Community Savings Funds: Providing Access to Basic Financial Services

Community Savings Funds: Providing Access to Basic Financial Services

Co Dlu.nity Savings F n,ds .'rovidlng Ace 55 to BaSIC Financial Servic.· S in Marginalized Rural Area of M, .ico h .briala Zapa, a bstracll Th~ Community 511"w'lr-' FWld~ (C5Fs) prt>mote. by ,bi: .MinIS r~' i) AI:II'"J£"uln1ri~ 111.. ~ic[} ;sc~k [Q pf(n'ld~ margwllZecl com' munl.l:r !til'QI!P~. Wlth-,:I j;impJ .ffi(!duuusm [bat GWS dlem [0 s.J,\'!! im~ admlnl [f II ir OW" Fund. ~!.'r.urcJy. stficUUJdy. and ptO u;'I!:tly, iii Of iJlIi l 'lh'r.I' gl'''n nee<!, ",td prr WH;'. l'e: 'ilIly [f~ ned prtlfll<H' hdp .li~( up CSFldGf p ld one)" 2r-usHlg " St'l1.lldlilrd.IU~ Toolklt.-;J ttl' w,hicn tlley ~n elt ro ,",or ~u om 11"1,', There iU'l: 54 CSFs n l~:!I[ [e.s wnb. <l·ver U,800 m~[[Jber ;lTIa &l1vJn.gs l'Ol.11· ing 4.-'15 milli II p~o~ {US 544', c.:lJ, Thn p3pllrd~rih~ili char,y:­ I~Th(Jc$ • th 'SF tn,oJ",1 .:loti [be rJ!:S,uks to d,3l'S. I.r discus~J, impl mMfOllloi} problems or! is t,le lLit Jll.Jlbilirv :md g:t \nh Ifl iJg.h[ of lb{' on.' Rfiul.itor~ !1\'t (>nm<!tl~. t Iso b. It {' viil"[y md de-sJ.T.J.bili . f -amOllomDU5 5~-Vin 'ami tr~dJt ~l'OU~ ill the tom mum l/!"'el ~odrhl: old':UI;tlI,jl:1:S .and disad\"Jot.t C3 of their illC1Wiio'tl int.;. [h~ f rm..] rin;lll:l~i.d 5~ r. Introdl1l: '011 In 1 97 die tn n lvliniscr 0' Agric lrure Liyest vel pm I in e. ic 1 n~bed the Rural ev 10pment in Marginal Ar as :Progr~l hi SOJJ~h[ to impro re the 'c:lJ­ bei.ng :and in ODli' of s allhold rs Iivil'l ' in c m.muni Les I) ess than _,Sao inhabit:ant~ in 14 of the most marginalized rural Journal of CTO i.nancE' ill" S In r. O,'e:r me IU~Xt fl." ears h program pro j d fULnd~ for rur 1 inve~ III nr p ojects to f rmers' groups ode a m.:;u:dlln~~p-d,n~ dieme and. odu:-. suppan: i>er· 'Ie Ii (rcsear ,h. exte ion in orm:ltiOIl. nd u1tinlR to 0 er J5 000 brmer in Ij states, Thl! pr gram proID u:d iUl. inv r~nt-:r C' \"ery att' 1t·­ lIli m he end 0 tho: produ i~'e c 'de gradu', - redu e f -rmerS dep~nde'llCY n ~<'i.D s nd fos[l:. bt.'t:'l:cr cOtin.tabiliry and re ,urce g ner<l •on [(he communi~r 1 vet oder {hi schem!: partic! dtin [<imler:!>' roups V{~re {"};.pcct d. to c e previousl . agr (ce age f the r urn m the'!" investmentin oed r to Sif't 1;1' a revolving fund, h'tensloD work IS ssigned to work wilh f rulers' groups we e Ul cnan:e o veri' ing tha.t roups ~ , rll' indeed "recovering" p r ora," o [heirreturns. be incend sys em was buH Of! [he 0 eepr of community t spon.sibili . and p:lrticip.;lt!on, indudin pCl!r pr ssur • If a p nllJula.r f m r • grou failed t I:t asid.e a poC'· tion of ilie retur.D-f>, the member'S of tbegroup auld lE:C iv 00 fnber oonms. h idea Wi(! htl recov;e ed funds keep rev tv­ hag at tile communit ' lev 1:acc.omin m illleroal priorities and detisi n·m, king med .3llis How \r r. no m thodolog;y was provid~d torL up the!>'!! t'evol 'int; fund, f rmers' roup. ither $penr rein vested s rplU$ und.5 ilt will, ox: opened a group bank ilccoum .he·n:: such fadlid~s ere avail blc iih ne<1h 'bi imere5t nHe~­ e.itbf!:11eavll . he funds Idl or usin them as t.bei:rcounterparr ontrib uon' for next y This $i uauon OI.ced. e tinistry _0 look Or a s ndard­ ize:d Jl1 rhodoJogy th.r ould~.e used by comm ni - roups 0 s: p he fevol ' 1§ funds. til mid· 0 a thE' l\Ilims,tr . recelyed orld Bank fu.ndi.n 0 hirtl speci~ d con ui ~nts fa a. p ri d f • monrhs I design ndlaunch rhe projec _I During .hi timel d prop .r methQdclog md a [1011 pl;m 'I!.re G.llm.eJ.r LqJar.r (1 L)I? D' 'e'rnJ1' of Ptof/W r~m .tmJ Fir! 1{1,;11 6~lfm<:aClolfS fi r