Credit Union Resources

Recent Publications on Credit Union Development
Compiled by Catherine Ford, World Council of Credit Unions

See also

2002 (6)

1. Barrick, Murray R. 2002. Human resource testing what credit unions should know. University of Wisconsin--Madison, WI: Filene Research Institute-Graduate School of Business.

2. Lapenu, C, and Manfred Zeller. 2002. Distribution, growth, and performance of the microfinance institutions in Africa, Asia and Latin America: a recent inventory. Savings and Development 1: 87-111.
Abstract: This paper examines the numbers of microfinance institutions (MFIs) that exist in the developing world, their location, the number of households they reach, and their current performance in terms of outreach. A detailed analysis is given on the distribution, growth and performances of MFIs that are supported by donor organizations in Africa, Asia, and Latin America. The IFPRI team on microfinance conducted a survey with international non-governmental organizations (NGOs) and networks supporting various types of MFIs in 1999. The database concerns 85 developing countries, specifically 1500 institutions (790 institutions worldwide plus 688 in Indonesia). The MFIs reach 54 million members, 44 million savers, and 17 million borrowers. The total volume of outstanding credit is $18 billion. The total savings volume is $13 billion. The analysis is conducted: for all the institutions of the sample; by type of institutions (i.e. lending technology such as solidarity groups, cooperative, village banks, etc.) and legal status (NGOs, banks, etc.); and by geographic location (i.e. rural or urban, and continent). The results presented give an overview of the current development of the MFIs and offer benchmark for comparisons.

3. Lee, Jinkook, and William A Kelly. 2002. Life cycle marketing for credit unions senior households. University of Wisconsin--Madison, WI: Filene Research Institute and the Center for Credit Union Research.

4. Meyer, Richard . 2002. The Demand for Flexible Microfinance Products: Lessons from Bangladesh. Journal of International Development 14, no. 3: 351-68.
Abstract: This paper examines literature that shows the decline in horizontal expansion of microfinance in Bangladesh. Dropouts, overlaps and delinquencies appear to be rising, many of the poor refuse to use microfinance institution products and informal sources continue to be important for poor households. In order to combat these challenges, MFIs need to re-engineer their products and policies, based on careful market research and pilot testing, and focus on quality of service rather than quantity of outreach. Possible changes in policy and products include: a) adjustment of repayment schedules, b) adjustment of loan sizes, c) differential loan pricing and d) expansion of product line. Impediments to these changes may result from any of the following: commitment to the status quo, cost and complexity of change and innovation, competition and the financial system. While the MFIs in Bangladesh have enjoyed a reputation as leaders in the microfinance industry, they now need to move into the next phase of supplying demand-driven financial services.

5. ———. 2002. Performance of Rural Financial Markets: Comparative Observations from Asia, Latin America and the US: Presentation at the Brazilian Agricultural Economics Association, July 29-31, 2002. Brazil: Brazilian Agricultural Economics Association.
Abstract: After three decades of rural financial market failure in Latin America and Asia, a renewed interest has developed. Discussion of the formation of new specialized agricultural banks neglects to consider the successes and failures of past initiatives in this area. This paper explores the existing challenges for creating sound rural finance markets to serve farmers and the rural community not serviced by microfinance. In the past, agricultural economists have focused on farmer access to financial services; terms, conditions, and institutional operation. Other research has shown how sound macrofinance policies, supportive institutions, and investments in institutional building can lower the costs and risks of rural financial intermediation. Improvements in laws, regulations, institutions, and policies in financial intermediation in Latin America must be made before rural communities will have access to self-sustainable financial services. Until these changes are made, Latin American farmers will remain at a proportional disadvantage in financial services.

6. Paxton, J. 2002. Depth of outreach and its relation to the sustainability of microfinance institutions. Savings and Development. 26, no. 1: 69-86.
Abstract: Most microfinance organizations (MFOs) strive to be financially sustainable while targeting a marginalized clientele. No consensus exists on an appropriate measure of outreach, although average loan size is the most common proxy. Within the poverty measurement literature, more emphasis is being given to composite human needs based poverty measures that include income and non-income data. This study utilizes a framework for measuring depth of outreach that includes gender, location, literacy, and income levels of clients in credit unions, banks, and non-governmental organizations (NGOs). Using data from 18 Latin American and African MFOs, the depth of outreach index is positively correlated with the institutional Subsidy Dependence Index. NGOs tend to have a deeper outreach on average while banks and credit unions have stronger financial viability. However, since credit unions and banks have a greater degree of client heterogeneity and scale, they reach a larger aggregate number of marginalized clients than most NGOs.

2001 (12)

1. Atieno, Rosemary. 2001. Formal and informal institutions' lending policies and access to credit by small-scale enterprises in Kenya: an empirical assessment. African Economic Research Consortium (AERC) ed.The Regal Press Kenya.
Abstract: The main objective of this study is to investigate and assess the role of the institutional lending policies of formal and informal credit institutions in determining the access to and use of credit facilities by small-scale entrepreneurs in rural Kenya. The results of the study show the limited use of credit reflects lack of supply, resulting from the rationing behaviour of both formal and informal lending institutions. The study concludes that given the established network of formal credit institutions, improving lending terms and conditions in favour of small-scale enterprises would provide an important avenue for facilitating their access to credit.

2. Campion, A. 2001. Mobilizing small, medium and large savings -- motivations and financial risks. Small Enterprise Development 12, no. 3: 11-19.
Abstract: This paper describes the different types of savings accounts that may be offered by microfinance institutions (MFIs), and how each account may benefit the MFI and its clients. It outlines how non-governmental organizations, converted banks, and credit unions approach savings, and the primary reasons MFIs and their clients are becoming more interested in savings products. The risks that must be managed by MFIs offering savings products are then described. It is suggested that savings mobilization can offer MFIs a more stable and cost-effective source of funding to see it through a variety of economic changes in the long term.

3. Catholic Relief Services. 2001. Project for the development of rural financial markets and of products : final report. Nicaragua: USAID Mission to Nicaragua.

4. Diagne, A, and Manfred Zeller. 2001. Access to credit and its impact on welfare in Malawi. Research-Report, No. 116 ed. Washington, DC: International Food Policy Research Institute.
Abstract: This paper analyses the determinants of access to credit and its impact on farm and non-farm income and household food security in Malawi. It is shown that the contribution of rural microfinance institutions to smallholder income can be limited, or negative if the design of the institutions and their services does not take into account the constraints and demands of their clients. A cautious and gradual strategy is recommended for the expansion of rural financial institutions. It is suggested that rural financial institutions should focus primarily on high-potential agricultural areas where they not only lend for production of an array of cash and food crops, but also offer financial services for off-farm enterprises, at low transaction costs.

5. Fries, Bob. 2001. Basic Guidelines for Effective Rural Finance Projects: The Guide to Developing Agricultural Markets & Agro-Enterprises. Washington, DC: World Bank.
Abstract: The findings and principles laid out in this paper form a basis for designing and implementing projects that expand access to financial services in rural areas, by fostering a rural financial market characterized by a conducive legal and regulatory environment where competing firms and institutions can deliver these services profitably. 
The author reviews the constraints to rural finance and presents options for overcoming these. A broad range of financial institutions and the fundamental practices central to the sustainability of these is discussed. The criteria and specific steps for designing effective programs in this field are reviewed and suggestions are offered for monitoring and evaluation. Examples of innovative programs and best practices are mentioned.

6. Gaiha, Raghav . 2001. Microcredit and the rural poor: a review of the Maharashtra rural credit project. Journal of Microfinance 3, no. 2: 125-53.
Abstract: An attempt is made to review Maharashtra Rural Credit Project (MRCP)-a microcredit scheme-by focusing on the process of implementation and implications of targeting, empowerment of women, and trade off between the coverage of the poorest and sustainability of this scheme. Attention is drawn to the deficiencies in the design and implementation of this scheme that limit the participation of the poorest and the benefits accruing them. Moreover, it is argued that there is a risk of overstating the trade-off between the coverage of the poorest and sustainability of the MRCP if these deficiencies are over-looked.

7. Lee, Jinkook, and William A Kelly. 2001. The human touch in the information age what do members want? University of Wisconsin--Madison, Wisconsin: Filene Research Institute and Center for Credit Union Research.

8. Neveu, A. 2001. The adaptation of financing systems to the level of development of different types of agriculture in the world. Le Financement Bancaire De L'Agriculture Au Debut Du Vingt Et Unieme Siecle, Seance Specialisee Du 7 Mars 2001. Comptes Rendus De L'Academie D'Agriculture De France. 87, no. 2: 103-16.
Abstract: A system for classifying the different agricultural financing systems used in different countries of the world is presented. This classification is based on four broad groups: informal systems; commercial banks; cooperative banks; and "interdependent banks" (or microfinance institutions). The structures and organization of each of these different types of banks is studied and compared, together with the financial tools they use. Informal systems include lawyers, landowners and various other lenders operating outside any defined organizational structures. Commercial banks generally have tended to have only limited dealings in the agricultural sector, and therefore have not had any need to adapt their organizational structures accordingly. Farming clients tend to be offered loans on the same conditions as other clients. Cooperative banks tend to have relatively dense networks in rural areas and their operations are aimed at helping farming clients. Loans offered by cooperative banks tend to be adapted to the constraints of agriculture, e.g. offering long repayment periods, although interest rates tend to differ very little from those of commercial banks. "Interdependent" banks are a relatively new development, with the oldest, Grameen Bank in Bangladesh, being < 20 years old. These banks are most common in developing countries, where they have been set up with the aim of providing resources to peasants and the most destitute rural areas. They tend to have a pyramid structure, with a multitude of small local agencies. Discussion also covers the impact of credit on the development of farms, and the role of the state in the distribution of agricultural credit.

9. Richardson, D. C., and Barry Lennon. 2001. Teaching Old Dogs New Tricks: The Commercialisation of Credit Unions. Washington, DC: USAID.

10. Sayles, William W. 2001. Serving members around the globe: United Nations Federal Credit Union expands operations to foreign shores. University of Wisconsin-Madison, WI: Filene Research Institute and Center for Credit Union Research.

