Formal microcredit/banking programs have allowed us to create a system of financial support in rural areas that utilize the advantages of a formal banking system and a village-based Economic Development Cooperative, with few of the disadvantages often found in NGO-microcredit systems and independent cooperatives.
This system is structured to encourage all villager participants to engage in some form of savings before they get any form of a loan. The initial savings are organized through a cooperative system (monitored and supported by CHOICE RDFs) that include most, if not all, villagers in a given rural community. This system ensures a more inclusive process of villager participation, a transparent and accountable system, and thus is seen as legitimate and equitable in its operations.
After villagers have participated in savings programs, those in need of capital to pursue entrepreneurial projects can access microloans either through the Economic Development Committee or through our partnering microfinance organization, Mentors International.