Designing Financial Services for Rural Poor-Retooling Rural Financial Institutions

Retooling Rural Financial Institutions?
K Kaladhar Requirements of financial services for poor rural households encompass consumption smoothening, human capital formation, production and investment credit and insurance, in addition to savings facilities. While the informal sector provides most of the services, the formal rural financial institutions have inappropriate tools and perspectives in delivering the services. Unless institutions retool themselves by focusing on a rural household's economy rather than limiting themselves to activity linked lending, they cannot be successful in delivery of financial services.