This paper uses a new dataset to test whether  financial intermediaries are able to offer an attractive alternative to moneylenders for small borrowers. Among several factors under consideration by prospective members is an evaluation of the perceived risk involved with membership based on unlimited liability. Using a trust index we can show that most mutual institutions are not attractive in the sense that prospective members must trust a disproportionately high share of members to find joining a mutual institution attractive. In the medium term, this leads to a non sustainable financial system. We also draw conclusions about the sources of this unsustainability and ways for mutual institutions to correct it.