How can innovativeness
in savings and credit programmes be built up?

Diverse physical, geographic, socio-economic, cultural, political and other factors necessitate "tailor-made" rather than "one-size fits all" approaches. Some of the essential aspects that characterize innovative approaches.

  • Involvement of the civil society
    Availability of credit and finance for low-income families affects all people in a cross-sectorial manner and should be improved through institutional interfacing between government, the private sector, non-governmental organizations, community-based organizations, trade unions, the scientific-academic community, and others.

  • Institutional development.
    The development of a technical and legal/enforcement framework for implementing sound credit management practices is made possible through proper institutions for planning, developing, implementing, monitoring and evaluating activities. Capcity building is a fundamental component of institutional development.

  • Participatory approaches.
    Participtory approaches, when balanced with representation structures, are key elements in improving the decision-making process toward effective credit management. The issue is not to adopt either a bottom-up or top-down ethodology, but to keep both of these in mind depending on the scale if activities.

  • Finding entry points.
    All elements of the community resource base and interventions are interconnected. Effective credit management practices should find entry points that are acceptable to people and their representatives. To ensure complementarity, entry points should be identified using a holistic view.

  • Appropriate technology choices.
    Affordability, user-friendliness, a balance between internal and external options, ease of operations and maintenance, demand-driven approaches, and capacity building opportunities are some of the elements that should be considered when designing credit policies and programmes.

  • Results-oriented approaches.
    The ultimate criterion for evaluating savings and credit programmes is its impact on people's lives. The production of action plans, urban assessments, institutional improvement, and community mobilization exercises are means for achieving people-centered end results. Innovative practices can only be considered real practices when they actually generate an improvement in people's conditions.

Adopted from various writings of Shabbir Cheema, director of the Management Development and Governance Division of the UNDP.

Return to the Documents Section

Hari Srinivas -
Return to the Virtual Library on Microcredit