There is no single blueprint for providing financial services to the poor that works in every location. However, technical support and training for the poor are preconditions for success. Community financial institutions should be controlled by their members and encouraged to experiment with different approaches to providing financial services and with various savings strategies. Regulations to protect savings and to minimize loan defaults are necessary. Interest rate subsidies are unnecessary.
Poor people are willing and able to borrow at market rates.
The obstacle the poor face, particularly poor women, is access to loans. Government can provide moderate subsidies to support the development of financial institutions and lower the costs of processing small loans, but interest and transaction costs should be borne by the customer. More credit should be focused on agriculture. Farmers with access to credit use improved farming technologies. Most agricultural credit schemes failed in the 1970s and 1980s because traditional banking approaches were used.