Madison, WI—Seated in front of a camera in Madison, Wisconsin, for the Digital Video Conference on Self-help Groups in India, Pete Crear, President and CEO of World Council of Credit Unions (WOCCU), shared insights from the US credit union experience in microfinance with Indian counterparts gathered in Chennai, India.
To date, microfinance in India has been focused almost exclusively on the provision of microcredit. As in other parts of the world, people there are recognizing that the poor need access to more than credit to work their way out of poverty.
“It does not matter how big or how small, people need different types of financial services at different stages in their lives,” Crear commented. “Whether in India, the United States or any other country, the challenge remains to provide savings services that enable members to accumulate wealth, take loans at affordable, market-driven rates and purchase insurance to mitigate their risk.” Money transfer services are also important for members to be able to send cash to their families.
Eighty percent of India’s more than one billion people live on less than US$2 per day, and 34% live on less than US$1 per day. Access to affordable financial services can provide some of these people with the tools they need to increase their income, build household wealth and create opportunities for their families to break out of poverty.
Self-help groups are a step in the right direction. Poor people, mostly from the same socio-economic groups, form the small voluntary associations to promote small savings among members. The savings are pooled and kept in a bank in the group’s name.
The potential is great in India for member- owned financial institutions—from informal self-help groups to more formalized credit unions—to fill the huge unmet demand for financial services among the poor. The US credit union experience can provide tremendous lessons for self-help groups in India. As Crear commented, most US credit unions were established to provide small savings and loan services to members who did not have access to them anywhere else.
M. Kalyanasundaram, Chief Executive, International Network of Alternative Financial Institutions (INAFI) in India, M.P. Vasimalai, Executive Director of the DHAN Foundation in Chennai and Jeffrey Ashe, Manager of Community Finance, Oxfam America in Boston, also joined Crear on the teleconference panel. More than 50 microfinance professionals, leaders of self-help groups, journalists and academics attended the conference, which was sponsored by the United States Consulate in Chennai.
Information provided by World Council of Credit Unions, Inc. World Council is the apex trade association and development organization of the international credit union system. It promotes the sustainable growth of credit unions and financial cooperatives across the globe. As instruments of economic and social development, World Council, its regional confederations, and national member organizations in 92 countries with 42,616 member credit unions serve more than 157 million people worldwide.
Source: World Council of Credit Unions (WOCCU)
http://www.woccu.org/press/press_rel/pressr.php?pressr_id=1358
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