Paper

From Ends to Means: Savings and Credit as a Means to Community Mobilisation, People's Power and Housing Finance

People’'s Dialogue Report of “ACHR/TAP Workshop, Bombay”, 25 Sept-19 Oct 1996, Bombay, India

This paper explores the workings and the achievements of the people's organizations using savings and credit, as vehicles to mobilize communities and source finance from government and bilateral agency programs.

The paper presents the characteristics of community based finance including:

  • Using savings and credit as the entry point for social mobilization;
  • Involving collective (group) loans;
  • Placing loan component within subsidized program of support;
  • Established groups communicating with government and bilateral agency programs.

The paper highlights the positive impact of saving as:

  • Allows groups to begin small scale loan activities;
  • Develops skills and resources needed for accessing external credit.

Describing the importance of small loans, the paper states that they:

  • Provide benefit to the members in terms of improving their economic circumstances;
  • Strengthen the financial and organization skills of the members.

As per the paper, the benefits of loans offered on a collective basis through community organizations:

  • Strengthens community organizations;
  • Develops the capacity of the communities to express their own needs;
  • Reaches the very poorest households of the community;
  • Increases the efficiency and effectiveness of development assistance.

The paper also presents the following case studies:

  • The Indian experience focusing on grass-root functioning of savings and credit schemes;
  • The South African experience focusing on savings and credit scheme, building an infrastructure of activities including interactions with formal institutions;
  • The Thailand study focusing on intermediary financial institution developing grass roots capabilities at scale.

About this Publication

By SPARC
Published