Project :- Advisory on formal financial linkages of community based institutions

Category :- Our Work

Date :- Wednesday, December 31, 2014

M2i Consulting has provided advisory services to CARE in Kenya and Ethiopia to design appropriate models and methodology for linking VSLAs to formal financial institutions. The specific activities carried out by M2i included:

  • VSLA Need assessment and prioritization.
  • Scan of financial system, regulatory environment and appropriate transaction platforms which may have implications on VSLA linkages to financial institutions.
  • Analyse existing products and delivery systems of the financial institutions and mobile payment service providers to identify the product and delivery channels that are most appropriate for responding to the needs of the VSLAs.
  • Develop appropriate linkage model and financial products.
  • Identify and initiate dialogue with short-listed financial institution(s) for potential linkage to VSLAs. Assess their willingness to adapt their products and delivery channels in response to the VSLA needs and to link to the VSLAs.
  • Design and suggest a pilot program for linkage between VSLAs and identified financial institutions. Also suggest the evaluation criteria to determine the success of the pilot, based upon which, the pilot could later be scaled up or modified or winded down.


The advisory provided by M2i to CARE in Kenya, has enabled CARE to link its VSLAs to Equity Bank using Orange’s mobile technology platform. M2i provided the framework for linkages, suggested products, recommended adaptations required in existing technology and recommended Equity and Orange as most suitable partners for such linkages. Following these recommendations CARE initiated the formal financial linkages with Equity Bank using Orange’s mobile platform.

M2i has done similar work in Ethiopia for CARE. However, since the regulatory framework and other factors in Ethiopia were quite different, M2i has recommended a different linkage model for Ethiopia which recommends aggregation of VSLAs into Saving and Credit Cooperatives (SACCOs) and then linking them to formal financial institutions. M2i, in its recommendations has explained the entire linkage model and operational details.

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