The relative risks to the savings of poor people

Clearly, this type of external accountability increases the trust of poor people in the institution and thus facilitates the institution’s savings mobilization activities. Thus serious semi-formal sector MFIs should want some form of external accountability.

It is important to improve internal supervision (accounting systems, internal control, governance, adequate transparency to allow members to make their own decisions about the risk associated with saving in the institution etc.). At the same time, the microfinance industry has to search for alternative and appropriate approaches to external supervision, probably a voluntary system based on decentralized, nongovernmental bodies.