Women and Men in Rural Finance in the Syrian Arab Republic: State-Owned Banking vs. Self-Manged Microfinance

Document states that there is serious concern about social equality, equal opportunities and the effectiveness of financial institutions to provide service outreach. Examines:

• Access of men and women to rural finance under conditions of social equality and economic disparities;
• Client and institutional perspectives on transforming an unviable bank - Agricultural Cooperative Bank (ACB) -
  into a sustainable financial intermediary with outreach to low-income men and women;
• Men and women owners and users of Sanduq - a microfinance innovation in Syria.

It finds that the Sanduq is a financial institution of the people, which has demonstrated that:

• Poor men and women can save, invest small short-term loans profitably and repay their loans on time;
• The poor can manage their own financial institutions with prudence and provide appropriate financial services;
• A culturally appropriate way has been found of empowering women through joint ownership of the MFI, but separate appraisal of loan applications by the women themselves. As viable financial institutions, the sanadiq have expanded their outreach.

The paper finds that ACB:

• Might have an important role to play in the growth of rural finance;
• Is weakthrough its lack of autonomy resulting in governance problems and a mixed between profitable commercial operations, loss making operations and inverse interest rate structure.

IFAD proposes to provide credit funds through arrangements with ACB and to finance income-generating activities through sanduq which could lead to linkages between the institutions and the wider financial environment.