Village banks offer hope in Asia, by Donald Greenlees
Thursday, June 23, 2005
The concept of the village bank was brought to the people of Ban Taling Chan soon after the tsunami by Mechai Viravaidya, who became a celebrity in Thailand for promoting the use of condoms, curbing population growth and the spread of HIV. Mechai, chairman of the Population and Community Development Association, has a simple principle for his aid programs: The route out of poverty is business, not charity.
“Charity is a dead end,” he said. “Once your funds run out, you are at a dead end.”
Mainstream financial institutions are taking a greater interest in microcredit, and government and nongovernment aid organizations, long recognizing its importance, are increasingly making access to microcredit an integral part of aid programs.
Analysts say this shift promises to give the poor much greater access to affordable financing. For instance, this year the Thai government is starting to convert a nationwide network of village development funds, seeded with a credit line of 1 million baht, into village banks.
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Source: International Herald Tribune