Institutional Design for Financial Intermediation by NGOs: Implications for Indigenous Self-Help Village Groups in the Gambia

This paper examines the implications of the institutional designs employed by two types of NGOs for the functions performed by indigenous self-help village groups called kafos in The Gambia. NGOs were found to be only a partial substitute for the financial and insurance functions traditionally performed by these kafos. Institutional duality is, therefore, observed due to the coexistence of kafos alongside the NGOs providing the multiple services demanded by villagers. The design of NGO programs based on lessons learned from kafos tend to complement the kafos, and the villagers seem better served. These findings have implications for interventions which disrupt but only partially substitute for traditional village arrangements and institutions.