Systems of Savings and Credit
for Development Associations of Developing Countries

Creation of a New        Use of Intermediaries     Linkage Building
Banking Institution
---------------------    ----------------------    ------------------------
      SYSTEM 1                  SYSTEM 2                  SYSTEM 3
---------------------    ----------------------    ------------------------
Development Banking      Development Banking       Development Banking
with the poor            for the poor              of and by the poor

                      C H A R A C T E R I S T I C S

The target group is The development bank is The development bank and both a participant and the participant and NGO are co-actors and/or instigator through its instigator. instigators with the own financial insti- banking system organized tutions. by the poor themselves, thus there are three co-actors. The users are also The bank remains owner Each participant remains the owners of the of its system and owner of his/her own bank and its assets. sub-systems. assets. Banking functions are The bank is the The promoting organization added to the other starting point. Its or the grass roots group daily functions which sub-systems can help itself is the starting make up group acti- the bank to really point. vities. reach the poor. The poor people The bank moves towards Grass roots groups move provide themselves the poor. towards the bank, and the with a bank. bank also towards the group. The idea of banking A new banking instrument This is first and foremost is integrated into is created by the banks; a financing operation that other activities it is not really inte- does not belong to the bank grated into other but to the people. aspects of community life.
EXAMPLES: Grameen Bank, B'desh; Syndicate Bank of India; Bank of Indonesia with Bina Self-managed village CESA of Ecuador; Agri. Swadaya; Diviseema of India. banks of Mali and Development Bank of Gambia; SEWA of India. Nepal.
Adopted from a DSE booklet.
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Hari Srinivas -
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