Rural Finance Project

Microfinance offers a range of financial services to the poorest members of local society, who tend to be afraid of debt and who have little or no collateral. In rural areas of the Gambia microfinance is handled mainly by institutions operating in the semi-formal market. They include:

• the village savings and credit associations (VISACAs) initiated by IFAD in the country in the late 1980s
• the network of mutualistic credit unions belonging to the National Association of Cooperative Credit Unions of the Gambia
• the Gambia Women’s Finance Association (GWFA), based on the group-lending approach
• the Gambia Microfinance Savings Company Limited, a private limited liability financial company

Directly supervised by IFAD, the project will provide a broad range of carefully targeted support to strengthen and consolidate existing microfinance institutions to enable them to deliver financial services to economically active rural poor people. Activities will include training and technical assistance for developing new financial products and for improving management of services. The project will strengthen in-country technical service providers to improve the advisory and business development services they offer to rural clients. The project will also help establish an apex body to support village savings and credit associations and provide funds for training at all levels. It will enable local communities to access social and economic infrastructure by linking up with projects offering matching grants, such as the World Bank’s Community-Driven Development Project.

The project includes an innovative approach, mobilizing traditional village groups to reach the target groups of poor men, women and youths as clients for microfinance.

Upon completion of the six-year project, it is anticipated that 180 rural branches of microfinance institutions and almost 3,000 GWFA groups will be delivering financial services such as savings, loans and insurance to about 180,000 rural clients, more than half of them women. The project will assist existing microfinance institutions to expand and complete geographical coverage of rural areas.

Source: IFAD