11. Wright, G A N, and L K Mutesasira. 2001. The relative risks to the savings of poor people. Small Enterprise Development. 12, no. 3: 33-45.
Abstract: A study conducted by MicroSave-Africa, which assessed levels of losses experienced by poor people in the formal, semi-formal, and informal savings sectors, is presented. An existing extensive qualitative data set (comprising over 500 group interviews) and an additional 19 focus group discussions and participatory rapid appraisal exercises were complemented with a quantitative survey of 1500 adults in central and western Uganda. The quantitative survey revealed that 99% of clients saving in the informal sector reported that they had lost some of their savings. Of those saving in the formal sector, 15% reported that they had lost some savings and 26% reported lost savings in the semi-formal sector. The qualitative work for this study corroborated these findings. It is suggested that prohibiting microfinance institutions from accepting savings is likely to drive poor people to riskier informal alternatives, and is therefore undesirable.

12. Zeller, Manfred. 2001. Promoting institutional innovation in microfinance: replicating best practices is not enough. Development and Cooperation 1: 9-11.
Abstract: Arguments are put forward calling for a continuation of the support towards institutional innovation and bottom-up adaptation of microfinance institutions (MFIs) in developing countries. Institutional innovation in microfinance includes the adaptation of an existing institutional type to the constraints and potentials of a certain client group in a specific local environment. The five major types of microfinance institutions (MFIs) are presented. These are: the cooperative model, solidarity groups, village banks, the linkage model and microbanks with individual financial contracts. With reference to the need for institutional diversity and further investments in institutional innovation, brief data are given from a 1999 survey of NGOs relating to 1468 MFIs in 85 developing countries, with an estimated number of 45 million savers and 17 million borrowers. The data suggest that the village bank, linkage model and solidarity group reach relatively more women and poorer clients than the cooperative and microbank models. In terms of repayment rates, there were no significant differences.

2000 (13)

1. Bélanger, Guy, and Claude Genest. 2000. La Caisse populaire de Lévis, 1900-2000 lŕ oů tout a commencé. Sainte Foy, Québec: Éditions MultiMondes.

2. Christen, R P , and R Rosenberg. 2000. Regulating microfinance -- the options. Small Enterprise Development 11, no. 4: 4-23.
Abstract: The paper cautions against the 'rush to regulate' within microfinance institutions. It first outlines the practical problems faced by bank supervisors who are asked to take responsibility for MFIs, and points to the costs of supervising MFIs. The various options for regulation are discussed, and the recommendations include the following: Credit-only MFIs should generally not be subject to prudential regulation in which the government supervisory agency is expected to monitor the financial soundness of the licensed institution. Small community based MFIs should not be prohibited from deposit taking just because they are too small or remote to be regulated effectively. The push to create special regulatory windows for MFIs may make sense in a few developing countries, but in most it is probably premature right now, running too far ahead of the organic development of the local microfinance industry. Self-regulation by MFI-controlled federations is highly unlikely to be effective.

3. Lapenu, C. 2000. The role of the state in promoting microfinance institutions. Discussion-Paper -Food-Consumption-and-Nutrition-Division, no. 89 ed. Washington, DC: International-Food-Policy-Research-Institute.
Abstract: In spite of the success of numerous microfinance institutions (MFI), a large number of rural households still lack access to financial services; most of the existing MFI are not yet financially sustainable; and, while funds from governments and donors are rapidly increasing, financial institutions still need solid foundations to avoid management failures. These issues raise questions of the role of the state to promote MFI including (1) which state-owned institutions may be necessary? (2) which level and type of subsidization of the financial institutions can be accepted? (3) what can be the choice for the state between alternative investments in financial institutions or complementary services? (4) what are the necessary conditions for creating a favourable environment? This paper presents the evolution of views on the role of the state in the financial system including theoretical and empirical points of view from the interventionist period of the 1960s and 1970s to the current period of liberalization. Based on country case studies from Asia and Africa illustrating the divergent role of the state in the development of the rural financial system, the paper reviews the respective role of the state, the NGO and the private commercial banks in increasing their outreach and in adopting microfinance innovations. It also analyses different issues regarding regulation of MFI and concludes with a discussion of the necessary roles of the state to promote MFI.

4. Meagher, P, and B Wilkinson. 2000. Towards a market-friendly environment for microfinance -- legal and regulatory reform in Zambia. Small Enterprise Development 11, no. 4: 30-41.
Abstract: Microfinance institutions (MFIs) must be able to integrate into financial markets and mobilize private capital at some point in their organizational lives, and to make this possible an appropriate and flexible legislative environment is required. Currently, most microfinance providers across the world are able to operate due to selective non application of the rules, or they function inefficiently while adhering to existing laws Thus regulatory reform, far from being restrictive, enhances MFI expansion and creates a more predictable operating environment for investors and clients. Zambians recently passed new legislation for this purpose. The paper briefly reviews several categories of legislation, discussing which laws support MFI growth, which ones create obstacles to it, and what kinds of changes would be useful to liberalize the sector. Next, the reforms suggested by the legislative overview are outlined: (i) legislative changes needed immediately to legalize microfinance and to enhance responsible growth; (ii) the outline of a possible tiered system to provide all levels of microfinance operation with appropriate regulation; and (iii) complementary legal/regulatory changes needed in the long term. The process of reform in Zambia is also described, demonstrating that such reform efforts require open give-and-take between stakeholders and government, a core group of reform champions to drive the process ahead, willingness by government and the regulating agency to integrate feedback from the public into a reform package, and framing of legislation in ways that parliamentarians can understand and accept.

5. Morduch, J. 2000. The microfinance schism. World Development Oxford. 28, no. 4: 617-29.
Abstract: Leading advocates for microfinance have put forward an enticing 'win-win' proposition: microfinance institutions that follow the principles of good banking will also be those that alleviate the most poverty. This vision forms the core of widely-circulated 'best practices', but as a general proposition the vision is fully supported neither by logic nor by the available empirical evidence. Recognizing the limits to the win-win proposition is an important step toward reaching a more constructive dialogue between microfinance advocates that privilege financial development and those that privilege social impacts. The paper briefly illustrates its argument with a variety of well-known developing country examples.

6. National Credit Union Administration. 2000. Your insured funds. Alexandria, VA: National Credit Union Administration.

7. Norsworthy, L. A. 2000. Rural Development, Natural Resources and the Environment: Lessons of experience in Eastern Europe and Central America. Washington, DC: IBRD.

8. Poulin, Pierre, Pierre Goulet, and Andrée Rivard. 2000? Desjardins, 100 ans d'histoire. Sainte-Foy, Québec: Éditions MultiMondes.

9. Richardson, D. C. 2000. Unorthodox microfinance: the seven doctrines of success. Microbanking Bulletin ed.Calmeadow.
Abstract: Argues for a radical reform of the orthodox approach of using financial services to achieve poverty alleviation. prospect of a competitive market with different institutional players. Many credit unions are skeptical of conventional microfinance lore. Many are now focusing on commercial viability rather than on outreach.
Author offers seven doctrines for achieving poverty alleviation targets: a) Open Door Massification: serving a wider range of economic groups leads to better outreach, b) Micro-savings: MFI is less dependent on external funding and has higher liquidity for on-lending, c) Portfolio diversification: diversifying into work, housing, health, education, transport and security products. The MFI avoids risk of economic downturns in a single sector, d) Efficiency: better productivity helps MFIs compete with down-sizing commercial banks. Larger loans should contribute more to payment of fixed costs. Salary and incentive structures for staff should be re-evaluated, e) Financial discipline: better management of delinquency, loan-loss reserves, loan charge-offs, and reserves of capital and liquidity, f) Self governance: empowerment, matched by checks and balances of economic incentives, financial discipline and systematic vigilance, and g) Assimilation: poor people should be assimilated into the mainstream economy by providing them with access to comparable financial products and services.

10. Schrieder, Gertrud, and Insa Theesfeld. 2000. Improving bankability of small farmers in northern Vietnam. Savings and Development 24, no. 4: 385-403.

11. Server Izquierdo, R, and A Melian Navarro. 2000. Credit Union and credit sections. Corporate strategies and socioeconomic features. Revista Espanola De Estudios Agrosociales y Pesqueros., no. 188: 187-203.
Abstract: This paper contains an analysis of credit unions at the European level and in the Spanish case. It also contains a reflection on the circumstances underlying the present situation of the agricultural cooperative credit sections, as well as on the future strategies that have been developed to face up to the competitive setting of the 21st century.

12. Westley, Glenn D, and Brian Branch. 2000. Safe money building effective credit unions in Latin America. Washington, D.C: Inter-American Development Bank and the World Council of Credit Unions.

13. Zeller, Manfred, C Lapenu, B Minten, E Ralison, D Randrianaivo, and C Randrianarisoa. 2000. Pathways of rural development in Madagascar: an empirical investigation of the critical triangle of environmental sustainability, economic growth, and poverty alleviation. Discussion Paper Food Consumption and Nutrition Division, No. 82 ed. Washington, DC: International Food Policy Research Institute.
Abstract: This paper provides a descriptive analysis of changes in rural development in Madagascar and presents results from an econometric model of the determinants and interdependencies between the three components of sustainable development: economic growth, environmental sustainability and poverty alleviation. The study is based on community-level data from 188 villages in rural Madagascar. A survey conducted in 1997 made extensive use of long-term recall questions ascertaining changes during the past 10 years in rice yields, wages, population, soil fertility, and other pertinent variables of rural development. It is found that, on average for all villages, yields of irrigated rice, the major food crop, and real agricultural wages declined, while the communities expanded their upland area by nearly a quarter and experienced deteriorating fertility of upland soils. However, the five agroecological regions in the sample exhibit quite different patterns of rural development, and at least one of them has experienced increases in yields and wages. A two-stage, least squares fixed-effect model is developed that attempts to explain rice yields, rural migration and wages, endogenous placement of microfinance institutions, and the observed change in upland and soil fertility, with exogenous and policy variables, such as the communities' social capital, their exposure to weather risks and their access to commodity and financial markets and to public services. The paper concludes with a number of implications for policy and future research.

1999 (13)

1. Bablis, FG. 1999. The lessons and potential for sustainability and outreach of microfinance institutions in Papua New Guinea and other Pacific Island countries. Papua New Guinean Perspectives Development Bulletin October: 19-21.
Abstract: The paper highlights a few strategic constraints, suggestions for improvement, and lessons to meet the challenge of providing microfinancial services to the 70%-80% of Papua New Guinea's approximately four million and other Pacific island countries' two million low income populations into the next millennium. Issues discussed are: framework of analysis; the need for microfinance institutions (MFIs); and major constraints (poor accessibility; limited women's involvement; government involvement; lack of capacity; and rapid expansion). It is concluded that the paper provides an indication of the strategic value and potential of MFIs like the Grameen Bank to halt the trend to real poverty and to contribute meaningfully to economic and human development in Papua New Guinea and other Pacific island countries.