if; HllIirtry ofAgrlr!lilfllrt In ..I1tt1to ,mel 11ll!: UJetrtJin.IlrJr &jlDt. RIm:t M!t'1o/1rwll Tet:h1J/eJi ,&<mt.mCl" pro.rer1 J7Tti tb· CGrrrl/7Hnily .t.ti'P,;,w .Ful'ldJ r~Q.tft't. Emili!; fi,rgfin,rJgpl'@agar]J'6l.gDb.mx 164 -olum!!" u1U~r .2 'develope w set up Communh'Y avillg Funds ( among pa kipatin tillers' -groups. The ob'ec:ti 'e 0 [be C Fs "'H TO rov'de marginalized communi ~ oroups with a. impl!!! m dl ni:sm 111. t would 11 w rh m. v d d' ini et dl€:i ovm fund sccl.md eHicicnd, and profitabl:. Th~ concept of "re v •. wa fOp ed aud tl; "dea of "sav'ngs" was pro­ moted InSteild. Fe-daily rrame CSF ptotnoters b~gtln to . ark with community groups, emph.aslzm that (11. particip:nio,n in ~ CF wa C'omplt'tel o}unL'Ij'; ( ) he mone, sayed b h indi ..dual bel uaed e,nlusiv I to cl1 indi j ual: nd (c) C'F ' were aurooomot.ls-witb all ec:islclD.-makin,g in. me hand5 0 . 0 p m moe lhemsel es, . Fs. we ,e fun ' d l: rough mem­ bers' 5a ....-in s, remittanc er ageS", lnce [he prognun pro-­ vided no external sel!d capl al for their setup. It did provid t:h rinl g to operate CS. s: b ;'! promorer at an "AcLnini trativ Toolltir. e rlSi~-tl.np f ~im 1 bur dequ, record.·kee-pin.g tools and e-as '-referenc~ m,lllu;lk The., >Ire proxim:nel 4_0 C P formed. th.r ugh the M rgina.l Program in 12 states, icil ov~r 1L.500 mem- hers a.nd savin s totaling O,me 4.090\000 can esos (U 409 00). E ch 'F h 11 • ime ~l:tl1P an f"(ll1ow·u co t of aIJ u 10,8 pes .(U~ 1 084 r 310 peso (US ~) cr.:mc.m. her durin"" th<! first yc:ar.) Th Se h:g:w'es 1irt: approxima ion ased inform cion ;)';,aihb1 io the r je,CI COQrdinatjon Unie: monehJ' r~ports sel1: 0 this, IDe b! parcicipadnc stine. a.nd 3. n mber 0 field vi·~..i.ts. lnee no thorough ~v'alu­ rim:] 0 "the project h s been l~olldl1tied TO date tbe .h report d huC' Ie: nOl con 1 iv. An di lanai LO F h been se up by allOng;OYfrnmental organization.in the ,are of Gl.l r r > w ich reqLl red [; aining in for its redi 1ft er: in the SF methodo]ogy earlier tills year. SiKt ' of thos~ CSFs-u repOrtea T be .uH:' operational wi.th 1.384 worn nand :;;a .....ings f er 360 000 pes s< (US $ ,000). Showi.og that Sllv..i:n.gs led miuofimuu:e is no ani UI sim d , fri ;l..fl ph nomen b.'1e ll.<m overo eot h \I under- wrjn n the training o' 420 Communi.t Sa. ing< .Fuods with Volume' umber 2 1 5 Jounal of MiCTofmafice ().ver 11,600 membus sine m,jd 2000 ~d ha~ pl.uu to ~ pand . hi numbe!" to _ 00 Wl-t mOff! than .000 memb rs () ~r he J1~X eVt:ral yeo . E h. C F bifue it 0 avi' film- g.es iq own loan Jund. similar r ,L!l ot:hCl' df-.hd group ini­ i.ti-ves. on.s~dering Ih;1[ n]' -+ Q h cigh illiol1 econowically Ilc:rivc: popu1aliofi in thl'l rural arraS of lh coun­ t}1 h \'e access to financial services from banks nonbank finan· i.al insri Utl011S. or Q.overnmetl . ti n ies the ,premlOlI to develop' th.is m·arke niche is rC.t. ( h.ere is likel.y 0 be a sima ~lu demand. for bese oervice~ LI 0 h r ~'oo L~uin A, ric n Cou.;l1l:ri .) The- coS{ 'Or r ... i· a group 11'\1 1';'1 e 1 p~ ·group member ;md ine:1uqes die ee ID the prommer. UaDS· po [aliol a d mod,e] kitt at pen : nth s e S llt=et1ed r manae a group. Given Current legislation. pr ic r C ordi­ l1,ators a.te'developJl]g traregy to link' hese groups 1:0 "the for­ m lin' ndal ~c:: tor while . i g t" the nc:~d fo thl:poor cqn.rinu ito be met. In he course ohh's y ar, the fiQisrr' has had l:Q r€tbink it!> CSF co solicLttion nO eXp<lll io sttateg:)'. ()~··n to dl le-.ssons lttarn d. Om experience :IS well :as the passing 0 [he new ;wings 3n,d l"edi 9W' b ongress _001.

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