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Posts Tagged ‘trust’

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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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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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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