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Best Practices voor een duurzame toekomst
12 maart 2005

Dutch microfinance goes rural

The need to go rural was underlined by Ms. Marguerite Robinson, one of the speakers and a leading Harvard-based researcher on microfinance. Ms. Robinson first addressed to put the 'blame' for the poor performance of savings programmes, or the refusal by the poor to save in this way, at the door of the savings institutions rather than on the 'savings ignorance' of the poor. According to her, the poor save proportionally more than the middle class and prefer to save with sound institutions. She said small savers would accept lower interest rates provided they had access to their savings when they wanted and had confidence in the micro finance institutions. Her own research showed the poor hesitate to save not because they prefer to have cash in hand, as many wrongly believe, but because access to their savings is often restricted. As the poor keep proportionally more of their money in savings than large savers, it is clear they must have frequent access to it. If this means offering a 24-hour withdrawal service then that is what small banks must do. They must offer products and services small savers want if these clients are to be attracted and if the banks are to achieve the profitability they seek. On the conference the need of high-tech help to poor farmers was underlined, to give direct access to their savings. Research showed, said Ms Robinson, that saving and borrowing must be separated. Mandatory savings schemes usually do not work because they limit access by the poor to their savings and this is one of the main reasons why they do not save. No matter what the country, culture or almost anything else, the poor do not need to be 'trained' to save. They save continuously because they have to and because it is part of their nature and business. Peasant farmers buy more animals or property, or put aside grain as a safeguard against bad harvests. Urban micro entrepreneurs increase stock when they can buy merchandise at lower prices or stock up on finished goods for sale later. These forms of saving should not be considered as barriers to saving with microfinance institutions. Rather, they need to attract and cater for the needs of this sector of small savers who already are instilled with a savings discipline. About the need to save money: "It was Bob Vogel that first made the now-famous statement that "Savings is the forgotten half of rural finance." Perceptions have changed considerably in the industry since then, but the crucial role of savings - both as a service and as a source of financing loans - is unfortunately not developed far enough yet." More and more commercial banks are moving into microfinance. Dutch banks like Rabobank, ING, ABN Amro and also the FMO already started serious schemes to develop this market, with small loans, but high interests. "Time is a very important factor", stated mr. Heemskerk. "We need skilled local managers. That means training, education. And that means we need a vision that goes 10 to 25 years or so ahead." The audience made clear that in the meantime NGO's like ICCO and Oikocredit will be needed, because the poor can't wait. P+ Webtip: ICCO