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Posts Tagged ‘trust’

Elite Capture: Comilla

Posted in Financial cooperatives, History, Microfinance, Uncategorized, tagged accountability, governance, loan contract, trust, village finance on March 1, 2012| Leave a Comment »

The ‘cooperative wave’ of microfinance gave way to the ‘microcredit’ wave in the 1970s. ‘Elite capture’ severely damaged the cooperative wave in the South. The story of the transition from the Comilla model to Grameen Bank, at the inflection point between the movements, is exemplary.

The ‘Comilla Model’ was initiated in East Pakistan by Dr. Akhter Hameed Khan in 1959. Khan drew inspiration from the Raiffeisen credit unions of rural Germany. He envisioned ‘vigorous local institutions’ that could provide credit and access to markets for the farmers of Comilla district. The cooperatives (more…)

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It Takes Two Hands to Clap

Posted in History, Microfinance, Village institutions, tagged credit unions, democracy, poverty, trust on February 18, 2012| 1 Comment »

Flower mandala, Ahmadabad. Many great traditions need right and left to clap.

The founders of early financial cooperatives believed in ‘cooperation’. This was not a sentimental idea. It was seen as a practical tool for pooling financial and human resources where poverty was too great for individuals to escape by themselves. It required an almost obsessive focus on both prudent financial management and disciplined adherence to operational rules.

Democracy in private enterprise, and practical concern for poorer neighbours, are left-wing ideas. Prudent financial management (more…)

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Rural Market Failure — Governance

Posted in Microfinance, The village, tagged governance, orality, savings account, trust, village finance on January 13, 2012| Leave a Comment »

Savings bank in Cambodia. Keeping the savings promise is about far more than record-keeping.

Poor villages remain out of reach of many essential microfinance products. This is not a product development problem; it is a chronic and agonizing market failure resulting from a failure in the governance of microfinance transactions.

Oliver Williamson writes that “[a] governance structure is usefully thought of (more…)

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Saving is Freedom

Posted in Microfinance, Village institutions, tagged charity, emergencies, expense, farm, medicine, savings account, school, Stuart Rutherford, trust on April 19, 2011| 1 Comment »

In 2001 I outlined a proposal to a large charity to deliver savings to Cambodian villagers. The British director was quiet until I finished, when he announced: “there is only one difficulty with this proposal. Villagers don’t have any money – they are too poor to save.”

It’s been a decade since the publication of The Poor and Their Money, Stuart Rutherford’s classic rebuttal of this impoverished — and impoverishing — idea. But in development practice it lingers – as silent and influential as a racial prejudice — in our institutions and our thinking.

If you talk to villagers, don’t ask them if they save. (more…)

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The ‘village finance’ segment

Posted in Microfinance, The village, tagged farm, literacy, loan contract, numeracy, orality, seasonality, time value of money, trust, village finance on April 17, 2011| Leave a Comment »

Poor villagers in the developing world are a distinctive, underserved microfinance segment. There are nearly a billion rural people who make less than $1.25 a day, and most are illiterate or marginally literate, so microfinance documents are inaccessible to them.

There are three widely neglected factors that make rural microfinance fundamentally different from urban microfinance. (more…)

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Posts Tagged ‘trust’

Elite Capture: Comilla

It Takes Two Hands to Clap

Rural Market Failure — Governance

Saving is Freedom

The ‘village finance’ segment

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