Two major groups within the rural poor can be identified for banking purposes: the bankable poor and the non-bankable poor. The former are often in the subsistence sector with small commercial sales. They have a very small level of savings and loan demands. Banking business with them has high transaction costs. For this reason, they are not served by commercial banks. Nevertheless they have some saving capacity and access to some resources. Because of this, the bankable poor may engage in banking operations in a business-sound basis. In contrast, the non-bankable poor include very poor farmers on marginal land who have very little investment opportunities or resources to draw upon. They need assistance on a partial or matching grant basis, which may be made to groups for group projects. In this way, capital formation can be induced. In cases like these, the donor or the state does not expect repayment although members can repay their group (for a revolving fund) in cash or in kind.
The farmers in Vaishaili Area Small Farmers' Association (VASFA) formed a registered society, procured bank loans and bought equipment they needed such as a tractor and other implements. This prevented their exploitation when hiring equipment from others.
For the poorest of the poor, financial services must be offered in combination with other programmes such as training in basic literacy, enterprise management, and education in nutrition, health and family planning.