2. Chirwa, EW, PM Mvula, L Namata, and EK Zgovu. 1999. Capacity constraints, management and effectiveness of poverty-oriented microfinance institutions in Malawi. Savings and Development. 21-48.
Abstract: In response to the problem of poverty-related accessibility to production factors and credit facilities in the formal financial system, there are many institutions that provide credit facilities to the poor in Malawi. Most of the institutions received seed capital from the Government under the Social Dimensions of Adjustment (SDA) project and other donor agencies to implement their microfinance projects. The paper reviews the effectiveness of six institutions that received grants from the Social Dimensions of Adjustment project. The analysis in this study reveals that most institutions have serious capacity constraints in terms of human resources, physical resources and financial resources that hamper effective delivery of services to the poor on a sustainable basis. The paper observes that capacity issues are not given due consideration at planning, implementation and expansion stages of the credit programmes, and this results in poor performance of credit programmes and poor delivery of services to the poor.

3. Hoel, Robert F, and William A Kelly. 1999. Why many small credit unions are thriving. University of Wisconsin--Madison, Madison, WI : Filene Research Institute and the Center for Credit Union Research.

4. Hulme, David. 1999. Impact Assessment Methodologies for Microfinance: Theory, Experience and Better Practice. Manchester: Institute for Development Policy and Management (IDPM).
Abstract: Microfinance programs and institutions are increasingly important in development strategies but knowledge about their impacts is partial and contested. This paper reviews the methodological options for the impact assessment (IA) of microfinance. Following a discussion of the varying objectives of IA it examines the choice of conceptual frameworks and presents three paradigms of impact assessment: the scientific method, the humanities tradition and participatory learning and action (PLA). Key issues and lessons in the practice of microfinance IAs are then explored and it is argued that the central issue in IA design is how to combine different methodological approaches so that a 'fit' is achieved between IA objectives, program context and the constraints of IA costs, human resources and timing. The conclusion argues for a greater focus on internal impact monitoring by microfinance institutions.

5. Jonakin, J, and LJ Enriquez. 1999. The non-traditional financial sector in Nicaragua: a response to rural credit market exclusion. Development Policy Review. 17, no. 2: 141-69.
Abstract: The paper appraises the extent to which the newly constituted private financial sector has attempted to relieve the credit constraints customarily faced by small-scale, low-wealth farm producers in Nicaragua. It is noted that after 1990, a non-traditional financial sector (NTFS), operating through NGOs and composed of various credit unions and cooperatives, expanded alongside the private commercial banking sector. The NTFS offered itself to low-wealth borrowers as an alternative to both state and traditional private banks. The central question, developed in the paper, is whether the NTFS, augmented by the residual efforts of the National Development Bank (BANADES), has the internal structure, support and scope both to sustain itself and to ease the credit constraints and inefficiencies that emanate from traditional financial institutions. The paper also assesses the broader, and often contradictory, nature of Nicaragua's economic reform process, taking the financial structure inherited from the 1980s as the point of departure. For their part, the institutions which comprise the NTFS, while demonstrating adaptability and growth, remain seriously limited regarding the number and size of individual loans. Their continued and heavy reliance on external funding has overshadowed their own efforts to promote domestic savings mobilization and lower costs, thereby raising questions about their long-run viability.

6. Lee, Jinkook, and William A Kelly. 1999. Who uses credit unions? University of Wisconsin--Madison, Madison, WI: Filene Research Institute and the Center for Credit Union Research.

7. MacPherson, Ian. 1999. Hands around the globe a history of the international credit union movement and the role and development of World Council of Credit Unions, Inc. Victoria, BC and Madison, Wis.: Horsdal & Schubart. World Council of Credit Unions.

8. Marr, Ana. 1999. The Poor and their Money: what have we learned? ODI Poverty Brief ed.Overseas Development Institute .
Abstract: Money markets ought to allocate finance where it is most needed, and thus contribute to greater productivity, employment and the reduction of poverty. Yet in practice they have not performed this function at all well. Vast segments of the population are still unserved, inappropriate financial services are offered and inflexible contracts are extended. Poor farmers and small businesses are generally excluded from conventional financial institutions like the big commercial banks, and have to resort to informal ways of saving, insuring and borrowing, such as paying shopkeepers to keep their savings safely, or borrowing from moneylenders at very high interest rates. What then are the obstacles to better access by the poor to finance in these markets and how can governments and aid agencies intervene to improve matters?

9. Mosley, Paul. 1999. Micro-macro linkages in financial markets: The impact of financial liberalisation on access to rural credit in four African countries. Manchester, UK: Institute of Development Policy Management .
Abstract: Almost every programme of economic reform contains a financial liberalisation component; but little work has been done to assess the effects of financial liberalisation on access to credit in individual markets. Paper presents a model of this linkage, which predicts that conventional financial de-repression will have no significant effect on the price and availability of credit in the informal sector, but that financial innovation in the informal sector will affect such availability considerably. Tests this proposition specifically against data for the period of financial reform in four African countries: Uganda, Kenya, Malawi and Lesotho. Such reforms had significant effects on interest rates, but except in Uganda these effects did not feed through into an increase in savings rates or in access to rural credit. Such access was, however, favourably influenced by institutional innovation on the supply side of the market for small-business and small-farm credit. Likewise, in two of the case-study countries - Malawi and Uganda - financial de-repression had insignificant effects on poverty and privatisation of the bottom end of the credit market on its own had disastrous effects, but expansion of the supply of smallholder credit had a highly positive poverty-reduction effect.

10. OECD. 1999. Agricultural Finance and Credit Infrastructure in Transition Economies: Proceedings of OECD Expert Meeting, Moscow, Feb. 1999. Paris: OECD.

11. Tillette de Mautort, A. 1999. Mozambique: Options to Support Grain Marketing Credit.Food security in Malawi and Mozambique.
Abstract: As part of its Food Security Programme in Mozambique the European Commission (EC) has programmed a marketing credit facility which is intended to facilitate the marketing of agricultural produce. This paper explores two financial options: a)? a credit line to enable traders to purchase additional quantities of produce; b)?a guarantee facility accessible to lending institutions in the event of traders defaulting on marketing loans. The paper identifies the target group and risks faced by lending institutions before examining in detail the practicalities of the financial options. The paper includes a case study developed to demonstrate the impact of factors like interest rate and loan defaulting on the sustainability of the credit line in the absence of subsidies. It also assesses the number of beneficiaries that could benefit from it. This is compared with a similar (although not as detailed) model of a guarantee scheme.
The paper concludes that under the present circumstances a comparison between a marketing credit line and a credit guarantee fund comes down in favour of the credit line for the following main reasons: a) a marketing credit line could be put in place more quickly than a guarantee scheme; b) the functioning of a credit line is more easily understood institutionally and by borrowers; c) lending institutions are likely to be more diligent in making and recovering loans under a credit line; d) a guarantee scheme adds yet another set of procedures to be completed before a loan can be approved, resulting in delays.

12. Van Greuning, Hennie, Joselito Gallardo, and Bikki Randhawa. 1999. A Framework for Regulating Microfinance Institutions.Financial Sector Development Department-World Bank.
Abstract: Is there a need to regulate microfinance institutions? If so, what activities should be regulated? Who should regulate them? And what issues are fundamental to the sector's regulation? The continuum of institutions providing microfinance cannot develop fully without a regulatory environment conducive to their growth. Without such an environment, fragmentation and segmentation will continue to inhibit the institutional transformation of microfinance institutions. Van Greuning, Gallardo, and Randhawa recommend a tiered approach to external regulation, one that takes into account the different types of microfinance institutions, the products they offer, and the markets they service. A tiered approach can be useful in designing regulatory standards that recognize the basic differences in structure of capital, funding, and risks faced by different kinds of microfinance institutions. The model they develop for a regulatory framework identifies thresholds of financial intermediation activities, thresholds that trigger the requirement that an institution satisfy external or mandatory regulatory guidelines. It focuses on risk-taking activities that must be managed and regulated.
They illustrate the usefulness of the model by practically applying prudential considerations to various categories and values of financial risk for each of three broad categories of microfinance institution.
A transparent, inclusive framework for regulation will preserve the market specialties of different types of microfinance institutions-and will promote their ultimate integration into the formal financial system. One example of the kind of regulation the authors recommend: Require standard registration documents and procedures-no different from those required of regular corporations-including the designation of a central government agency with which they should register as corporate entities.

13. Zappacosta, M. 1999. The microfinance institutions as a tool for rural development: characteristics, potential and limitations. Questione Agraria 76: 165-80.
Abstract: Since the early 1990s, the approach of international development agencies to rural finance in developing countries has seen a gradual change from the traditional forms of subsidized credit to the establishment of sound local financial systems. The microfinance institutions seem to be playing an important role in improving the small farmers' access to financial services. The aim of this paper is to analyse the structural characteristics, potential and limitations of these institutions as a tool for rural development. Special attention is given to the economic policy measures needed to improve their efficacy in terms of poverty reduction.

1998 (9)

1. Center for Professional Development - CUNA. 1998. People, Not Profit: The Story of the Credit Union Movement. Iowa: Kendall/Hunt Publishing Company.

2. CGAP, and GTZ. 1998. Savings Mobilization Strategies: Lessons From Four Experiences. Washington, DC: Consultative Group to Assist the Poorest (CGAP).
Abstract: Around the world, poor households save in various forms and for various purposes. Although empirical evidence suggests that the poor would deposit if appropriate financial institutions and savings facilities were available, little progress has been made to establish MFIs as full-fledged financial intermediaries. In fact, today most micro-finance institutions (MFIs) offer only credit, and savings mobilization remains the forgotten half of micro-finance. The CGAP Working Group on Savings, formed in 1996 and chaired by GTZ (representing Germany), has recently completed case studies of four deposit-taking MFIs and a related comparative paper. This note represents a synopsis of these studies.

