Understanding financial cooperatives in South Africa, Malawi and Swaziland

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FinMark Trust commissioned Genesis to better understand the role and use of co-operative financial institutions (CFIs) as viable alternatives to the commercial banking sector for accessing financial services for lower income individuals in South Africa, Malawi and Swaziland, as well as best practices in the sector.

Interpretation of the Terms of Reference

Based on the research, and in the context of the CFI sector,  financial inclusion is considered to mean financial empowerment, through the promotion of improved financial capability and financial freedom. Having the skills, knowledge and confidence required to make sound financial decisions, partnered with the appropriate opportunities and access to financial services, is an integral component of responsible, inclusive and sustainable financial systems. This is particularly relevant to the fundamental principles of CFIs, which enable communities to create self-managed financial services and provide education to members, elected representatives and employees.

CFIs is therefore viewed not as an alternative to commercial banking, but as one option or opportunity out of what should be an inclusive mix of financial institutions that provide appropriate financial tools based on people’s needs.

The interpretation of the focus of this study is therefore to better understand the role the CFI sector can play in achieving the objective of financial and economic empowerment in southern Africa, with the principles that underlie and guide co-operatives forming the heart of the sector’s value proposition.