Village Banking Model Helps Alleviate Poverty
7 October 2015 at 11:00 am
An innovative village banking model, designed to help break the poverty cycle, has delivered greater social outcomes than initially expected.
The three-year, $240,000 Myanmar Teachers Project – run by the Australian Credit Union Movement’s Not for Profit organisation, the CUFA – has helped more than 40,000 people, according to the two-year progress report.
Funded primarily by the Teachers Mutual Bank, village banking is described as a sustainable funding model that supports local business by providing loan capital for 20 community credit unions with interest reinvested in local projects. Only four per cent of the Myanmar population has a bank account.
“The village banking model is helping small and remote communities break the cycle of poverty,” Corporate Social Responsibility Strategist at the Teachers Mutual Bank, Corin Millais, said.
“Although the loans are small, usually around $2,000, they allow people to build businesses, build an income and create a better life for themselves and their family.
“Interest from these loans goes towards providing teachers with viable salaries. One for the best weapons for fighting poverty is education, and by supporting teachers we see the positive effects flow throughout the community.”
Teachers Mutual Bank said to date the project has funded 153 teachers, including 137 women, and provided free education for 4,224 students in 32 rural schools.
Managed by local village financial co-operatives, the Bank said almost 4,000 loans at three per cent interest a month have directly benefitted 27,350 people in the community and 41,475 indirectly.