Membership-Based CFIs

image053CFIs are (a) multipurpose cooperative associations (e. g., producers, services, marketing, and rural cooperatives) that include savings and credit functions; and (b) single-purpose, membership-based, financial cooperative organizations (e. g., credit unions and savings and credit cooperative organizations [SACCOs]). CFIs, which have been in existence in many countries much longer than non-bank, nonprofit NGO MFIs, are clearly distin­guishable from the NGO MFIs in that their financial transactions (deposit taking and credit giving) are generally limited to registered members under a closed – or open-com­mon bond, typically defined by geography (residence), occupation, or place of employ­ment. The rights and privileges of ownership in CFIs are based on the one person-one vote principle, and management is exercised by members-owners. In general, CFIs will outnumber NGO MFIs in many countries, and their combined outreach will tend to be larger as well.

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