3. Mosley, Paul, and David Hulme. 1998. Microenterprise finance: is there a conflict between growth and poverty alleviation? World Development Oxford 26, no. 5: 783-90.
Abstract: The results of a research project are presented which estimated the impact of 13 microfinance institutions in seven developing countries on poverty and other target variables, and related such impact to the institutions' design features. For each of the institutions studied, the impact of lending on the recipient household's income tended to increase, at a decreasing rate, as the recipient's income and asset position improved, a relationship explained in terms of the greater preference of the poor for consumption loans, their greater vulnerability to asset sales forced by adverse income shocks and their limited range of investment opportunities. This relationship, defines, in the short term, an 'impact frontier' which serves as a tradeoff: lenders can either focus their lending on the poorest and accept a relatively low total impact on household income, or alternatively focus on the not-so-poor and achieve a higher impact. For many lender institutions the tradeoff can often be moved by appropriate innovations in institutional design, in particular modifications to savings, loan collection, and incentive arrangements for borrowers and staff. The 13 institutions are: Bolivia BancoSol; Indonesia BRI unit desa; Indonesia BKK; Indonesia KURK; Bangladesh Grameen Bank; Bangladesh BRAC; Bangladesh TRDEP; Sri Lanka PTCCs; Kenya KREP Juhudi; India RRBs; Kenya KIE-ISP; Malawi Mudzi Fund; Malawi SACA.

4. Muluh, GA. 1998. Meeting small farm sector credit needs: a study of formal and informal credit markets in Cameroon. Quarterly Journal of International Agriculture. 37, no. 3: 201-21.
Abstract: This study examines the nature of small farmer credit needs and ability of formal and informal financial institutions to supply those needs. Data were collected in the North West Province of Cameroon. Information was obtained from a sample of eight credit unions (formal financial institutions), six Njangis (informal financial institutions), 52 farmers borrowing from credit unions, and 55 farmers borrowing from Njangis. The organizational and operational procedures of both institutions were studied to ascertain their effectiveness in meeting credit needs. Multiple regression analysis was used to determine the variables responsible for variations in the amount of credit applied for by small farmers. The study shows that both institutions are well suited to meeting small farmer credit needs. Informal financial institutions excel more in terms of convenience, promptness and coverage and have wider outreach than credit unions. Both institutions are seen to finance mostly fortuitous and consumption needs because of a weak demand for agricultural purposes as a result of inadequate marketing services. The informal sector is sometimes overloaded in meeting credit needs due to limited funds while credit unions are in possession of more funds than they disburse loans. It is suggested that a legal framework for informal finance is needed, and linking informal to formal finance is recommended so that funds can flow from surplus to deficit units. Also, marketing services should be improved so that funds mobilized could be used for investments in agriculture to improve rural incomes.

5. National Credit Union Administration. 1998. Your insured funds. Alexandria, VA: National Credit Union Administration.

6. SBP- World Bank. 1998. FINCA: Insights from a unique approach to village banking [in Costa Rica].World Bank.
Abstract: FINCA Costa Rica has been both a leader and a non-conformist in village banking. As one of the first village banking examples in Latin America, the program offers valuable lessons to other village banking institutions. While still retaining the FINCA name, FINCA Costa Rica has split from FINCA International, the US-based NGO that is credited with developing the village banking methodology. Some of the unique features of FINCA Costa Rica include: a minimalist approach to microfinance, a predominantly male, literate, agriculturally based target group, individual loans, a legal ownership structure of each village bank with voting based on percentage ownership of equity shares, relatively larger and longer loans, and legal penalties for default. The program leadership has shown a great willingness to adapt the methodology as problems have surfaced over the years. Given FINCA Costa Rica's history and willingness to adapt, it offers unique insights into the problems and potential of village banking. The following paper presents an overview of FINCA Costa Rica1 and examines ten lessons that can be learned from FINCA's unique approach to village banking.

7. Seibel, HD, HD Pant, and Dhungel Dipak. 1998. Microfinance in Nepal. Savings and Development. 22, no. 3: 305-29.
Abstract: This paper reports on the UNDP-supported project on Microfinance for the Poor in Asia-Pacific, focusing on Nepal. Six microfinance institutions (MFIs) selected as indicative case studies were analysed in terms of outreach to the poor, viability and financial self-reliance, substituting donor funds for internal resources. These comprised: two pioneering Grameen bank replicators (Purbanchal Grameen Bikas Bank and Nirdhan); two out of 49 NGOs sponsored through the governmental Rural Self Reliance Fund; and two out of 233 cooperatives engaged in microfinance. The NGOs were seen to perform reasonably well in financial terms but their outreach was insignificant. The cooperatives did well in financial and outreach terms. During the 1990s the Government of Nepal has provided a policy framework permitting MFIs to select an appropriate legal framework, mobilize internal resources, differentiate their products, expand their market, offer adequate interest rates, and be profitable.

8. Seibel, HD, U Parhusip, and S Sinha. 1998. Attaining outreach with sustainability: a case study of a private micro-finance institution in Indonesia. Micro Credit: Impact, Targeting and Sustainability. IDS Bulletin. 29, no. 4: 81-90.
Abstract: It is noted that financial and economic deregulation in Indonesia since 1983 has encouraged the growth of microfinance institutions (MFIs). Combined with sustained economic growth, this has resulted in drastic reductions in poverty. The paper analyses the performance of Bank Shinta Daya, a private rural bank in Java, in terms of outreach to the poor and non-poor, financial viability and sustainability, resource mobilization, and sound (best) micro-finance practices. Bank Shinta Daya combines individual and group-lending technologies. The experience indicates that the latter cover their costs and greatly increase the bank's outreach to the poor as a new market segment, but initially add little to the bank's overall profitability. The case study shows how viability and sustainability can be attained in banking with the poor and the non-poor to conclude that only financially viable institutions can sustainably reach the poor in significant numbers.

9. Zeller, Manfred, and Manohar Sharma. 1998. Rural Finance and Poverty Alleviation. Food Policy Report ed. Washington, DC: International Food Policy Research Institute.
Abstract: Presents information on the credit constraints that poor rural households face, derived from detailed rural household surveys conducted by IFPRI and its collaborators in nine countries of Asia and Africa (Bangladesh, Cameroon, China, Egypt, Ghana, Madagascar, Malawi, Nepal, and Pakistan). It uses this information to make the case for appropriate public intervention in strengthening rural financial markets and draws conclusions about areas where public resources may best be spent. It describes how informal, often indigenous institutional arrangements from savings clubs and lending networks to small retail shops and input dealers have succeeded in tailoring savings, credit, and insurance services to the poor. What enables informal institutions to provide sustainable financial services that banks and cooperatives in the formal sector institutions, with few exceptions, fail to provide? What are their strengths and weaknesses? What lessons can formal sector institutions draw from them? The report argues that the basic problem lies in institutional arrangements, summarily transplanted from urban-based formal banking systems that have high transaction costs for lenders and borrowers alike. For the lender, these costs are incurred in screening large numbers of borrowers, monitoring and enforcing unsecured loan contracts, and managing tiny savings deposits. For the borrower, these costs take the form of time and other resources spent securing loans or making deposits, or in appropriate deposit or loan terms. Finally, the report looks at examples of recent institutional innovations that overcome some of these obstacles. It concludes that just as there is a role for the public sector to develop or support science based technologies, concerted public action is also needed to create an enabling environment in which institutional innovation is encouraged and given more room to spread. Governments, donors, banking practitioners, non governmental organizations, and research institutions must work together closely to pinpoint the costs, benefits, and future potential of emerging rural financial institutions.

1997 (8)

1. Ferguson, Charles, and Donal McKillop. 1997. The Strategic Development of Credit Unions. New York: John Wiley & Sons.

2. Lévesque, Benoît, and Marie Bouchard. 1997. Desjardins une entreprise et un mouvement? Les Leaders Du Québec Contemporain. Sainte-Foy, Québec: Presses de l'Université du Québec.

3. Llanto, GM. 1997. Microfinance institutions in poverty alleviation: a case of the blind leading the blind. Development Research News 15 , no. 1: 2-5.
Abstract: An examination is presented of the fact that the solution of the poverty problem rests on more fundamental issues than just the provision of micro-financing institutes (MFIs) alone. Factors preventing MFIs, especially credit NGOs, from reaching a greater number of the target clientele in an effective and efficient manner are enumerated and elaborated: the principal problem is lack of legal personnel and authority to act as real financial intermediaries; there is a lack of an extensive and viable financial delivery system that has a substantial focus on the poor; another problem relates to the training of potential clients. It stresses the need to supervise and regulate credit NGOs. Without such a regulatory framework the following problems will persist: (1) absence of performance standards; (2) lack of uniformity and dilution of standards of credit evaluation; (3) lack of portfolio supervision leading to poor loan recovery and determination of quality. Wide ranging recommendations are made about the diversification, optimization, rationalization and investment procedures within credit NGOs as well as the importance of training and improvement of systems. It argues that in the short run MFIs may be able to expand their present reach because of donations and other subsidies, but unless they become viable and sustainable, the effort will not be maintained.

4. Mesbah, Dina, Connie Dey-Marcos, and World Council of Credit Unions. 1997. The role of credit unions in Ecuadoran financial markets a case study of 11 credit unions. Research Monograph Series / World Council of Credit Unions. Madison, Wis., U.S.A: World Council of Credit Unions.

5. Pal, MS. 1997. Replicating the Grameen Bank in Burkina Faso. Small Enterprise Development. 8, no. 1: 16-22.
Abstract: The article describes Credit with Education, a modified Grameen Bank model implemented in Burkina Faso by an NGO from the USA, Freedom from Hunger. The institutional set-up is examined, whereby the Credit with Education programme has fitted in to a pre-existing system of credit unions (caisses populaires) and smaller village banks (caisses villageoises), which have supplied the funds to the groups of women borrowers. Among the factors contributing to the success of the programme and its high repayment rate is the previous involvement of a large number of the women in traditional rotating savings and credit associations (ROSCAs or tontines).

6. United States Dept. of the Treasury. 1997. Credit unions. Washington, DC: United States Dept. of the Treasury.

7. Whiteside, Martin. 1997. Botswana: encouraging sustainable family sector agriculture.CORDE, Environment and Development Consultancy Ltd for DFID .
Abstract: Paper concentrates on services and policies needed to support sustainable family sector agriculture in the east of Botswana where the majority of the population and the largest number of resource poor people are concentrated. It does not attempt to look in detail at the needs of the 'Remote Area Dwellers’ although they experience extreme poverty, as this is a specific subject area. Nor does it look at some of the higher potential areas such as Pandamatenga, which, although potentially important in production terms, involve a relatively small number of households. This report is structured around the three interlocking conditions considered necessary for sustainable agriculture.

