Director,
T.E.(Terry)
Manning,
Schoener
50,
1771 ED
Wieringerwerf,
The
Tel:
0031-227-604128
Homepage:
http://www.flowman.nl
E-mail:
(nameatendofline)@xs4all.nl : bakensverzet
Incorporating innovative
social, financial, economic, local administrative and productive structures,
numerous renewable energy applications, with an important role for women in
poverty alleviation in rural and poor urban environments.
"Money is not the key that
opens the gates of the market but the bolt that bars them"
Gesell, Silvio The Natural
Economic Order
Revised English edition, Peter
Owen, London 1958, page 228
Edition 11:
One of the main challenges facing the execution of development projects throughout the world is the elimination of corruption and fraud. This is also true for projects in developing countries where it is particularly important that formal money seed funds be used for the purposes for which they are intended and that they actually reach their destination for the benefit of the people in the project area.
For
this project a detailed plan for the payment of the project funds has been
prepared.
Chart showing
bank structures.
Formal
money seed funds in Euro are paid into a Euro account with a leading
international bank in the name of the local NGO and strictly tied to the
project. Foreign funds payments for
the project are made directly from this account following the
authorisation and auditing procedures illustrated in the cash-flow and
bank-structures charts.
Formal
money funds required for payments in the (currency of the host country) are paid
and converted from the Euro account with the leading international bank
into a (currency of the host country) account with a leading national
bank in the name of the local NGO
and strictly tied to the project. Larger (currency of the host country) payments
are made directly from this account following the authorisation and
auditing procedures illustrated in the cash-flow and bank-structures
charts.
Funds
for smaller (currency of the host country) payments are transferred from
the (currency of the host country) account with a leading national bank
to a (currency of the host country) account strictly tied to the name of
the project with a local bank in the project area. This account is directly
accessible by the project coordinator. For this project, the auditing committee
(has, has not) nominated an executive auditor to co-sign sur place outgoing
payments with the project coordinator.
The
above scheme means that:
a)
Small
everyday payments for up to (amount) in (currency of the host country) are paid
out of a (currency of the host country) account in the name of the project with
a local bank in the project area. Formalities for these payments are kept to a
minimum. They are made by the project coordinator (with co-signature sur place
of an executive auditor nominated by the auditing commission.) The local fund is replenished from time to time at the
request of the project coordinator (with co-signature sur place of an executive
auditor nominated by the auditing commission) from the project’s (currency of the host
country) account with a leading national bank ) by the local NGO on decision of
the project monitoring board nominated by the NGO.
b)
Larger
payments for up to (amount) in (currency of the host country) are made out of a (currency of the host country) account
with a leading national bank in the name of the local NGO and linked to the project. These
payments are made on the instruction of the project coordinator (with co-signature sur place of an executive
auditor nominated by the auditing commission) by the local NGO on decision of
the project monitoring board nominated by the NGO. The national fund is replenished from time to time at the
request of the project coordinator (with co-signature sur place of an executive
auditor nominated by the auditing commission) from the project’s Euro account
with a leading international bank by the local NGO on decision of the
project monitoring board nominated by the NGO.
c)
Foreign
payments in Euros are made out of the Euro account with a leading
international bank in the name of the local NGO, linked to the project. These
payments are made on the instruction of the project coordinator (with
co-signature sur place of an executive auditor nominated by the auditing
commission) by the local NGO on decision of the project monitoring board
nominated by the NGO.
No
payment for the project can be made by the local NGO without the request of the
project-coordinator (with co-signature sur place of an executive auditor
nominated by the auditing commission). No payment for the project can be made
under b) and c) by the project
coordinator (with co-signature sur place of an executive auditor nominated by
the auditing commission) without a
decision of the project monitoring board nominated by the
NGO.
The
activities of the project monitoring board nominated by the NGO are placed under
the on-going control and inspection of the auditing commission. The activities
of the auditing commission are subject to control by the independent
auditor.
The
Cooperative Local Development Fund.
The
people in the project area are poor and plagued by lack of formal means (money)
necessary for the transfer of productive goods and services . The initial formal
money seed capital (usually less than Euro 100 per person) will therefore has
come from donors (in the form of a grant, in the form of an interest-free loan
repayable over a period of ten years).
The
users will pay a monthly fee into their own Cooperative Local Development Fund
which they manage themselves through the project structures they create in the
early phases of the project. The monthly contributions are usually between Euro
0,60 and Euro 0,75 per person, or approximately Euro 3 -4 per month for a family
of five. Cooperative Local
Development Fund is managed by the project’s Central Management Unit, which is
set up during an early phase of project execution.
Formal
money seed capital can be either by of grant or by way of interest-free
loan.
The
difference to the project between initial seed capital by way of grant and
initial seed capital by way of interest-free loan funds becomes apparent only at
the close of the first ten years’ operational cycle. In case of grant,
self-financed project extensions to project structures can be made sooner and/or there is no temporary
reduction in the amount of funds available to finance interest-free
micro-credits. In the case of an interest-free loan, project extensions will
take longer to finance and the funds available for interest-free micro-credit
finance will have to build up again from zero.
