Reconstructing microfinance in sub-saharan Africa: Searching among social business, social banking and “co-management microfinancing”

As institutionalized microfinancing has come under much criticism along its quest in Sub-Saharan Africa (SSA), not least globally, the search for a more sustainable pro-poor operational approach is being sought. Nobel Laureate Mohammad Yunus believes that social business offers a more multidimensional approach capable of addressing the most pressing social and environmental problems of especially, poor people in developing countries. Besides, social banking/finance is also being advanced for the social welfare of the poor-but-entrepreneurial. However, although the two concepts have some overlap: arguably, they all root for better ‘impact investment’ with both objective and normative benefits, microfinance cannot be wished away from being a viable part of an inclusive financial system. With recourse to past and current development approaches in most of SSA, which tends to believe that ‘growth’ requires a capitalist/entrepreneurial class to boost industrialization, the strategic development conceptualization seems to suggest the relevance of “successful creation” of individual livelihood initiatives at steady and reasonable wages as the most promising basis for self-employment. Taking a process perspective on sustainable livelihoods, induced by a thought-out financial system which works better for the poor, we present “co-management” microfinancing as a distinctive way of thinking about inducing the desired effect of microfinance to live up to its billing.