This edition of the newsletter aims to update readers on developments in the Banking with the Poor project since mid 1992. A lot has happened since then. Achievements include an extremely successful Asia-Pacific Regional workshop in Kuala Lumpur last July, completion of the BWTP Report and its transmission to decision-makers in many countries, and publication of the Report itself in book form. These events are reported in greater detail in these pages. Publication of the book, also titled Banking with the Poor, is a milestone for the Foundation. We report here on positive reactions to it from many quarters, and invite you to order a copy. Another new publication available from the Foundation is How to Build Self-Help Groups for Successful Banking with the Poor. It is a guide to forming and managing groups of the poor, which are the basic building blocks of a system of credit to alleviate poverty. Finally, we welcome our newly appointed Program Officer, Mark Otter, and wish him a fruitful association with the Foundation. John D Conroy Executive Director Book Launch: Milestone for Foundation The Foundation has recently published a book, Banking with the Poor, with financial assistance from the World Bank. It publicises the unique, action-research nature of the Banking with the Poor project, that is to demonstrate the scope for increased access to credit for the poor in developing countries on a sound commercial basis. The project arose from the belief that effective and lasting poverty alleviation must be based on increased self-reliance for the poor. That the creative and productive capacities of the poor can be liberated by their increased access to credit is demonstrated by the findings of the project. The poor are good credit risks. To use the jargon, they are fully "bankable". Better personal savings habits contribute to an increase in domestic savings which, in turn, strengthens national financial systems. Banks and other financial institutions are then able to provide sustainable flows of credit to the poor. Linkages between commercial banks on the one hand, and NGOs and self-help groups of the poor on the other, are the key to extending credit to poor. The book is the published version of the report on the Banking with the Poor project which was adopted by the Second Regional Workshop held in Kuala Lumpur in July 1992 (see separate report in this newsletter.) It contains recommendations for further action based on case studies prepared by a number of leading Asian banks and local non-governmental organisations (NGOs). Banks and NGOs from eight Asian countries worked together to examine each other's methods, work out how to reduce transaction costs, how to find substitutes for collateral on very small loans and whether the poor can pay market interest rates. The workshop was unique in that it was the first time that such a significant international dialogue has occurred between banks and NGOs. A campaign of advocacy designed to influence decision-makers has been commenced using the book as its main vehicle (see article on page 4 of this newsletter). It has been circulated to governments and central banks in the Asia-Pacific region as well as to bilateral and multilateral development institutions, international NGOs and, most particularly, to commercial banks and indigenous NGOs in developing countries in the region. Public sale of the book has also commenced. A "Landmark Report" says Minister In a letter to Foundation Chairman Dr Brian Scott, the Australian Minister for Trade and Overseas Development, Mr John Kerin, described the book as a "landmark report". He also described it as a "significant contribution to our understanding in this area and to the development debate more generally". Mr Kerin added, "I congratulate the Foundation for this achievement." Other reactions to the publication of Banking with the Poor have been equally positive. They include the following: "It brings together experience from a large number of countries and I am sure it will be of immense help to the developing countries and to the development community of the world." (Mr Idriss Jazairy, President, International Fund for Agricultural Development.) "The sound analysis and insight of the case studies and report will be of great value to us and our partners." (Marcel Massé, President, Canadian International Development Agency.) "I am really impressed with the facts and conclusions outlined by the report and I am certain many countries and agencies will strongly consider implementing the proposed programme." (The Hon Sanusi B. Junid, Minister of Agriculture, Malaysia.) "The Banking with the Poor study is a most significant inaugural contribution from the Foundation and I congratulate you on the excellent effort." (Russell Rollason, Executive Director, Australian Council for Overseas Aid.) Commercial bankers in the region have also reacted positively to the book with comments such as: "The commendable efforts of bringing together leading Asian banks and NGOs to share their experience for discussing ways and means to alleviate poverty is reflected in the book." And "I would like to request that the Foundation and our bank should remain in close touch since I am sure that the research undertaken by you can be of great benefit..." How to build self-help groups This booklet was published at about the same time as the Banking with the Poor book. It is small (12 pages) and contains concise details about the key roles of NGOs and self-help groups in facilitating credit delivery; guiding principles for the operations of self-help groups; and linking banks with self-help groups. It is very readable and is an ideal supplement to the Banking with the Poor book. Workshop Success in Kuala Lumpur The Second Regional Workshop of the Banking with the Poor project was held at the Asia Pacific Development Centre in Kuala Lumpur from 6 - 10 July 1992. Senior representatives from banks and NGOs from the eight participating countries, five observer countries and representatives of international organisations attended the meeting. A draft report based on case studies by banks and NGOs from the region was presented to the workshop. The meeting amended and adopted the report which made recommendations for the consideration of banks, governments, international development finance institutions, bilateral and multilateral donors as well as indigenous and international NGOs. A media release issued after the workshop stated that the implementation of these recommendations will revolutionise thinking about programs of action to alleviate poverty among the estimated one billion people in the world living in abject poverty, including some 800 million in the Asia Pacific region. Rather than relying on the "top-down" approach, the Banking with the Poor techniques emphasise self-reliance and providing essential credit for self-help and development. The eight participating countries whose representatives attended the workshop were Indonesia, India, Pakistan, Bangladesh, Sri Lanka, Nepal, the Philippines and Malaysia. The observers were from Cambodia, China, Vietnam, Papua New Guinea and the Solomon Islands. Representatives from a number of bilateral and multilateral agencies also attended. These included the Australian International Development Assistance Bureau (AIDAB), the German Agency for Technical Cooperation (GTZ), the Asian Development Bank (ADB), the Asian and Pacific Development Centre (APDC), the Asian and Pacific Regional Agricultural Credit Association (APRACA), the World Bank, the United Nations Development Programme (UNDP),the United Nations Capital Development Fund (UNCDF) and the Canadian International Development Agency (CIDA). Assistance to hold the workshop was received from AIDAB, the ADB and the UNDP. New Program Officer The Foundation for Development Cooperation has recently appointed Mr Mark Otter to the new position of Program Officer. Mark comes to the Foundation with more than nine years development experience, principally with the Australian International Development Assistance Bureau (AIDAB), the Australian Government's official overseas aid agency. With a degree in Asian Studies and Political Science from the Australian National University in Canberra, Mark is continuing studies in public administration at Masters level at the University of Queensland. Within AIDAB, Mark has worked on Australia's aid/trade policy, been the ministerial and parliamentary liaison officer and, most recently, has been the Country Program Manager for the Polynesian island countries of the South Pacific. He has had a two year posting to the Solomon Islands as well as deepening his appreciation of South Pacific matters with an exchange posting with the New Zealand Ministry of External Relations and Trade. Mark's appointment brings the full-time staff of the Foundation to three. He will work with the Executive Director, Dr John Conroy, and the Executive Secretary, Ms Jenepher Mackee on the continuation of Banking with the Poor as well as other Foundation activities. New Directions for the Project With the completion of the workshop and the publication of the book, the project has entered an advocacy phase. This will involve bringing the findings of the project to the attention of key institutions and individuals capable of influencing the delivery of credit to the poor. To be specific, the following actions are in progress:
In addition to attempting to directly influence official policy and programs to mobilise credit for the poor, the Foundation will:
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