Bank bonanza

In the past week, I have facilitated the first savings rounds of three community banks, hooray! Seeing as it's been almost eight months since I started talking about community banks with potential counterparts in my site, I'm extremely excited that all the talking is finally coming to fruition.

A community bank is a group of people (most often women) who decide to save money together, and from the accumulated savings, give/take out small loans among themselves. Although it's quite a simple concept, it's a very powerful financial tool that is awesome because it a) gets people in the habit of saving (not common in Peru), and b) gives women access to small amounts of capital without the need of any formal guarantees. Confianza (trusted relationships) is the key to a successful community bank: if you know all the other ladies you're saving with, you know which door to knock on if a loan isn't returned on time.

So I've now got a group of 11 year-old boys saving S/. 1 each week in their homeroom class, a group of campo ladies who are community leaders with the local center against domestic violence saving S/. 10 each month, and a group of women who're part of a community service organization saving S/. 50 each month. These are tiny amounts by U.S. standards (S/. 50 is less than $20, and one sole equals about 39 cents), but for these ladies (and boys) it is a big deal to save this much on a regular basis, and it's fun to see how excited they get talking to each other about it.

While I am the one teaching these groups how the community banks work, each bank elects its own Administrative Committee, and the four members of the committee are the ones who manage the bank's operations. The President runs the meetings, the Secretary keeps the books, the Treasurer counts the money, and the Auditor makes sure nothing shady goes on under the table. At the end of each bank meeting, the cashbox stays in the Treasurer's house, and each of the other three committee members takes home a key to one of the three padlocks we put on the cashbox. Although partially symbolic, this reinforces the idea that the money belongs to all the members of the bank and can only be managed when everyone is present.

Unfortunately, since the first meetings are a little chaotic while everyone gets used to the process and gets organized, I forgot to take pictures of any of my banks. I'll try to work on that...