Institutional Models & Delivery Channels
A variety of institutional types and business models are needed in order to effectively meet the large demand for financial services. Non-governmental organization programs are seeking to become sustainable institutions, and state-owned institutions are adopting a more commercial approach to their operations. Commercial banks are entering the industry through direct offering of services or by forging strategic alliances with existing players. Credit unions are moving toward a shared branching network approach to more effectively serve their members. Community-based savings and loan groups are emerging as a potential model for reaching rural underserved populations. Moreover, technology innovations have also sparked new models where non-banking actors such as telecom companies and retail stores are acting as financial intermediaries.
USAID’s Microenterprise Development office aims to improve understanding of the viability, effectiveness, and constraints behind the different models being used to enable microfinance to reach a growing number of poor clients. The research focuses particularly on the operational structures and approaches that determine whether the models are successful in achieving scale and sustainability.