The role of informal microfinance institutions in saving

Cooperatives traditionally have a strong presence in the provision of financial services through
credit unions and microfinance entities which encourage voluntary savings and provide
affordable loans and insurance. In many developing countries, credit unions have become the
largest source of small savings account and loan services, especially for poor people and the
working poor in rural areas, where traditional banks or insurance services are beyond the
reach of many.
Credit unions currently serve an estimated 120 million members in 87 counties around the
world and help members increase their incomes, build wealth and security and provide homes
for their families. To enable the very poor who lack resources to become individual credit
union members, credit union associations. Members initially join as a group and eventually
become individual members with their own savings accounts and loans.
The growth of micro credit and microfinance services offered by cooperatives has had
significant success in empowering poor people, especially women, to fully realize their
productive potential. Access to credit, in particular credit policies and programmes that have
been adapted to rural environments and for agriculture, have been at the centre of efforts to
empower rural women. The ability of rural women to access such financial services has helped
to increase agricultural productivity and promote food security. Moreover, such access by rural
women to financial services helps to give them voice and this is increasingly an important
factor in implementing rural policies and defending the interest of all farmers, both women
and men. As a result, barriers to rural women’s participation and representation in agricultural
organizations are increasingly being eliminated.
1.1.8: THE FOLLOWING ARE THE DEVELOPMENT OF SACCOs IN THE WORLD.
The first generation of pioneers of modern cooperation emerged in certain working- class
environments in European Industrial cities of the 19 th Century. In 1840s,the first industrialized
countries (Great Britain and France),the pioneer’s of co-operative invented models of the
consumer cooperative and the labor cooperative to defend and promote the interests of
working –class families in the face of the social disasters engendered by the phenomena of
industrial revolution.
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