Observations of Five Development Programmes in South Asia

The following summary looks at five development programmes which have enabled the rural poor to obtain credit in order to modernise agriculture, gain access to employment, and increase incomes by learning and mastering savings control. Savings Clubs run by women from rural areas in Zimbabwe, the innovative methods of the Grameen Bank (rural). the initiatives of the Self-Employed Women's Association (SEWA) and the Working Women's Forum (WWF) in India, and the Small Farmers' Development Programme (P) in Nepal are all experiences which are rich in innovations and lessons. Some common features of these initiatives:

• active participation by the groups' members based on common objectives creates a large capacity for mobilising savings and attributing loans to production activities;

• Contrary to popular belief in financial environment, the poor are bankable despite their social and economic handicaps: the repayments made under these programmes are well above the average for traditional credit programmes;

• the emergence of new banking practices based on the following principles: grant loans to the lanless poor at very low interest rates; encourage the bank to become closer to the villages; replace guarantees by collective responsibility; give carte blanche to the borrowers with regard to how they use their loans, with repayments and procedures being subject to control by the group;

• the life of a credit programme is dependent, among other things, on its capacity to generate savings;

• the emergence of re-energising efforts in the region (going far beyond the target group) through the creation of empployment, salary increases, drops in prices of heavy-demand consumer goods and drops in non-official interest rates.

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Source:

Egger, Philippe, "Banking Facilities for the Rural Poor: Lessons learned from a few Innovative Savings and Credit Programmes" Revue internationale du Travail Vol. 125 No. 4/1986

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Hari Srinivas - hsrinivas@gdrc.org
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