CVECA
Encyclopedia
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 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
intermediaries inspired by external technical support. Structurally they lie between informal
financial market actors like moneylenders, collectors, and ROSCA
s on the one hand, and formal actors like microfinance institutions and bank
s on the other. Other organizations in this transitional zone in financial market development include self help groups
, ASCAs
, rural credit co-operatives, village banks and financial service associations.
. 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
for poor rural populations.
region of Mali
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. The networks in Mali are now sufficiently developed to access refinancing through the Banque Nationale de Developpement Agricole, the rural central bank.
CVECAs are member-based microfinance
Microfinance
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
intermediaries inspired by external technical support. Structurally they lie between informal
Informal economy
The informal sector or informal economy as defined by governments, scholars, banks, etc. is the part of an economy that is not taxed, monitored by any form of government, or included in any gross national product , unlike the formal economy....
financial market actors like moneylenders, collectors, and ROSCA
Rosca
Rosca is a Spanish and Portuguese bread dish eaten in 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-style crack ring."Roscas de reyes is an oversized version colored with candy...
s on the one hand, and formal actors like microfinance institutions and bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s on the other. Other organizations in this transitional zone in financial market development include self help groups
Self-help group (finance)
A self-help group is a village-based financial intermediary usually composed of 10–20 local women. Most self-help groups are located in India, though SHGs can also be found in other countries, especially in South Asia and Southeast Asia....
, ASCAs
Rosca
Rosca is a Spanish and Portuguese bread dish eaten in 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-style crack ring."Roscas de reyes is an oversized version colored with candy...
, 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 monetizationMonetization
Monetization is the process of converting or establishing something into legal tender. It usually refers to the coining of currency or the printing of banknotes by central banks...
. 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
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
for poor rural populations.
Progress
Beginning in the DogonDogon people
The Dogon are an ethnic group living in the central plateau region of Mali, south of the Niger bend near the city of Bandiagara in the Mopti region. The population numbers between 400,000 and 800,000 The Dogon are best known for their religious traditions, their mask dances, wooden sculpture and...
region of Mali
Mali
Mali , officially the Republic of Mali , is a landlocked country in Western Africa. Mali borders Algeria on the north, Niger on the east, Burkina Faso and the Côte d'Ivoire on the south, Guinea on the south-west, and Senegal and Mauritania on the west. Its size is just over 1,240,000 km² with...
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. 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 unionCredit unionA credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
- microfinanceMicrofinanceMicrofinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
- ROSCARoscaRosca is a Spanish and Portuguese bread dish eaten in 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-style crack ring."Roscas de reyes is an oversized version colored with candy...
- self-help groupSelf-help group (finance)A self-help group is a village-based financial intermediary usually composed of 10–20 local women. Most self-help groups are located in India, though SHGs can also be found in other countries, especially in South Asia and Southeast Asia....