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General Approach to Regulating
Based on the Comparative Database on Microfinance Regulation by the IRIS Center of the University of Maryland
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The PARMEC Law was passed by the Central Bank of West African States (BCEAO) and creates an institutional structure for mutual societies. National Finance Ministries will directly implement the law and provide details on licensing and regulation. Other MFI structures may exist in these various countries; this table discusses only the PARMEC law as passed by the BCEAO. | ||
| Credit Unions (Mutual and cooperative savings and credit institutions) | Non-cooperative institutions (all other MFIs) | |
| Definition or description of institution | Mutual and cooperative savings and credit institutions and their unions, federations, and confederations. The institution cannot have a profit-making goal, must be founded on the principles of union, solidarity, and mutual help, and must have savings and credit functions as its principal goal. | Non mutual or cooperative savings and credit institutions. |
| Guidelines & restrictions on financial services |
Permitted: savings and credit, fund transfers.
Prohibited: checking. Other activities are permitted with Ministry of Finance approval. |
Unknown |
» More country data from the Microfinance Information Exchange Market
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CVECA: Providing a Range of Demand-Led Savings Products
Summarized from: "The Microfinance Experience with Savings Mobilization", 2000.
By: Jacqueline Bass and Katrina Henderson
Established in 1986, Caisses Villageoises d'Epargne et de Credit Autogerees (CVECA) began by providing financial services to villagers in Mali's Pays Dogon region. The bank grew out of banking reform measures begun by the Banque National de Developpement (BNDA) to fund agricultural activities in rural areas. In designing CVECA, the emphasis was on ensuring the rural agricultural sector's development and fostering the participation of villagers who would be affected.
Although CVECA is a credit-led institution, the bank saw the demand for savings facilities. Following its management structure, it depended heavily on the input and ideas of villagers, conducting detailed surveys to better understand the savings needs and capacity of both groups and individuals. Public reviews were then organized during village meetings to assess the results. Final decisions were reached collectively. Then CVECA began to develop the following types of savings products:- Sight deposits: For this account, CVECA does not require a minimum or maximum deposit. The account does not earn interest, nor does the villager pay any administration fees. Clients can make withdrawals without notice any time the bank is open.
- Term deposits: This is a contractual account with a fixed term and withdrawal date. The term can be from three months to three years but under no circumstances can withdrawals be made prematurely. Term deposits earn a high interest rate--usually around 20 percent--that the village sets. Interest is paid at the term's end, when the deposit is withdrawn.
- Savings plans: With this account, savers develop a savings plan and commit to pay a fixed amount regularly for 24 to 48 weeks. The interest rate is typically around 10 percent per year.
CVECA
The CVECAs are autonomous village banks in rural
- examine how the CVECAs recover costs in a region with a poor, sparse, and illiterate population and high travel;
- describe the internal controls by which the CVECAs safeguard deposits; and
- describe the conservative and simple means by which the CVECAs manage liquidity.
This case study can be found in Savings Operations for the Poor: An Operational Guide, edited by Madeline Hirschland, forthcoming from Kumarian Press (
Kondo Jigimais, NyEsigisois, MISELIis, and CANEFis credit and savings operations
The role and impact of savings mobilization in
By Gilles GOLDSTEIN and Issa BARRO
This study was undertaken by the United Nations Development Programme and the British Department for Development Co-operation to collaborate in the promotion of savings services for poor people in Africa through "MicroSave -
See also:
Village Banks in Mali: A Successful Project of Self-Help Promotion, 2001, Adler, M.
Savings Products and Services in the Informal Sector and Microfinance Institutions in West Africa: The Case of Mali and Benin, 2001, Ouedraogo, A. & Kalala, J. P.
RBP: Savings in the Context of Microfinance - Lessons Learned from Six Deposit-Taking Institutions Deposits, 1998, Sylvia Wisniwski
Where are they now?, 2006, Ruth Goodwin-Groen
Banking on the Poor, 2005, J. Ashe