Cooperation or Competition? Institutional Development of Microfinance in Southern Africa.
This paper sets out the experience with mainstreaming microfinance looking at the private sector developments in Zimbabwe and the policy approaches in Tanzania. In section 2, a conceptual overview is followed by a textbook example of ‘linkage building’ from Mozambique and an illustration of ‘intermediate’ institutions in Ghana. In section 3, the focus is on the relationships between institutions providing financial services to micro and small enterprises. This shows that there can be a conflict of interest as far-reaching linkage development becomes untenable when MFIs and banks position themselves as potential competitors. Mainstreaming microfinance implies, of course, also a role for government. Section 4 looks at the efforts made by the Bank of Tanzania, Tanzania’s central bank, for establishing an appropriate regulatory framework, but finds that the lack of private sector (voluntary or profit-making) participation stymies these efforts. Section 5 concludes and proposes an agenda for debate on mainstreaming in Southern Africa.