Knowledge sharing is a critical component of UNCDF’s MicroLead program, which aims to expand access to and use of financial services by rural low-income populations, particularly women.

In Tanzania, MicroLead supports CARE Tanzania and Mwanga Community Bank (MCBL) in their work to provide formal financial services to existing rural informal savings groups. In April, CARE Tanzania hosted a regional, knowledge-sharing workshop on savings group linkages for financial institutions on their work in the Kilimanjaro region. The workshop goals were to:

1. Assess and understand the performance of rural-focused group savings and credit products;
2. Examine the potential of linking informal savings groups using the franchisee model and to discuss what works and what doesn’t;
3. Discuss the barriers to linking with savings groups in the region and search for remedial measures and solutions; and
4. To explore other opportunities in Kilimanjaro’s growing financial services market and review existing activities by the government, other community banks, and community savings organizations.

Among the lessons learned, when linking groups:

1. Working with local partners helps speed up the linkage process.
2. Financial education for clients can increase portfolio quality.
3. Innovation, including digital financial services, plays an important role in linkages between informal savings groups and formal financial institutions.
4. Financial institutions must carefully gauge their fees, as fees that clients perceive as too high may hinder linkage process with informal savings groups.
5. Rural communities require targeted products with simplified procedures.

The number of group customers at MCBL has increased from 11,000 at program start in 2011 to 58,000 clients in December 2015, which represents 27% of MCB customers. MCB is the leader in Tanzania when it comes to number of groups linked. It is also the only financial service provider offering credit to groups in addition to a safe place to save.

MicroLead’s Ivana Damjanov says, “There’s a need for these regional workshops, and there’s room for everyone. And in this case, it was particularly helpful that a representative from the Ministry of Finance and from the Bank of Tanzania attended.”

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About MicroLead

MicroLead is a UNCDF-managed global initiative supporting the development and roll-out of deposit services by regulated FSPs, seeking to respond to the rural vacuum of services. With the generous support of the Bill & Melinda Gates Foundation, The MasterCard Foundation and the LIFT Fund in Myanmar, MicroLead works with a variety of FSPs and technical service providers to reach rural markets with demand-driven, responsibly priced products offered via alternative delivery channels such as rural agents, mobile phones, roving agents and point of sales devices. This is combined with financial education, so customers not only have access but can effectively use quality services.