8. Yaron, Jacob, McDonald Benjamin, and Gerda L. Piprek. 1997. Best Practices: Three Success Stories. Rural Finance Issues, Design and Best Practices., 117-37. Washington, D.C.: IBRD- World Bank.
Abstract: This chapter examines the management practices and modes of operation underlying the success of three rural financial institutions (RFI). The Bank for Agriculture and Agricultural Cooperatives (BAAC), Thailand, the Village Banks (Unit Desas BRI-UD) of Bank Rakyat Indonesia(BRI), and the Grameen Bank (GB) in Bangladesh, have all proven successful in achieving their core objectives of outreach and self-sustainability. Even though each of the three institutions differs in many ways, all have consistently practiced the same basic principles. And although BAAC, the BRI-UD, and the GB are not the only successful RFIs, there is substantial information accessible about their particular successes. Also, all three of these institutions are important to both the rural and national financial sectors. In examining the external factors that contributed to the success of these three RFIs, association may be brought to the complimentary macroeconomics conditions for which they functioned, still they each faced their own limitations and constraints in the implementation of new policies and operating methods. And although the guiding principles of these institutions should be explored, careful measures must be taken in adapting these operations and consideration must be kept in regards to the context of each RFI’s individual objective and clientele. A solution that is successful in one environment may not adapt well in another.

1996 (8)

1. Albee, A, C Sweetman, and C Sweetman. 1996. Beyond 'banking for the poor': credit mechanisms and women's empowerment. Women Employment and Exclusion: 48-53.
Abstract: An evaluation is presented of credit and its key focus in development strategies, and the empowerment of women. Issues associated with a variety of credit mechanisms are reviewed: bank guarantee schemes, government credit schemes, intermediary projects, direct lending projects, 'banks for the poor', credit unions and village-based banks. The conclusion focuses on some cautionary notes, in particular whether credit projects are creating a debt trap.

2. Ayaya, O. 1996. An appraisal of the status of savings management through cooperative credit unions in Lesotho. Development Southern Africa 13, no. 4: 581-99.
Abstract: The findings of the study are based on credit-supply operations of cooperative credit unions in ten administrative districts of Lesotho for the period 1982-92. The credit-extension activities of the cooperative credit unions are appraised by statistically analysing the loans these institutions have extended to their members over the study period. The response of loans granted to members' share deposits, outstanding loans, selected macroeconomic variables, number of credit unions, membership and value of assets was also statistically appraised. The results displayed a significant correlation between loans granted to members, their share deposits, the number of cooperative credit unions, membership, value of assets and outstanding loan balance. At the macroeconomic level, loans granted to members in any given year showed a significant correlation with the interest rate on savings, GNP per caput, salary remittances from migrant workers, and the prime lending interest rate of commercial banks. The amount of loans granted was found to be elastic to changes in GNP per capita, salary remittances from migrant workers, government budget deficit or surplus, commercial bank lending, share deposits by cooperators, value of assets held by credit unions, and unpaid loan balance.

3. Barham, BL, S Boucher, and MR Carter. 1996. Credit constraints, credit unions, and small-scale producers in Guatemala. World Development Oxford 24, no. 5: 793-806.
Abstract: Efficient and equitable development outcomes may depend, in part, on whether formal financial institutions leave low-wealth producers tightly constrained in their access to credit. Issues associated with whether cooperative institutions can efficiently relax these constraints are explored, using survey data gathered from 950 small-scale producer households in areas of Guatemala with market-oriented credit unions that mobilize savings and make un-subsidized loans. Nonprice rationing by banks is found to be common among lower wealth households, while credit unions relax credit constraints for a significant portion of those rationed by banks, but not the poorest of the study households.

4. Butler, A. 1996. Rural credit unions in mid Wales. Working Paper, no. 2 ed. Welsh Institute of Rural Studies.
Abstract: Credit unions are financial cooperatives that enable better-off people as well as the less affluent to save and have access to low-cost loans. The poor may benefit from the savings regime and the low cost of loans as compared to banks, mail order and possible loan sharks, whereas the rich can include credit union savings as part of their portfolio, in conjunction with traditional financial institutions. This essay is an introduction into the nature of credit unions and the contribution they may make to local development, and particular issues that need to be addressed if rural-based credit unions are to succeed. In mid Wales the first rural credit union was recently registered in Newtown, Powys: although credit unions in other part of the UK have included rural districts they are normally urban-based. The question addressed is whether credit unions in rural areas can generate the support necessary for their successful growth and survival, where deprivation and cultural identity are complex. It is concluded that if credit unions can bridge cultural and social differences between rural people in the Welsh countryside, economic and social benefits could be enhanced, however they should not be seen as a panacea and should be promoted as part of an integrated rural development strategy.

5. Cruz, I, FR Braojos, and M Zuvire. 1996. Peasant credit unions in relation to Mexican neo-liberalism. Tiers Monde 37, no. 145: 173-86.
Abstract: Mexico has been experiencing radical social, economic and political change, and the transition from a largely state controlled economy to a market economy. Within this context a project is examined which aims to encourage and facilitate peasant farmer self management through the construction of a national network of peasant credit unions. At present about 35 000 peasant farmers belong to one of the unions, which mainly finance subsistence crop production, but in some instances also cash crops such as coffee and tropical fruit. The network began to emerge in the 1980s and a study is made of its development, structure, function, financial problems and future prospects.

6. Fidler, P, and L ed. Webster. 1996. The informal sector and microfinance institutions in West Africa.
Abstract: The results of a study examining the informal sectors of 12 countries in West Africa are presented. A number of microfinance institutions in these countries are evaluated. Studies are presented from: Burkina Faso; Cape Verde; Chad; Gambia; Guinea; Guinea-Bissau; Mali; Mauritania; Niger; Sao Tome and Principe; and Sierra Leone. Part one contains four overview chapters which: summarize information from the country studies to produce a profile of informal sectors in the region; examine the effective delivery of credit and savings services to the poor; present an overview of nine case studies of selected microfinance institutions in the region; and discuss the implications of the study for future World Bank policy. Part two presents the 12 country studies and part three contains appraisals of the nine microfinance institutions that are evaluated.

7. Goetz, A., and R. Gupta. 1996. Who takes the credit?: gender, power and control over loan use in rural credit programs in Bangladesh. World Development 24, no. 1: 45-63.
Abstract: Explores special credit programmes in Bangladesh from a gender perspective. States that credit institutions have dramatically increased the credit available to poor rural women since the mid-1980s. However, though they are intended to contribute to women’s empowerment, few evaluations of loan use investigate whether women actually control this credit. Considers whether women’s continued high demand for loans and their manifest high propensity to repay is often taken as a proxy indicator for control and empowerment. This assumption is challenged by exploring variations in the degree to which women borrowers control their loans directly, using recent research findings which reveals that a significant proportion of women’s loans are controlled by male relatives. Concludes that a preoccupation with “credit performance” ( measured primarily in terms of high repayment rate) affects the incentives of fieldworkers dispensing and recovering credit and may out-weigh concerns to ensure that women develop meaningful control over their investment activities.

8. Mutua, K ed., P ed. Nataradol, M ed. Otero, and BR Chung. 1996. The view from the field: perspectives from managers of microfinance institutions. Journal of International Development. 8, no. 2: 179-93.
Abstract: By examining three different institutional frameworks and performances, the paper portrays the challenges and potential for microfinance programmes to solve some of the key constraints in the field today. Tracing the growth of BancSol, a new and private Bolivian commercial bank dedicated almost exclusively to microenterprise, many lessons about about the institutional development of profitable micro-lending organizations emerge. The Kenyan Rural Enterprise Programme provides evidence of the complementary roles technical assistance and other NGO services play in the strengthening of both microfinance and microenterprise programmes. Finally the long history and diverse lending programmes of Thailand's Bank for Agriculture and Agricultural Cooperatives draw lessons in criteria and methods of effective financial intermediation. Elements of success and differences among the cases are highlighted.

1995 (1)

1. Schrieder, Gertrud, and Franz Heidhues. 1995. Reaching the Poor through Financial Innovations. Quarterly Journal of International Agriculture 34, no. 2.
Abstract: The financial systems of developing countries are quite heterogeneous and have undergone substantial changes over the past two decades. The lessons learned from past formal financial market failures, the thriving of the informal market, the need to adapt to the general decline in foreign capital inflows, and the rapid changes in financial technology and banking praxis is leading most developing countries to reshape their financial market development approach. This paper discusses modifications in financial technology and banking praxis, referred to as financial innovations. Financial innovations are crucial in the economic development process. They can reduce the intermediaries' and the clients' transaction costs and as a result bring about widening, deepening and integration of financial markets. This process thereby accelerates economic growth by stimulating savings, investment and production. Despite the well perceived positive effects of financial innovations on economic development, the wide range of financial innovations that are anchored around different levels of the financial intermediation process (financial system, institution, processing, product) have neither been well defined nor classified in development economics. Nevertheless, there has been wide use of the term financial innovation. This paper attempts to clarify the innovation debate in development economics. It first defines and categorizes the diverse types of financial innovations and then discusses their impact on the rural financial markets' effectiveness to alleviate poverty.

1994 (1)

1. Ghate, PB, and FJA Bouman. 1994. Lending to micro enterprises through NGOs in the Philippines. Financial-landscapes-reconstructed:-the-fine-art-of-mapping-development. Editors FJA Bouman, and O Hospes, 125-41. Colorado: Westview Press.
Abstract: The paper deals with NGO programmes of lending to micro enterprises in the Philippines. It contains four sections: a brief background on the programmes themselves, the premises underlying them, questions of sustainability, and some research priorities. The programmes discussed represent a major attempt in the Philippines to reconstruct the nature of the financial landscapes by using NGOs and people's organizations as intermediaries to make a major dent on poverty by lending to micro enterprises. The term 'micro-enterprise programme' refers to the promotion of small self-employment activities through the provision of credit, training and other inputs. Two types of approaches are described in the paper: the first concentrates on qualitative change of a limited number of enterprises, offering them a comprehensive range of services. The second refers to so-called 'minimalist programmes', and is directed at expansion of a large number of enterprises through the provision of services. NGOs and people's organizations such as cooperatives and credit unions are usually regarded as semi-formal. Although regulated in certain aspects they retain the essential informality of the informal sector. Thus the programmes discussed in the paper can be viewed as an attempt to develop and use the semi-formal sector to fill a void left not only by the formal, but also by the informal sector, which practises its own form of credit rationing. To the extent that the informal sector does lend to micro enterprises, these programmes can also be viewed as an attempt to improve the terms of such lending, by providing stronger competition to the informal sector.

