Financial Intermediation by NGOs in The Gambia: A Complement or a Substitute for Indigenous Self-Help Village Groups?
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Publisher:Ohio State University. Department of Agricultural, Environmental, and Development Economics
Series/Report no.:Ohio State University. Department of Agricultural Economics and Rural Sociology. ESO (Economics and Sociology Occasional Paper). No. 2094
This paper analyzes financial intermediation of two types of NGOs and assesses their complementarity or substitutability for the functions previously performed by indigenous self-help village groups (kafos) in The Gambia. The emergence of NGOs providing village level services is found to be only a partial substitute for the financial functions traditionally performed by these indigenous village groups. Institutional duality is, therefore, observed due to the coexistence of indigenous village groups alongside the NGOs providing multiple services demanded by villagers. The complementarity or substitutability of NGOs for kafos is largely determined by their institutional design for the provision of financial services. NGO programs that provide financial services based on lessons learned from kafos tend to complement rather than substitute for the kafos. The villagers seem better served this way. These findings have implications for any interventions which disrupt but only partially substitute for traditional village arrangements and institutions.