Dear colleagues
I am happy to read the great comments ....
Having worked for many years at the grass-root, especially on promoting easy access to finance, we have noticed several evidences in rural areas where many poor households, unable to afford to buy livestock (e.g, goat, sheep, etc), receive the mother goat from relatively wealthy households, take care of (feed, etc) the goat, and every new born need to be shared between the ''lender'' and the ''borrower'' (which often involve women household heads).... In terms of credit ''interest rate'' this could imply significant level of exploitation... So in many contexts like rural Africa, deepening access to finance should be one of the top priorities.
.For the very poor, livestock (especially sheep/goat and poultry) constitute a significant portion of their asset. Yet, they have little or no access to improved varieties, no access to appropriate extension, medical services, business support, etc. Especially in pastoral areas where infrastructure (road, electricity, etc) is very poor, there is low incentive for the ''last mile'' service provider (who are critical to directly serve the farmer) to work there. So even where the financial service providers are available, such livestock owners represent high risk, and are much less credit-worthy.
Significant portion of all efforts to enhance access to finance in rural areas focused on ''micro-credit'' (assuming that every poor is a potential ''entrepreneur'') and much less attention has been given to savings services, which are highly valued services especially for women as a means of exercising ''control'' of hard earned income. There are growing evidences that (especially in patriarchal communities) women who are not sure of being able to control their income through tailored saving services, would be reluctant to apply for loan services, even when such services are available nearby, and easily available....
As mentioned in other comments, ''holistic'' services are required, and service providers need to integrate their services to deliver impactful services to these households. Indeed, serving rural households living in scattered settlements is very costly. The good news is that the Grameen Bank style ''group lending'' (as well as the other Self Help Group models) managed to managed to organize borrowers every month, and every week for the purpose of saving and credit. This represent a convenient ''platform'' for other service providers (e.g extension service, etc) to forward their awareness creation, service provision etc, for a congregation of rural people -- without having to face the mobilization cost.... In most cases, however, this is not happening. The private sector remains less involved in many rural contexts.
My perspectives on these and related issues are also detailed in my recent interviews, Podcasts at the following events:
https://www.findevgateway.org/finequity/interview/2023/05/member-spotli…
https://www.farm-d.org/interview/farm-d-podcast-episode-3-the-use-of-ru…
https://app.swapcard.com/event/financial-inclusion-week-2023/planning/U…
Looking forward to learn more
Regards, Getaneh ([email protected])
Mr. Getaneh Gobezie