1993 (1)

1. Potivongsajarn, ZC, JE ed. Bayley, E Parnell, and W Hurp. 1993. Women and cooperatives in Asia. Yearbook of Co Operative Enterprise 1993. 173-78.
Abstract: Women in Asia are active in most types of cooperatives, but they have not been represented in the elected bodies and management strata of the movement in numbers proportionate to their contributions. As a result, the cooperative movement has lost the benefit of additional human resources which women cooperators could provide in the successful promotion of social and economic objectives. Women are acknowledged to be better savers but do not seem to have as much access to loans. There are not many women in cooperative leadership because of their lack of awareness and education, their lack of confidence, cultural as well as legal constraints, and women's disadvantaged position in the economy. In 1988 the Credit Union League of Thailand (CULT) started its women in a cooperative development programme, a major component of which is leadership training. Results from a survey of women who had attended leadership training are highlighted and provide a profile of the Thai credit union's emerging female leadership. Most of these women live in rural areas. As they assume leadership roles, women are facing personal difficulties in relationships at home, in the cooperative and in society at large. Gender roles are changing in Thailand as they are elsewhere in Asia, but these transitions, inevitable as they may be, are not coming about painlessly. At its last annual general meeting in May 1992, CULT elected its first women president, a first for any national credit union organization in Asia. This would have been unlikely a couple of years ago, but attitudinal changes resulting from institutional efforts to bring about more gender equality have made it possible for a women leader to be so elected and accepted.

1992 (5)

1. Pokharel, N. 1992. National federation of saving and credit unions - Nepal. Partners-in-rural-poverty-alleviation:-NGO-cooperation., 148-52. National federation of saving and credit unions - Nepal.
Abstract: This paper opens with a brief review of the nature of poverty in Nepal; the type and focus of NGOs and government policy with regard to their regulation. The focus of the paper is on NAFSCUN (National Federation of Savings and Credit Union). NAFSCUN is a cooperative based organization, whose aim is to provide credit facilities to the rural poor through the setting up of credit unions. Its organization, methods, use of savings, its operation as an agent of change, interest rate policy, and its position in terms of receipts of grants and funding is examined.

2. Sinnappan, P. 1992. Credit experiences for the poor: the case study of credit unions in Malaysia. Partners in Rural Poverty Alleviation: NGO Cooperation.: 141-47.
Abstract: The credit union concept was introduced into Malaysia in the early 1970s. This paper briefly outlines the national objectives of the Credit Union Promotion Club of Malaysia; its operating principles; the initial problems it faced; its 3 year expansion programme initiated in 1980; the progress made; and the various services provided. While servicing the needs of the poor the credit union has also helped non-governmental organizations to become partially self-financed.

3. Songsore, J, DRF Taylor, DRF Taylor, and F Mackenzie. 1992. The Co-operative Credit Union movement in North-Western Ghana: development agent or agent of incorporation? Development-from-within:-survival-in-rural-Africa. 82-101. 
Abstract: Credit, by enabling peasants to expand and develop income-generating activities and by supporting payments of water tariffs, health charges and school fees, could be a vital tool for empowering the rural poor to cope with the consequences of the crisis brought about in Ghana through structural adjustment. The Cooperative Credit Union movement, started in Ghana's north-west region in 1955, was to serve as a focal point for the endogenous, grassroots mobilization of local resources for local development. The chapter reviews state policies and the development of institutional credit in this largely neglected rural region, and attempts to situate credit unions in the context of this general development. It is argued that the cooperative credit union movement has served more as a vehicle for the penetration of capitalist production relations in this regional periphery than as a development agent addressing the needs of the majority of the members. Pertaining to this proposition, the chapter discusses urban-rural contrasts in access to credit; differential class and gender access to credit; and peasant protest and crisis in the credit movement. Suggestions are made which are aimed at recapitalizing and redirecting the credit unions towards the genuine development aspirations of the rank and file membership, especially women, who are among the least heard. It is only through such reforms that the movement can serve the interest of the poor and thus become an effective coping mechanism for the poor.

4. Tiljander, A. 1992. Impeded democracy: chiefly hierarchy versus democratic institutions in village decision-making. Working Paper, No. 23 ed. University of Stockholm, Sweden: Development Studies Unit, Department of Social Anthropology.
Abstract: This paper is derived from a study undertaken in Lesotho in 1991 with a minor field study scholarship from SIDA, the Swedish International Development Authority. It was conducted at the request of the Farm Improvement with Soil Conservation Project (FISC) in Mohale's Hoek District. The primary objectives of the study were to analyse the administrative set-up of the gazetted village chieftainships, to identify all the relevant communities and to analyse the role they play in community development with special emphasis on the Village Development Committees (VDCs). The secondary objectives were to analyse: (1) the socioeconomic background of the chiefs and committee members; (2) attitudes to soil conservation among farmers and village leaders; (3) the role of women in influencing decision-making pertaining to community development; (4) cases of theft and damage in relation to soil conservation activities. The study was limited to two chieftainships within Mohale's Hoek District. Findings are based on interviews with chiefs, committee members and farmers. Following an introduction, a description of methodology and of the background of the country and district, sections deal with the FISC project, the social structure of the village leadership, altruism or nepotism as explanatory factors of behaviour, impeded democracy in the village development committees, the land allocation committee and other village groups (burial societies, churches, communal garden societies, credit unions, village water supply committees). The question regarding the extent to which the committee members are a village elite is posed. The election process is described and assessed. Theft and damage may be characterized as either acts of resistance or survival strategies. A clear gap between leaders and common people is evident. Though projects must work through existing leadership channels, there is a need for consultation with ordinary people.

5. Warren, DM. 1992. Strengthening indigenous Nigerian organizations and associations for rural development: the case of Ara community. Occasional-Paper, No. 1 ed.Nigerian-Institute-of-Social-and-Economic-Research.
Abstract: Until recently many national and international development agencies have tended to overlook the role of indigenous organizations and associations in community-level efforts to identify and prioritize problems and seek solutions to them. It is now apparent that indigenous knowledge and decision-making are operationalized through organizations such as traditional councils, occupational associations and unions, age grade associations, social clubs, credit unions and religious groups. Most indigenous knowledge systems that exist in a community are often invisible to an outsider, but development activities can be greatly enhanced by working with and through indigenous organizations rather than setting up new ones. This project, during which local leaders attended development planning workshops, was organized to determine which management and development planning training exercises could be shown to be effective in the training of non- and semi-literate participants to strengthen their capacity and the capacity of their grassroots organizations for development purposes. The research was conducted in Ara and 34 towns and villages located in the Egbedore area of Osun State of Nigeria.

1991 (2)

1. Fong, Monica S., and Heli Perrett. 1991. Women and Credit: The Experience of Providing Financial Services to Rural Women in Developing Countries. Milan, Italy: Finafrica Foundation.
Abstract: Rural women have been one of the most consistently neglected groups in development planning and programming, and, paradoxically, one of the groups with the greatest unrealized potential. Direct access to credit, accompanied by savings, can become a catalyst for change that brings benefits to rural women, as well as to their families and communities. In the introductory chapter, the reasons for direct l ending to rural women in developing countries are highlighted and women's creditworthiness is reviewed. A review of women's informal practices of borrowing and savings, their advantages and disadvantages is given in Chapter 2. This is followed by an overview of women's limited use of formal financial markets for borrowing and savings, and existing constraints on the supply of credit to women in Chapter 3. Chapter 4 discusses women's demand for credit, its assessment and promotion, with reference to both institutional credit and to savings. Chapter 5 provides an overview of institutional strategies for providing financial services to rural women, either separately or together with men, with extensive case illustrations; the variety of operational linkages that are being tried between credit and savings. The role, development and functioning of grassroots credit and savings groups, and the factors that determine its effectiveness in practice are discussed in Chapter 6. The concluding chapter summarizes lessons about planning of appropriate financial services for women and the related policy implications.

2. Xavier, G F. 1991. A study of the adherence to the credit union operating principles by the cooperative credit and banking institutions in India. Indian Cooperative Review 28, no. 3: 255-74.
Abstract: As a preliminary step in assisting credit development in India, the Asian Confederation of Credit Unions (ACCU) pursued an evaluation of the country's existing cooperative and institutional credit structure. This article presents the results of the evaluation. Purposive sampling is carried out following a selection of respondents, and the statistical results of a survey relating to the desirable properties of a banking system are presented along with tests of significance. With the exception of a few cooperative societies, it is found that most of them function in accordance with the principles of a credit union. The needs of the institutions in terms of membership, democratic control, service quality and other principles are outlined in conclusion.

1990 (3)

1. Baydas, MM, and CE Cuevas. 1990. The demand for funds from rural credit unions in Togo. Savings and Development. 14, no. 4: 371-80.
Abstract: This paper analyses the demand for funds by rural borrowers in the semiformal institutional framework of a credit union movement. In this framework, loans supplied by the financial institution are allocated among borrowers according to a rationing mechanism which involves price and non-price mechanisms. The objective of the study is to analyse the extent to which price components influence credit allocation in credit unions and to highlight the factors that help resolve asymmetric information problems. Transaction costs, as a part of the total price of funds, have been identified as a primary factor in borrowing decisions. They represent the additional costs imposed on borrowers by lenders beyond interest charges which play the role of a rationing instrument, particularly in the presence of interest-rate restrictions. However, it is not clear whether under the credit union non-profit and democratic operational mechanisms transactions costs are used as a rationing instrument in the credit allocation process. This paper addresses this question using a simultaneous equations system involving a price equation and a demand for funds equation. In this model, transaction costs and loan amounts are tested for the validity of their classification as endogenous variables. The explanatory variables in the system were expected to shed some light on the significant factors and principles by which credit unions operate. A 1987 baseline study of the Togo credit union movement, which involved 395 rural household interviews, provided the data used to test the model. A total of 137 observations representing farmer-borrowers who had access to credit union loans are used as the data base for analysis. The paper shows that credit rationing is not exercised through transaction costs in Togo rural credit unions, as is the case in other financial institutions. Rules of proportionality between deposit holdings and loan amounts determine loan size, while risk-related factors influence the level of borrower transaction costs.

