The role of informal microfinance institutions in saving

Also the significance of this study lies in its revelation that while the liberation of the financial
sector has increased the number of banks in the country, most of these are concentrated in
urban areas, and geared to serve mainly corporate/big borrowers; leaving the rural population
out of reach of financial services.
SACCOs have been significantly contributing to employment, to the national economy,
poverty eradication among SACCO’s members, creation of wealth and new financial services
to the customers. For a number of years, savings and credit cooperatives societies have been
at the heart of the development of communities by striving to make available, financial
resources based on the community’s own resources (i.e. Member savings) and the safe
recycling of this money (member loans) into the community’s activities thereby make a
significant contribution to the development of the environment and the well-being of the
population in general.
An impact study conducted by DID (Development International Desjardins – Canada) in
Burkina Faso has further more shown that most of the respondents, Prior to the arrival of the
SACCOs in the community, had no access to a formal savings and credit system. The
establishment of the SACCOs is therefore not only an alternative, but also a new possibility to
have access to quality and control of financial services.
Since they operate under a mutuality form, financial cooperatives are strongly rooted in the
community and are a significant level for the development of collective assets and local
powers.
SACCOs have an important role to play as small economic agents by financing micro
enterprises and small businesses at the heart of economic and commercial activities of their
community.
In order to protect the assets represented by financial cooperatives and reach even more
persons by adequately meeting their needs, SACCOs must, however be sound, profitable and
capable of managing their own development.
89