Starter Kit. Idea 444 of 500. Cluster 23
Women's business networks with a loan fund, run the way Grameen Bank does it, not on charity
The mechanism, from the book
The single largest unused asset in the country is sitting at home, and the reasons are practical, not attitude.
The first step
Call together 15 women in one village who run or want to run a small business, and agree that each saves a small fixed amount every week into a shared fund. Lend the first sum to the one with the clearest plan, with group repayment rules drawn from the Grameen record. The proof is the first loan repaid on time, in full.
- Who pays first
- Women running small trades who cannot get a bank loan, paying a modest interest charge because the group lends when the bank will not.
- What leaves today
- Without credit, women sell raw produce instead of processing it; a small loan fund lets them add value and keeps the interest in the village.
Ask first
- the Divisional Secretariat. Ask whether women's savings groups in the area are registered here, and how.
- Department of the Registrar of Companies. Ask which kind of registration suits a members' savings and loan fund.
Check before you spend
Confirm what registration a members' savings and loan fund needs, written rules on lending and repayment signed by every member, and safe keeping of the money.
Find out these three numbers
- How much can each woman save every week?
- How large a first loan does the clearest plan need?
- How quickly could that loan be repaid from the business?
A comparison from the book
Denmark. Chapter Eleven
"Members signed binding contracts, usually for about 10 years, and each was answerable for the debts of the whole."
When the group answers for each loan together, repayment holds without charity.
The test
Does it keep value that now leaves the island, or build the proof that lets somebody else do so?
From the appendix of Why Not Sri Lanka? by Dr Maheshika Halbeisen. The idea and the mechanism are the book's; this kit was written for the site.