2. Bouman, FJA. 1990. Informal rural finance: An Aladdin's lamp of information. Sociologia Ruralis 30, no. 2: 155-73.
Abstract: The one-sided emphasis on the flow of credit via formal financial channels is based, on the one hand, on the strong belief in the superiority of the formal sector and, on the other hand, on a series of misunderstandings of the nature, magnitude and role of the informal finance sector and the type of actors that predominate in this field. One of the consequences of this one-sided emphasis on credit rather than financial intermediation has been that project planning, as well as evaluation of results, has remained limited to an analysis of the process of lending focused mainly at the problems and peculiarities of lending institutions. Much less, if any, attention has been paid to the behaviour and peculiarities of savers and borrowers unless in terms of formulating their credit needs. Inherent in this is the concept of the moral and technical superiority of the formal over the informal sector in dispensing financial services to the poor. However, a rethinking of this conventional view was more or less forced upon aid agencies with the arrival of the oil crisis, which brought about a new realization of the necessity of generating domestic savings within the developing countries' own economy. The paper discusses the myth that informal finance is the exclusive domain of the village money lender and argues that a close study of the financial behaviour of low-income rural households dispels such stereotypes and prejudices. An examination of the interest rates within the informal finance market argues that, in the main, cost and risk factors rather than monopoly positions and exploitation dictate the level of interest charged.

3. Devereux, S, H Pares, and J Best. 1990. Credit and savings for development. Development Guidelines, no. 1 ed.OQEH.
Abstract: This book focuses mainly on the savings and credit needs of the poor in rural parts of developing countries. The rural household economy and situations in which the need for credit arise are analysed in Part One, with a critique of existent rural financial institutions. The problems encountered are discussed in detail in Part Two, under the chapter headings of creditworthiness, access to credit, default, programme design, participation and dependency. While access to credit is looked at from the point of view of would-be borrowers, creditworthiness and default represent the lenders' view. Savings programmes, considered as important as credit for development of local communities, are also examined. Examples from projects which are mostly administered by OXFAM, including the Grameen Bank of Bangladesh and credit unions in Zambia, are used to verify the arguments. Other case studies are based on India, Zaire, Cameroon, Haiti, Brazil and South Africa. In conclusion several proposals are made in an attempt to maximize the impact of credit and savings schemes. It is important to realize that credit represents only one of the many components of a rural development strategy and there is need for every component to operate efficiently. Where funds are inadequate communal savings systems can act as guarantors to enable individuals and groups to borrow from formal lending institutions. The role of the local organization is crucial in providing information about credit policies and persuading the poor to save as well, especially as credit is considered a foreign concept by many intimidated but potential borrowers. In order to mitigate the effects of inflation and encourage a sense of independence, interest rates are supported, although at a reasonable rate.

1989 (1)

1. 1989OQEH.
Abstract: The monograph, which looks at the National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP), is one of a series undertaken by the International Labour Organization Workers' Education Programme to provide practical information on the structure and work of organizations developed by rural populations, whether as wage earners or as self employed small farmers and peasants. Field work was undertaken during August-September 1988. Background data are first presented regarding the Philippines, then on the socioeconomic situation of agriculture and rural areas, of the labour force and relating to unemployment, wages and income. Discussion of the agrarian structure and the sugar industry reviews agrarian reforms, the Comprehensive Agrarian Reform Programme, the sugar crisis and NACUSIP. An outline of the institutional framework highlights government, the political structure and labour legislation. Comments on the Trade Union Congress of the Philippines precede the report on the NACUSIP, where aspects covered are historical background, organization, finances, staff and administration. A brief review of NACUSIP services to its affiliated members encompasses collective bargaining, workers' education, legal assistance, research, women's and youth affairs, social welfare as well as sports and cultural activities. Special services include: consumers' cooperatives and commodity stores; cooperative credit unions; catering; low-cost housing; tailoring; and health care. Comments are made concerning self-employed rural workers.

1988 (1)

1. Cuevas, CE. 1988. Savings and loans cooperatives in rural areas of developing countries: recent performance and potential. Savings and Development 12, no. 1: 5-17.
Abstract: Drawing on case studies from Cameroon, Rwanda, Togo and Honduras, this paper analyses the main indicators of credit union performance and notes the potential role of credit unions in the development of rural financial systems. The growth rates of credit union savings and loans outstanding are compared with the growth of quasi-money and private sector credit in the economy. The findings indicate that cooperative savings grow in general faster than quasi-money in the economy, thus increasing the relative importance of credit unions in the country's monetary system. This trend is even more visible when comparing the lending performance of credit unions with the growth of private sector credit. The results presented suggest that cooperative organizations can be a dynamic form of financial institution, and are likely substantially to increase access to financial services in rural areas of low income countries.

1987 (4)

1. Almeyda de Stemper, G. 1987. The role of credit in development projects: the credit union movement in Togo.BIDS.
Abstract: This paper outlines the development of Togolese credit unions, describes the type of credit they provide, and analyses their role as viable financial intermediaries in Africa. Credit unions have served as a model that can be adapted to the needs of those left outside the process of monetization and financial intermediation of modern economies, facilitating these people's incorporation into formal financial markets. This study shows that credit unions mobilize savings and respond to the credit needs of their members. 90 Togolese credit unions illustrate, with their 900 members and more than 479 million CFA francs in savings, indigenous institutional development.

2. De Stemper, GA. 1987. The role of credit in development projects: the credit union movement in Togo. Savings and Development Supplement, no. 1: 27-44.
Abstract: This paper outlines the development of Togolese credit unions and describes the type of credit provided by the credit unions, in order to analyse their role in the formation of self-sustained and viable financial intermediaries. In particular, it looks at their relevance for forming financial institutions that local people can manage and adjust to their own resources in order to service their needs. Following the introduction, section II presents the major criticisms made of credit programmes in developing countries and introduces the institutional development approach of credit unions. Section III describes the nature of credit within credit unions. Section IV analyses the differences between the credit services provided by credit unions and those of other financial institutions, an analysis that then relates these differences to the issues described in Section II. Section V identifies a credit union's use of external funds. Section VI presents the conclusions; data from Togo suggest that credit unions have successfully mobilized local savings and created a fund from which members can borrow for both consumption and production.

3. Donnelly, RD, JE ed. Bayley, and E Parnell. 1987. British credit unions in 1985: an analysis. Year Book of Agricultural Co Operation 1986: 171-87.
Abstract: Credit unions are virtually unknown in the UK outside Northern Ireland. Although credit unions in the UK have grown over the past five years they are still very small. The study examines what progress they have made, their position in September 1985, and considers what problems they face in their future development.

4. Jayahanthan, S, JE ed. Bayley, and E Parnell. 1987. The co-operative movement in Grenada: administration and development. Year Book of Agricultural Co Operation 1986. 189-210.
Abstract: The paper first provides an overview of the cooperative movement in Grenada showing that, despite the differences in their policies, all successive Governments have encouraged cooperative development. Nevertheless the cooperative movement as a whole has not been as vigorous as was hoped, and has not greatly affected the economic and social development of the Grenadian community. A sectoral view is then presented of all types of cooperative: credit unions, agriculture, fisheries, industries, and school cooperatives. An analysis is made of some of the most important factors that have retarded the growth of cooperatives. It is indicated that while there is direct support to cooperatives in the areas of audit supervision and provision of education and training, the most stable and meaningful aid provided by the Government is indirect. The final section looks at the likely future development of the cooperative movement in Grenada.

1986 (2)

1. Belamide, E. 1986. Building self-help groups. The Philippine experience. Ideas and Action 6: 13-18.
Abstract: In the Philippines self help has been seen as a vital factor in eradicating poverty and improving the lot of the poor. The article describes the various approaches towards building up self help groups that have been implemented. The Marcos Government approach through its various rural development projects largely failed, as self help groups such as the Samahang Nayon (Village Association), a rural cooperative project, became mere channels of elite political parties at the village level. As well as the cooperative projects, various units of Government initiated the building of rural self help groups where participation was seen only as a response by these organizations to government initiated programmes. The Philippines is the only predominantly Christian country in Asia, with 83% of the population Roman Catholic. Organizing self help groups has been a recurring theme in the Church's support for the poor, deprived and oppressed, provided through credit unions, socioeconomic projects and church organizations. There is a faith dimension to all these activities which takes the form of the Basic Christian Communities (BCC) in all parts of the country. The second half of the article concentrates on the Palawan Center for Appropriate Rural Technology (PCART) which does organizing and education work among swidden farmers in one of the biggest island provinces in Southern Philippines.

2. Soos, HE. 1986. Ecuador: private sector cooperatives and integrated rural development. AID-Project-Impact-Evaluation-Report, No. 59 ed. Washington, DC: US-Agency-for-International-Development.
Abstract: USAID's assistance to cooperative development in Ecuador began in 1962 and ended in 1976, providing $10 million to federations of credit unions and agricultural cooperatives. This report focuses on 4 USAID projects relevant to supporting the cooperative movement: a Credit Union Grant for institutional development signed in 1962; an Agricultural Cooperatives Grant; two loans for channelling agricultural credit through credit unions; and a Land Sale Guaranty Loan for rice cooperatives. The evaluation concludes that cooperatives and credit unions can promote integrated rural development. Cooperatives that have increased production are generally more successful in improving housing, education, water supply and electricity supply. For agricultural cooperatives management skills are essential for success. Cooperative education is found, since USAID assistance phased out, to be seriously inadequate. Lessons learned pertain to the long-term nature of institutional development, including the need for cooperatives to identify services they can deliver effectively to generate operating costs.

1983 (1)

1. Von Pischke, JD. 1983. Selected successful experiences in agricultural credit and rural finance in Africa. Savings and Development. 7, no. 1: 21-44.
Abstract: Several institutions have successfully provided financial services to African smallholders, although none is completely satisfactory in all respects. Six examples are summarized to indicate factors which suggest that, when appropriate financial technologies are devised in specific circumstances, viable institutions may be created or promising innovations tested. These include the Caisse Nationale de Credit Agricole in Morocco, the Cooperative Savings Scheme in Kenya, credit unions in Cameroon, savings clubs in Zimbabwe, group credit in Malawi, and rotating savings and credit associations in a number of countries. Lessons from the numerous failures seem consistent with tentative conclusions based on these cases: (1) illiterate and semi-literate farmers having some contact with the cash economy can devise informal and socially useful means of financial intermediation. (2) Traditional rural institutions, such as the extended family and village, provide a basis for organizing financial services to participants in these institutions. Participation tends to ensure responsible performance. (3) Systems of rural financial services which are relatively simple to operate can succeed in reaching large numbers without intensive outside assistance if they serve a real demand. (4) Saving facilities have much greater potential than credit programmes for reaching large numbers and for achieving rapid institutional growth. (5) State-owned large scale specialized farm credit institutions can be successful in financial terms and in serving a broad clientele only under unusual conditions.

