|Where Does Saving Fit into Micro-finance Systems? (GRET)|
|Part one: Economic policy factors, the financial sector and the role of micro-finance systems|
M-F systems in West Africa
Although they have existed since the 70s, it is following the collapse of the development banks that decentralised financial systems really developed.
Contrary to the way in which State banks operate, decentralised systems give powers of decision and organization back to the local level. They draw on informal systems, notably tontines (or subscription loan funds ), but also on European cooperative movements. Today, although still not very widespread, they generally fulfill a recognized role. The BCEAO has recently devised for itself a framework law on M-F systems. There are a great many M-F systems in West Africa. Countries such as Mali, Burkina Faso or Guinea have several networks of regional size.
Three types of system are generally differentiated,:
- COOPECs, savings-credit schemes inspired by cooperative concepts;
- self-managed village schemes;
- solidarity credit schemes. The latter concept has relatively recently been introduced and is inspired by the Grameen Bank.
In Southeast Asia
As far as micro-financing is concerned, the regional reference is without question located in Bangladesh, with the Grameen Bank. The crowning achievement of the M-F systems movement, the Grameen Bank has moreover inspired experiments scattered throughout the world. In Asia, experiments inspired by the precepts of the Grameen Bank are to be found in Malaysia, in Indonesia, in the Philippines and in Thailand.
At regional level, the Bank for Agriculture and Agricultural Cooperatives (BAAC) in Thailand, and the Badan Kredit Kecamatan IBKK) and the Bank Rakyat Indonesia Unit Desa (BRI),both in Indonesia, are most noteworthy.
The BAAC has been in existence since 1966. It reaches approximately four million agricultural households and is an important regional reference, in the sense that it is in fact a bank which has achieved decentralization and which adapts itself to demand with flexibility, both from the point of view of its links with its clientele and that of the financial products it offers.
Decentralised rural credit is a new concept in the three countries of the Indochinese peninsula Under a collectivist regime, credit needs exist but occur more at cooperative structure level than at family level. It is the cooperative which provides inputs and which organizes production, and the cooperative manages the problem of financing.
Collectivism took different forms in the three countries. Depending on the degree of individual liberty accorded to the peasants, attempts to distribute credit were nevertheless made in all three. They were on the whole resounding failures (high rates of bad debts, nepotism and interest rates set too low). All in all, rural credit has never figured as a priority since the advent of the communist powers.
When in 1991 Gret began to work on credit with officials of the Ministry of Agriculture of the State of Cambodia, it was clear that the latter were using as their main reference the old system of agricultural credit of the 60s, the results of which had been mediocre.
Barely a few years later, things are very different. Despite their long period of isolation, despite their lagging behind in updating new approaches in the field of rural development, these countries are introducing and adapting new concepts of micro-financing.
A detailed examination of the situation highlights wide disparities between the three countries:
The rural financing sector is essentially occupied by the Vietnam Bank for Agriculture (VBA), created only in 1990 and which has since achieved good cover of needs in rural areas. Approximately 30% of rural families are said to be involved today. Its operation is relatively well decentralised and its results seem good. Recently, popular credit schemes - a system inspired by the Desjardins network in Canada - have been installed. Finally, a "Bank for the poor "has just been created (in 1995).
The Women's Union is very active in the field of credit and uses a system inspired by the Grameen Bank. Other projects are carried out on a smaller scale by international organizations, sometimes in fact via the Women's Union. Gret for its part works in collaboration with the VBA, with a view to testing a system for the refinancing of village schemes by the Bank.
There is no development bank. Most of the credit distributed comes from international projects. The authorities have just created a Credit Committee for Rural Development, in charge of the preparation of national policy approaches with regard to decentralised rural credit and of making sure they are applied.
A Bank for Agricultural Promotion of has recently been created (in August 1994). Decrees for the creation of credit cooperatives have been published,. There are also a few projects being led by external operators but on a much smaller scale than in Vietnam and in Cambodia.
Overall, as Gret's experience in these three countries shows, it seems that the prospect of M-F systems development is of great interest to the authorities. This is particularly true of Cambodia where, far from hastening to create a development bank, they ore mainly relying on the rapid development of existing decentralised networks.