Supporting Community-Managed Loan Funds
Donors support many community-managed loan funds (CMLFs) often designed as components of larger projects. Unlike microfinance institutions (MFIs) with professional staff, CMLFs rely on group members themselves to manage the funds. CMLFs can be attractive alternatives for areas and populations that are too expensive for formal MFIs to reach. Savings-based models have experienced promising results, but funding CMLFs with external capital at the outset almost always leads to poor repayment rates and fund failure.
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| Main Author: | |
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| Language: | English |
| Published: |
2006-05
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| Subjects: | ACCESS TO LOANS, BANKS, COMMERCIAL BANK, COMMUNITY DEVELOPMENT, CREDIT ASSOCIATIONS, DELINQUENCY, EMPOWERMENT, EXTERNAL CAPITAL, EXTERNAL FUNDING, FINANCIAL INSTITUTION, FINANCIAL SECTOR, FUTURE LOANS, INTEREST RATES, LEVERAGE, LITERACY, LOAN, LOAN DISBURSEMENT, LOAN FUND, LOAN FUNDS, LOAN REPAYMENT, MFI, MFIS, MICROFINANCE, MICROFINANCE INSTITUTIONS, MONITORING SYSTEMS, OUTREACH, REPAYMENT, REPAYMENT RATES, REPAYMENT SCHEDULES, REPAYMENTS, RETURN, REVOLVING FUNDS, SAVINGS, TECHNICAL SUPPORT, TRANSACTION, VILLAGE, VOLUNTARY DEPOSITS, |
| Online Access: | http://documents.worldbank.org/curated/en/2006/05/9638727/supporting-community-managed-loan-funds https://hdl.handle.net/10986/9614 |
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| Summary: | Donors support many community-managed
loan funds (CMLFs) often designed as components of larger
projects. Unlike microfinance institutions (MFIs) with
professional staff, CMLFs rely on group members themselves
to manage the funds. CMLFs can be attractive alternatives
for areas and populations that are too expensive for formal
MFIs to reach. Savings-based models have experienced
promising results, but funding CMLFs with external capital
at the outset almost always leads to poor repayment rates
and fund failure. |
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