Characteristics of household demand for financial services in highly uncertain economies : a review of evidence from Burkina Faso[La demande des ménages ruraux pour des services financiers dans des économies hautement incertaines : cas du Burkina Faso et d'autres pays africains]

Our main objective in this chapter is to review empirical evidence showing that, when an analysis of true household demand for financial services is conducted, important market niches for financial innovations can be identified that are not filled by existing financial institutions. Indeed, in a context of high uncertainty and poverty, true household demand for financial services is more diverse and complex than is observed demand. In the same context, because of their particular characteristics, informal financial institutions can satisfy only part of the true demand. Financial innovations could effectively lift many of the constraints faced by rural households in their access to financial services, given the appropriate regulatory and legal frameworks. In the absence of formal contingent valuations, I this analysis of household demand for financial services was conducted on the basis of combined analysis of actual informal financial practices, the role of savings and credit for household economies, and the performances of microfinance projects launched in the late 1980s (in terms of outreach, services offered, and financial viability). After reviewing the household socioeconomic environment, we summarize the major findings from studies conducted in Burkina Faso by the Centre de Coopération Internationale en Recherche Agronomique pour le Développement (CIRAD) on the characteristics of household demand for financial services. We then discuss how these characteristics might shape the promotion and building process of microfinance institutions.