A CVECA is a ''self-reliant village savings and credit bank'' (from the French Caisse Villageoise d'Epargne et de Crédit Autogérée). CVECAs are designed to operate in rural areas with clients who are primarily subsistence farmers, with minimal non-farm income. While most banks have less than 250 members, they achieve service flexibility and
economies of scale
In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables ...
through networking together into regional federations. "Each bank is managed by 2 part-time local staff and a board composed of members, all of whom have minimal education."
CVECAs are member-based
microfinance
Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...
intermediaries inspired by external technical support. Structurally they lie between
informal
Formal, formality, informal or informality imply the complying with, or not complying with, some set of requirements (forms, in Ancient Greek). They may refer to:
Dress code and events
* Formal wear, attire for formal events
* Semi-formal attir ...
financial market actors like moneylenders, collectors, and
ROSCA
Rosca (ring or bagel) is a Spanish and Portuguese bread dish eaten in Spain, Mexico, South America, and other areas. It is made with flour, salt, sugar, butter, yeast, water, and seasonings. It is also called ka'ake and referred to as a "Syrian ...
s on the one hand, and formal actors like microfinance institutions and
bank
A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...
s on the other. Other organizations in this transitional zone in financial market development include
self-help groups {{short description, None
This is a list of self-help organizations.
Twelve-step programs
Recovery programs using Alcoholics Anonymous' twelve steps and twelve traditions either in their original form or by changing only the alcohol-specific ref ...
,
ASCAs, rural credit co-operatives,
village banks and financial service associations.
Significance
These small financial intermediaries "grew out of an interest in improving the traditional cooperative model in West Africa" by adapting it to thinly populated regions where there are very low levels of functional literacy and
monetization
Monetization ( also spelled monetisation) is, broadly speaking, the process of converting something into money. The term has a broad range of uses. In banking, the term refers to the process of converting or establishing something into legal tend ...
. Many of the world's poorest people live in such regions. The CVECAs represent an effort to show that poor people can manage and operate their own banks. Should this prove to be the case, it will open the doors to greatly expanded access to
microfinance
Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...
for poor rural populations.
Progress
Beginning in the
Dogon
Dogon may refer to:
*Dogon people, an ethnic group living in the central plateau region of Mali, in West Africa
*Dogon languages, a small, close-knit language family spoken by the Dogon people of Mali
*'' Dogon A.D.'', an album by saxophonist Juliu ...
region of
Mali
Mali (; ), officially the Republic of Mali,, , ff, 𞤈𞤫𞤲𞥆𞤣𞤢𞥄𞤲𞤣𞤭 𞤃𞤢𞥄𞤤𞤭, Renndaandi Maali, italics=no, ar, جمهورية مالي, Jumhūriyyāt Mālī is a landlocked country in West Africa. Ma ...
in the late 1980s, CVECAs have begun to spread around Africa, reaching 220,000 members with average loans of $130 by the end of 2003.
[Helms, ''Ibid''.] The networks in Mali are now sufficiently developed to access refinancing through the Banque Nationale de Developpement Agricole, the rural central bank.
See also
*
Credit union
A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including deposit accounts, provis ...
*
Microfinance
Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...
*
ROSCA
Rosca (ring or bagel) is a Spanish and Portuguese bread dish eaten in Spain, Mexico, South America, and other areas. It is made with flour, salt, sugar, butter, yeast, water, and seasonings. It is also called ka'ake and referred to as a "Syrian ...
*
Self-help group
References
{{reflist
External links
Comparative Analysis of Savings Mobilization Strategies
Development in Africa
Microfinance