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Federations: An Empowering Approach to Micro-credit Delivery
MacVicar, A. D.
Publication Date: 29 Jul 2004
Published by: Mumbai, India: Swayam Shikshan Prayog (SSP)
Document Type: Presentation
How is the federation model different from the traditional micro-credit approach?
This presentation discusses the federation model of savings and credit and describes it as an empowerment approach to credit.
The presentation argues that credit for empowerment is different from traditional micro-credit as the former organizes people, particularly around credit, and builds capacities to manage money, while traditional micro-credit simply provides services to low income clients.
The presentation describes the federation structure in detail explaining:
- The Governing Body,
- The Cluster,
- The Savings and Credit Groups.
The presentation highlights that the federation model benefits women as:
- Women build their own capacities.
- They harness and mobilize their own funds and resources to meet their needs.
- There is overall social and economic development.
The author concludes that financial institutions (FIs) also stand to gain from the federation structure as:
- Legal status of federations eases bank linkages;
- They have a computerized database;
- Their accounts are audited;
- The scale of operations of FIs increases.
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