1982 (1)

1. Songsore, J. 1982. Co-operative credit unions as instruments of regional development. The example of N.W. Ghana. Occasional-Paper, No. 18 ed.Centre-for-Development-Studies, University-College-of-Swansea.
Abstract: The study attempts to evaluate the role of credit unions as an alternative and potentially more viable source of institutional credit for development in the N.W. region of Ghana. It also attempts to unravel some of the prevailing tensions between different interest groups as to whom should benefit and in what degree from the capital resources of the institutions. The implications of the prevailing contradictions for genuine regional transformation as opposed to the reinforcement of existing hierarchies is also evaluated. It is demonstrated, with the use of empirical data, that the credit union organization has not only insinuated itself into the new social relations of production which were encouraged by the colonial order but also advanced the development of these class relations.

1981 (2)

1. Baker, LBB, RM Josephson, RG Aukes, R Ashmead, DF Kraft, P Blawat, and CA Carter. 1981. Farm management and marketing for agricultural lenders. Papers presented to "An introduction to economic farm production for lenders, 1981". Occasional Series No. 13 ed. University of Manitoba. Department of Agricultural Economics and Farm Management.
Abstract: The purpose of the course, from which the papers are reproduced, is to provide a complete, if brief, background on all aspects of farm production and marketing in Manitoba, for personnel in banks and credit unions with responsibilities in farm credit. Main papers at the 1981 course were: (1) a detailed farm planning approach (L.B.B. Baker); (2) using enterprise budgets for decision-making (R.M. Josephson); achieving and maintaining financial control of the farm business (R.G. Aukes); assessing farmers' investment options (R. Ashmead); ownership or leasing of farmland (D.F. Kraft); the Department of Agriculture as a source of farm management information for farmers and lenders (P. Blawat); an introduction to futures markets in Canada (C.A. Carter); farmers' use of forward contracting and futures markets (R.M.A. Loyns).

2. Yeo, P, CE McKone (ed.), and JE Bayley (ed.). 1981. Patronage and self reliance in co-operatives from Raiffeisen onwards. Year Book of Agricultural Cooperation 1980: 1-9.
Abstract: The analysis starts from Raiffeisen because, it is maintained, he has the best right to be called the father (or perhaps the original patron) of modern co-operation. Also, the book The Credit Unions, which he wrote more than a century ago, highlights the contradictions between patronage and self-reliance which continue to puzzle co-operators to this day. The paper compares what he wrote with developments in Britain, in India and in Tanzania.

1980 (2)

1. Adams, Dale W . 1980. Rural financial markets and development in low income countries: some insights for the U.S.? Economics and Sociology Occasional Paper, No. 712 ed. Ohio State University: Ohio State University.
Abstract: Financial markets in the USA have a generally high reputation for their service to farmers and rural non farm businesses, although there has been some recent criticism of US rural financial markets (RFMs). Much of this centres round undue assistance to larger farmers and borrowers. Many low-income countries have tried to emulate U.S. RFMs, through co-operative credit institutions, supervised credit programmes, rural private banks, government lending agencies, and credit unions. However, many are dissatisfied with their performance, as they still do not reach small businesses and the rural poor. Policymakers need to focus on improving and strengthening the process of financial intermediation rather than trying to finesse the fungibility of finance. Interest rate restrictions and credit controls are part of the problem, not part of the solution. Recent events in low income countries illustrate how financial markets react in rural areas when faced with inflation.

2. Nadkarni, RV. 1980. Glimpses of the co-operative movement in the Philippines. Co Operative News Digest. 31, no. 2: 18-21.
Abstract: This article describes the organizational development of co-operatives, especially since the decrees of 1972. The objective of the legal reorganization was to build up the co-operative movement from a strong base of village level associations for education and savings schemes. A minimum of 25 small-scale farmers is necessary for the formation of the primary unit: the "Samahang Nayon". The Samahang Nayon is expected to serve as a training ground in self government. By 1975 there was a membership of more than 6m. people. Regular co-operatives have been formed from these basic units and are of four main types: co-operative rural banks, area marketing co-operatives, urban credit unions and consumers co-operatives in the urban areas.

1979 (1)

1. Van Heck, B. 1979. Research guidelines for field action projects to promote participation of the poor in rural organizations. Rural Organizations Action Programme. ed. Rome, Italy: FAO.
Abstract: A framework for research and action by local institutions, to involve the participation of the poor in development through their rural organizations, was initiated early in 1975 by the Human Resources, Institutions and Agrarian Reform Division (ESH), FAO, Rome. The draft framework was discussed and revised by officials and experts in FAO, UN, ILO, COPAC, IFAP (International Federation of Agricultural Producers), ICA (International Cooperative Alliance), WOCCU (World Council of Credit Unions) and the Plunkett Foundation, Oxford, during 1975/1976. Consultations were also held with the three International Federations of Rural Trade Unions: IFPAAW, Geneva; WFAW, Brussels; and TIUAFPW, Prague. ROAP (Rural Organization Action Programme) was begun late in 1976, a substantial programme with an increased number of activities. This paper is a preliminary practical guide, containing a number of basic considerations, proposals, core elements, and requirements for the preparation of specific research designs. The paper has as its main purposes: (a) to facilitate the briefing of local research and action personnel as well as other persons interested in ROAP; (b) to help safeguard the required comparability of the outcome of the ROAP research projects in various areas and countries. ROAP research is to consist of two types of action-orientated studies: (a) country studies for which the necessary data are mainly collected from secondary sources, or from existing documentation; (b) field surveys to be set up in selected areas, either as self-contained projects or as essential components of comprehensive rural development programmes. This paper offers guidelines for both types of studies, but particularly for field surveys.

1978 (2)

1. Crocombe, RG. 1978. Rural development in the Pacific Islands: past disasters and future hopes. Pacific Perspective 7, no. 1-2: 42-59.
Abstract: Constraints to rural development in the Pacific Islands are outlined (urban bias, isolated units, the popularity of foreign models, social and cultural traditions) prior to an investigation of rural development achievements. These include the establishment of co-operatives and credit unions, cottage industry, fish ponds and biogas products, improved communications and literacy extensions, rural colleges, and agricultural training centres such as the Marist Rural Training Centre at Tutu, Fiji, founded in 1970, which have earned a reputation for effective, pragmatic training of rural youth. Prospects for future developments and the roles of local government, the church, youth movements, and educational establishments are considered.

2. Kirsch, OC. 1978. Credit unions to support rural development projects in Africa. Journal of Rural Cooperation. 6, no. 2: 143-56.
Abstract: Case studies are presented which illustrate the role and possibilities of credit unions as particular forms of co-operative societies within different development projects. Special attention is given to: (1) the Small Farmers' Production Credit Scheme in West Cameroon with financial assistance from the Africa Co-operative Savings and Credit Association and the American Credit Unions National Association; (2) promotion of small-scale self-help groups in North Ghana, sponsored by missionaries; and (3) the irrigation settlement in Mwea Tebere in Kenya with financial assistance from various multilateral and bilateral capital assistance programmes in the UK, USA and West Germany. The most important lesson to be learned from the credit union movement in Africa is the fact that in addition to heavily administered multi-purpose agricultural societies without member participation, viable, autonomous co-operative societies can be found in the same area. The strength of these co-operatives lies in their small manageable size and their restriction to single-purpose activities. It is no longer true that farmers in developing countries cannot belong to several co-operative societies simultaneously. The credit unions are proof of this in areas with well developed agricultural marketing co-operatives. Furthermore, farmers in Cameroon, for example, are not only members of co-operatives but also of traditional savings clubs. The paper does not advocate a replacement of the often bureaucratically administered agricultural multi-purpose co-operatives by credit unions in connection with link-ups with other service organizations, since it recognizes that agricultural development on the micro-level still depends heavily on integrated services supplementing agricultural extension. But credit unions should be considered as an interesting alternative and a supplementary organization in rural development.

1976 (2)

1. Bouman, FJA, and K Harteveld. 1976. The Djanggi, a traditional form of saving and credit in West Cameroon. Sociologia Ruralis 16, no. 1-2: 103-19.
Abstract: The study of indigenous rotating credit associations in the Third World has recently received fresh attention because of their potential role in rural development. Research however has barely focussed on the more technical details of the issuing and recovery of credit. This article tries to fill part of the gap by a description of the Djanggi in West Cameroon. Selection and credit rating of membership, problems of security, overhead costs, fraud and social control are dealt with. The analysis shows also that the Djanggi is more than simply an institution of saving and borrowing. It combines elements of education, sociability, tradition and recreation. Its flexibility and adaptive potential have enabled villagers to cope with the increasing demands of a changing society. In the final analysis this institution seems ideally suited to carry a community through the initial stages of socio-economic transition. It thus offers a sound alternative to modern co-operatives and credit unions, struggling with complexity and formality of organization and procedures.

2. Roy, EP, and D Leary. 1976. Economic survey of limited-resource credit unions. Louisiana Rural Economist. 38, no. 4: 5-8.
Abstract: Six credit unions were studied in the spring of 1975 as part of a larger survey of limited-resource co-operatives in Louisiana. It was found that of the six credit unions studied, four need or would need subsidies to operate at present levels, while the other two do not. It is concluded that credit unions for limited resource persons are a valuable institution to provide borrowed funds at modest cost and to encourage thrift. However, until a credit union can reach a loan volume of about $350,000 it will need subsidies of some kind, such as volunteer labour and management or free rental space or utilities or combinations thereof. If a potential loan volume of $350,000 is not available in the area the credit union should plan on a permanent subsidy arrangement. Many credit unions, both large and small are the recipients of subsidies from the employers who employ the members of credit unions.

1975 (1)

1. Youngjohns, B J. 1975. Primary co-operatives in Jamaica. Year Book of Agricultural Cooperation 1975: 163-75.
Abstract: There are 246 primary co-operatives in Jamaica with an aggregate membership of about 160,000. There are also 125 credit unions. Apart from bananas, coffee and cocoa the most important co-operative marketing organizations are concerned with potatoes and fishing.