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The Link Between a Microfinance Institution and the Modern Banking Sector

This short article begins by noting that in developing countries, and particularly in rural areas, financial services are usually offered by informal or semi-formal entities. At the same time, formal financial institutions are trying to develop products specifically adapted to the needs of marginalised populations. It suggests that interlinking both institutions combines downgrading and upgrading. The article builds on this by trying to answer the questions a to whether it is possible to envisage converging strategies between formal and the informal sectors that would meet the needs of these populations, using as a reference the experiences of the Community Growth Mutual Funds MC2 in Cameroon.

The article begins by discussing the advantages and disadvantages of the different financial actors and then briefly examines strategies to increase the scope of financial services. It then describes the model adopted by MC2, the Community Growth Mutual Funds, created to integrate rural areas into the development process, before presenting the different links it makes.