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Remittances: Loan Funds for a Rural Economy? Evidence from the Kayes District (Western Mali)

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Emerging Challenges and Innovations in Microfinance and Financial Inclusion

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Abstract

In addition to having a direct and positive impact on reducing food insecurity and poverty gaps in countries that are more vulnerable to rainfall shocks, the funds regularly received by migrant families also enable them to make savings. This is revealed by self-managed village funds in the Kayes region, the largest emigration basin in Mali, located in an area with strong climatic variations. But savings contribute only slightly to the financing of the agricultural sector.

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Notes

  1. 1.

    Money Transfer Companies: Western Union (world leader) barely matched by Money Gram.

  2. 2.

    “Rural poverty still explains 90% of national poverty,” Lachaud (2005, pp. 2–3).

  3. 3.

    According to Rocher and Pelletier (2008, p. 35), the geographical coverage of MFIs and their proximity to poor-rural families is an additional advantage over other operators in the remittance process.

  4. 4.

    Cover options for crop failure, price volatility and livestock mortality.

  5. 5.

    Inspired by the idea of insurance products designed by the AfDB (2007, pp. 53–54) for the formalization of remittance channels.

  6. 6.

    “Safe saving is often a more important service than credit,” Fouillet et al. (2007, p. 346).

  7. 7.

    Subsidies from the French Development Agency (AFD), shareholder of the National Bank for Agricultural Development.

  8. 8.

    Remittances, whether formal or informal, are in all cases well received by AfDB households (2007, pp. 35–37).

  9. 9.

    Data provided by the literature due to lack of up-to-date information.

  10. 10.

    Of the 5658 municipalities in the country, only 4% do not offer formal banking services (Gentil & Servet, op. cit.).

  11. 11.

    It leaves the investor with a kind of “tracking card” with personal information and checkboxes for each payment. The number and period of payments are known in advance and correspond to the number of boxes checked (Lelart, 2006, p. 6).

  12. 12.

    From the Neapolitan banker Lorenzo TONTI, he was at one time Louis XV’s financial advisor and is said to have put forward the idea of the first public tontines (Lelart, 2006, p. 9).

  13. 13.

    In this respect, tontines were not only the preserve of populations excluded from the traditional banking system but also a cultural and social practice. Indeed, according to Lelart (2006, p. 16), even among African officials at the World Bank, tontines are practised.

  14. 14.

    Also known as street bankers, often solicited for short-term loans at excessive interest rates (between 100% and 125%).

  15. 15.

    For example, risks of low harvests due to climate change.

  16. 16.

    Antony Fouchard (23 May 2017) for the newspaper “Le Monde Afrique”. Available at: http://www.lemonde.fr/afrique/article/2017/05/23/dans-la-region-de-kayes-au-mali-les-habitants-comptent-sur-la-diaspora-pas-sur-l-etat_5132637_3212.html (Accessed June 2017).

  17. 17.

    The main financing body is the Agence Française de Développement (AFD) and the technical support structure in charge of training network agents, called the Centre d’Appui à la Microfinance et au Développement (CAMIDE).

  18. 18.

    Living conditions during the first year are often very difficult for the new newcomer.

  19. 19.

    Onions, tomatoes, bananas, Arabic gum (the purest in the Sahel) for export (Fouchard, 2017).

  20. 20.

    Credits mainly granted for trade (67%), in fact without major climate risk; agriculture covering only 4% of loans (agricultural equipment, seeds, inputs, plant protection products) in 2006.

  21. 21.

    10,069 savers in 2011. Available at: www.mixmarket.org (Accessed February 2015).

  22. 22.

    Dedicated to family and community (Ndione & Lombard, 2004, p. 11).

  23. 23.

    More information provided by the applicant client than before.

  24. 24.

    Based on a migration slogan inspired by Ponsot and Obegi (2010, p. 18).

  25. 25.

    Number of dependent individuals per family because in Kayes, subsistence agriculture (food crops) is reported to predominate (Loveluck, 2008, p. 18).

  26. 26.

    Lack of road infrastructure leading to considerable maintenance costs.

  27. 27.

    Very common among the Haalpularan (Peule and Toucouleur population).

  28. 28.

    Three to four months of the rainy season and eight to nine months of the dry season. The growing season is the rainy season (Ndione & Lombard, 2004, p. 17).

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  1. Faculty of Gembloux Agro-Bio Tech, University of Liège, Liège, Belgium

    Michel Namé & Philippe Lebailly

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    Joana Silva Afonso

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Namé, M., Lebailly, P. (2019). Remittances: Loan Funds for a Rural Economy? Evidence from the Kayes District (Western Mali). In: O'Connor, M., Silva Afonso, J. (eds) Emerging Challenges and Innovations in Microfinance and Financial Inclusion . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-05261-4_3

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