These institutions and their clients existed outside the boundaries of the regulated financial system and have been operating “under the radar” for many years. Some of these institutions include NGO MFIs, Community or village MFIs, semi-Government MFIs, Cooperative Savings Societies and Credit Unions. Most of these institutions operate informally or semi-formally. They have client bases that have generally stagnated over the years.
Sustainability, scale and outreach are critical issues for some. Funding for their operations and survival is mostly dependant on Government, the private sector and donor grants, or sometimes sadly from the intermediation of members’ funds! To ensure consolidation and development in this area it is necessary to bring these struggling, unregulated institutions under the central bank’s oversight role.