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Microfinance

Expanding Microfinance Access

Microfinance can be defined as the supply of banking services to micro-enterprises and poor households. Apart from microcredit, microfinance services includes savings, insurance and money transfers.

DanChurchAid is the Danish NGO with the highest level of microfinance activities. In 2007 we supported microfinance in 50 projects in 14 countries. Microfinance can be the core focus of an intervention, or a component in our integrated approaches to development in an area.

How we work with microfinance

DanChurchAid's partner, the Lutheran World Federation, has been establishing a total of 200 community-based village banks since 1996 providing microsavings and microloans. Watch this small film about a rice bank, where villagers can save or lend rice. Thus, the bank is both an insurance against hunger disasters, and a way of accumulating savings as a village.

Microfinance can be a powerful tool in improving the livelihoods of the poor. Access to microfinance services often has a positive impact on food security and livelihood situation for poor households. Especially savings services have shown to reduce vulnerability thereby improving food security and stability in the face of economic shocks like droughts, decease or death. Also, being part of a microfinance group or a client in microfinance institution can increase self-confidence and build up acceptance and credibility in ones community..

When we work with microfinance, we are committed to do so in a sustainable and responsible way. Microfinance is always complemented by other advocacy and empowerment initiatives and when setting up credit and saving schemes we ensure that the necessary capacity and procedures are in place to ensure repayment and monitoring. Borrowers must have the necessary repayment capacity and must be protected from excessive debt..

Read more on our approach to microfinance in our guidelines

DCA Microfinance Guidelines 1.60 MB

Or get a quick overview here

Microfinance at a glance - You do not have permission to view this object.

Microfinance at a glance 91.00 kB

Read more - Articles about microfinance


15.06.2010: Guardians of the village grain bank
Two village grain banks have secured the future for the villagers in a tribal hamlet in northern Bihar Read more...


04.02.2010: Counting the chickens...
The chickens of Mtoso village get more attention than the average Danish egg layer. The women of the village gladly perform a song of gratitude about how the chickens have changed their life, whenever there are visitors. Read more...


07.01.2010: "Too risky to save in my hut"
Being a single mother of two in rural Malawi is no easy task for Joyce. Her income is highly unstable, and she has to rely on loans from friends and relatives during tougher times, since she has no means of accumulating savings. For poor people like Joyce, access to microsavings is the way to a better, more stable future. Read more...


02.10.2008: Pop songs are luxury in the maizefield
The Malawian farmers slog away in the dry fields. But that isn’t always enough to provide their families with food. The ELDS program helps the farmers to save money and groundnuts, to secure that they don’t starve. Read more...


20.05.2008: Poultry farmer with micro loan
A flock of chickens and a hen house. This is what the 40-year-old Chanthon from Cambodia’s Battambang province got for the DKK 150 which she borrowed in December from a local lending group established by LWF Cambodia with support from DanChurchAid Read more...