community banks idea came about because CRACYP
operates in a rural area with little infrastructure. The
bank branch is about half an hour's drive away and therefore
inaccessible to many people in remote rural communities with no
transport. In addition, the level of
literacy in the area is not high and some people cannot understand the
paperwork needed to open a bank account.
banks offering microfinance
is an idea we introduced in the local area some years ago.
A group of people
contribute a small amount each week to create a fund which can be lent
to members of the group - who might perhaps be ineligible for a loan
from an ordinary bank, or unable to read the documentation.
Evidence from around the world has shown that this type of
micro-credit or community loan is very effective in fighting
communities took up the
with enthusiasm and CRACYP provided training and advice. The
default rate on loans is very low,
because the community bank members all know each other, so
there is a strong
social incentive to repay the loans. Help is available with
the paperwork for those who need it.
community finance project has been very successful and there are now
over 100 community
banks in the area, operating independently from CRACYP. In
total, they lend thousands of dollars in micro finance each year,
boosting the local
economy and allowing families to borrow moderate amounts of money to
get through a crisis, start a business or invest in improving
their homes and farms.
Community Banks for Micro-Credit
A Green Progress initiative from
fighting poverty through community action and micro-loans