop financial
intermediation services for low-income groups, without
providing the actual credit. To take into account the
heterogeneity of institutions involved in microfinance at
the time, the unequal distribution of financial services in
the country (especially urban/rural), and the
characteristics of different types of clients, the
microfinance component was divided into three
sub-components, two dealing with formal financial systems,
the other with informal ones. The project has been able to
fill a gap between poor households and formal credit
sources. Critical for the success were the already-existing
formal credit organizations that offered financial services
relevant to the needs of poor groups. While expertise on
microfinance is hard to find, results suggest that
intermediation only works where credit is actually
available, in a form usable by the target population.
Notably, targets should be adjusted to focus on what is
important to the beneficiaries. |
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