People need to increase their incomes and become financially literate to emerge from poverty. To facilitate this, the poor require the same credit and savings opportunities as the rich, but on a smaller scale. Unfortunately, residents of small communities very rarely have to access stable financial services and are instead forced to use informal financial mechanisms such as moneylenders. Such services are risky and unsustainable, and do not teach the poor financial literacy.
Your gift will be used to help establish a new communal bank, run by community residents to serve their local financial needs. The communal bank is an integrated financial service, giving bank members simultaneous access to savings, investment, and credit. To establish each bank, a Fundefir employee works with a small group of five community members. The local bank leaders achieve community buy-in, convincing family and friends to invest their savings in the bank. The loans are drawn from the pooled savings of all the bank members, inspiring near-perfect repayment rates. Fundefir’s communal banks innovatively serve the community by using residents’ savings to finance loans, providing loans for a variety of purposes, serving both genders, disbursing dividends, and building human capital. This model instigates grassroots economic development, and your gift will provide this life-changing service to approximately 40 poor people.