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Posts Tagged ‘village finance’

Elite Capture (2)

Posted in Financial cooperatives, History, Microfinance, tagged , , , , , on March 2, 2012| Leave a Comment »

By 1979 only 61 of the 400 Comilla cooperatives were still functioning.  One observer attributes this result to four factors:  fraud/lack of internal controls, stagnation, diversion of funds, and ineffective external supervision. The central problem of fraud and weak controls “was possible not only because of individual dishonesty, but because the people were not made aware of their rights, and were not in a position to voice their rights (Aditee Nag Chowdhury, Let Grassroots Speak, p. 54).

Partly as a result of Dr. Khan’s experience, later Bangladeshi practitioners in microfinance, such as Dr. Muhammad Yunus and Fazle Hasan Abed, (more…)

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Elite Capture: Comilla

Posted in Financial cooperatives, History, Microfinance, Uncategorized, tagged , , , , 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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Rural Market Failure — Shareholder Rights

Posted in The village, Village institutions, tagged , , , , , on February 1, 2012| Leave a Comment »

Saving at home is convenient, private and predator-free.

In a study of 301 households that belonged to village financial institutions (VFIs) in 37 villages in Cambodia, my team from the Canadian Co-operative Association asked what would cause them to deposit more savings? By far the strongest response was: “the managers must show more respect for the rules.” (Towards Safety & Self-Reliance, p. 51.)

The rules to which they referred were not complex: they expected the managers to refrain from (more…)

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SMDP Tanzania 2011 — The Next Level of Practice

Posted in Village institutions, tagged , , , , on August 5, 2011| Leave a Comment »

A member-based perspective on Village Finance.

SMDP Tanzania 2011, scheduled to take place in Arusha from Oct 10-14, is a program uniquely designed for village finance practitioners. A basic banking rule of thumb is that there are 4 savers for every one borrower — with enough demand for savings to finance that borrower. SMDP Tanzania is the first program to truly embrace the needs of poor savers!

My colleagues at SMDP will cover VSL from a technical perspective. The course on ‘Village Finance’ will inject a fresh, field-based and member-based perspective on program design and strategy (more…)

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The Gold Traders of Kampong Chhnang

Posted in Microfinance, The village, tagged , , , , on July 11, 2011| 2 Comments »

In Asia's villages, girls often wear gold. Photo credit: Vincent Johnson

A few years ago, in a small village in Kampong Chhnang, I met Ms. Cheng Yeng. In her early 40s and mother of 3 grown children, Ms. Cheng was clearly an excellent household money manager – bright, articulate, and shrewd. She told me that she uses cash earned after her rice and palm sugar harvests to buy gold, last year at $38.50 per chi.

Yet in the months before the harvest (more…)

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Why Study Village Finance?

Posted in Financial cooperatives, Microfinance, tagged , , , , , , on May 21, 2011| Leave a Comment »

Field portion, village finance auditing course, Cambodia, 2007

About 8 years ago I visited a small credit cooperative in Cambodia. Its chairman was a cheerful farmer with greying hair and callouses who wore neat business clothes with a krama (a square checked Khmer cloth) flung jauntily over his shoulder. He presented a sheaf of neat hand-written financials to me, with his signature and the treasurer’s jumping boldly off the bottom.

As we visited borrowers (more…)

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The ‘village finance’ segment

Posted in Microfinance, The village, tagged , , , , , , , , 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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