The
money in the Cooperative Local Development Fund gradually builds up over the ten
years’ period until it reaches the amount originally granted or loaned
interest-free. This money is re-cycled interest-free for use as micro-credits to
develop local production capacity.
(The
initial seed capital is in the form of an interest-free loan. The loan is paid
back in a single lump sum at the close of the ten years’ period. The capital in
the Fund drops temporarily back to zero. Since users continue to make their
monthly contributions into the Cooperative Local Development Fund, the capital
in the fund builds up again during the second period of ten years, and the cycle
of interest-free micro-credits builds up again as it did in the first period of
ten years. At the close of the second period of ten years, capital funds are
available for the extension or replacement of capital investments. Since users
continue to make their monthly contributions into the Cooperative Development
Fund, the capital in the fund builds up again during the third period of ten
years, and the cycle of interest-free micro-credits builds up again as it did in
the second period of ten years, and the system continues in a sustainable way
indefinitely. )
(or)
(The
initial seed capital is in the form of a grant. The capital collected in the
Cooperative Local Development Fund does not need to be repaid at the close of
the first ten years’ period. The project structures, which are chosen and run by
the people themselves, may at that point choose to use part or all of the available capital to extend project structures. They may choose to maintain
a large capital in the Fund to finance interest-free
micro-credits.)
The
monthly payments made by users into
the Cooperative Local Development Fund
are used:
-
where
the seed funds are in the form of an interest-free loan, to repay the loan
itself at the expiry of the first ten years’ project period.
-
to
pay on-going administration and maintenance costs. This money pays the monthly
fees of the project coordinator and the costs of fuel and imported materials of
maintenance and inspection personnel and the monthly formal money payments made
to the tank commissions. The project management will, on the advice of the well
commissions, apportion the funds.
-
to
set up reserves for long term maintenance and replacement of capital goods.
These funds will also be re-cycled for micro-credits but managed so that the
capital is available when it is needed.
Apportionment
by the project management of the formal money income paid by the users each
month will vary from project to project. Normally about 80% will usually be held
in the Cooperative Local Development Fund for capital repayment, where
necessary, and to finance interest-free micro-credit loans. Of the remaining
20%, about 55% of 20% can be
expected to be used to cover formal cost content of administration, maintenance,
and spare parts, 20% of 20% to cover a monthly formal money allowance for the
tank commissions, and 25% of 20% is available to cover loss of or damage to
installations and unforeseen costs.
Formal
money costs of setting up the social and services structures foreseen in each
project application are paid out of the formal money project capital. Formal
money costs of setting up the productive services structures foreseen in each
project application are first paid out of the formal money project capital and
then repaid by the individuals, families and cooperatives involved into the
Cooperative Local Development Fund and recycled for interest-free micro-credits
as already described above. The period for repayment of these interest-free
capital loans will vary
substantially from project to project and from case to case. It must in any case
be reasonable. The formal money necessary to repay the capital is obtained
through sale of an agreed part of the production for formal money outside the project area
until the capital has been repaid.
By
way of example, the formal money cost of the gypsum composite production units
and the mini-briquette production units e is usually covered by interest-free
loans repayable over 3-5 years.
Users
should also benefit from large savings in their traditional expenses. Existing
formal money costs of purchasing drinking water, recycling services, petroleum
for lighting, batteries, and especially fuel for cooking will be eliminated. The
savings for cooking fuels will come from using high efficiency stoves made from
gypsum composites and the local production of bio-mass for mini-briquettes for
fuel. Provision of drinking water
under the project will avoid the need to purchase expensive water from vendors
especially in poor urban areas. Waste re-cycling under the project will produce
savings by creating value added from resources currently unused and because
payments for collection and handling of the waste will be kept inside the local
economy.
Formal
money costs of setting up the social and services structures foreseen in each
project application are paid out of the formal money project capital.
The
following drawings and graphs form an integral part of this project proposal.
GRAPH SHOWING
DEVELOPMENT OF MICRO-LOANS .
THE INTEREST-FREE LOAN
CYCLE .
HOW
THE ORIGINAL SEED LOAN MONEY IS USED.
GRAPH SHOWING
TYPICAL QUARTERLY EXPENDITURE.
DETAILED TYPICAL
EXPENDITURE FIRST QUARTER.
DETAILED TYPICAL
EXPENDITURE SECOND QUARTER.
DETAILED TYPICAL
EXPENDITURE THIRD QUARTER.
DETAILED TYPICAL
EXPENDITURE FOURTH QUARTER.
DETAILED TYPICAL
EXPENDITURE FIFTH QUARTER.
DETAILED TYPICAL
EXPENDITURE SIXTH QUARTER.
DETAILED TYPICAL
EXPENDITURE SEVENTH QUARTER.
DETAILED TYPICAL
EXPENDITURE EIGHTH QUARTER.
Forward: Health
club structures.
Back: Second phase
of project.
List of drawings and
graphs.
Typical list of maps.
List of key
words.
List of
abbreviations used.
Documents for
funding applications.
