Financial linkages in Mali: self-reliance and liquidity balancing versus liquidity supply and donor dependence

Microfinance is now reaching almost one-third of households in Mali, one of the poorest countries in the world. The government-owned BNDA plays a part in this by linking to networks that extend credit and savings services to poor clients. Two distinct networks – a federation of savings and credit co-operatives and a network of village banks – are examined and found to have adopted quite different organizational strategies. The co-operatives concentrate on building client savings, so that the bank linkage simply covers liquidity requirements; whereas the village banks rely on the bank linkage to fund credit expansion. The article questions whether donor funding for credit expansion via BNDA will continue to be needed in years to come. The experience of Mali also shows that agricultural lending is feasible; that government banks and donor funds can play an important incipient role; and that there may be a great potential for growth of outreach through savings mobilization as well as for sustainable linkages...