The objective of the SKS microfinance model is profit maximization, thus all efforts are made to put the

interest rate above 35%

e SKS model do not accept
deposit of any kind on their own.
Over pressure on loans beneficiaries push customers to commit suicides as the loans are inflexible and
ill adapted to the cycle of activities of the beneficiaries. In addition because of huge mega structure
being set up by this model operational cost turn to be very high and this is transferred to the poor in the
form of higher interest rate.
The SKS starts it activities in urban areas before venturing into rural areas.

institutions.

microfinance institution gives out the money

through loan officers to beneficiaries at a very

loan
agency (the local headquarters of
FINCA or its affiliate) for onlending to the individual members
of the village bank.

organizational
focus is primarily on lending, but
every group member must save a
certain amount.

In otherwords, building from the bottom

At least 4

3-5

Staff size

Village Bank

through entrepreneurship.

official lending sources.

Emphasis is on credits

them to improve their welfare

most situations are excluded from

implementing

credits to rural communities for

the

economically active poor who in

from

inaugurated, it receives its first

FINCA objective is to grant

The

As soon as the village bank is

The Grameen bank assists the

Microcredit Institution

Objectives

Program type

structure.

highly

disciplined

functions on the principle of one man, one vote.

five,

of

the

beneficiary

Credit institution

increased outreach.

within the shortest time possible through

is to make maximum profit for the investors

The objective of the SKS-Microfinance model

objective.

credit and investors profit maximization

high interest rate. The focus is primarily on

Instead,

and investors provide the loans to SKS model

disbursing loans to villages. Scheduled banks

recruits and train loan officers in charge of

and investors, a mega structure is set up, that

credit company, with resources from lenders

These are investors driven centrally managed

and religious habits of the Community. It

60 members, usually all women.

FINCA works with groups of 30-

microfinance institution, groups

dedicated

members incorporating socio cultural, traditions,

managed,

Centrally

SKS- Microcredit Model

Is a micro-bank owned and managed by the

The first objective of the MC2 micro

bank is economic and financial
sustainability from the perspective of the
micro bank, the individuals and group
members.
The second objective of MC2 is the
social dimension. This involves targeting
the poor, micro and small scale activities
and consequently restoring dignity to
target beneficiaries to see the importance
of being masters of their destiny.
Emphasis is on savings and credits
Rural Micro development bank

Summary

FINCA-Model

Grameen-Model

MC2-Model

Av.Loan Size

Funding type

Criteria

$150

Equity shares subscribed by members

Savings from local population
Savings from other men and women
from the area living in other places
Loans from refinancing Programs from
the link bank
Grants for capacity building from the
local NGO ADAF

Registration FCFA 2500

Shares >=10 @1000 =10000
Savings >= FCFA1500 quarterly

emphasis

and

group

mobilization

funds

from

Less than $100

generated funds

Savings and internally

donor agencies.

External

-Compulsory weekly savings

training

meeting

and

social

$160

Credit from MFIs

donor agencies

Be able and willing to pay the fees

Be a member of an SHG,

Are not deposits taking institutions.

Members contribution

$75

mobilization
possible only when there is an MFI involved.

Group

Door to door loan collection services,

to support the loan request

Economic active poor with tangible collateral

Funds and credits obtained from

Peer pressure

amount.

undergo

-Must

have

20% cash guarantee of loan

weekly savings

Peer pressure and compulsory

meetings

seminars

Social

on

to

-Must be member in a group

group

collection Peer pressure

Depends on the community potentials

Eligibility

door to door loan reimbursement

must be able to save at least FCFA1500 quarterly.

Method

weekly savings,

Compulsory

seminars group meetings

mobilization

savings

Micro insurance

Social

Little

Credits

preference

Micro insurance

Credits

Savings

Savings is key to wealth creation. Flexible but

Financial training and workshops

Micro insurance

-Transfers
-Loans

-Flash cash

Savings

services

Non financial

services

Savings accounts
accounts
Term Deposits
Moneygram
Others

women

activity

Financial

with

involved in an economic

Villagers of both sexes

the poor

women

Clients

rural

Poor

The entire community, the under priviledge and

Target