NGO Another Way (Stichting Bakens Verzet), 1018 AM
SELF-FINANCING, ECOLOGICAL,
SUSTAINABLE, LOCAL INTEGRATED DEVELOPMENT PROJECTS FOR THE WORLD’S POOR
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FREE E-COURSE FOR DIPLOMA IN INTEGRATED DEVELOPMENT |
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Edition 12 : 02
November, 2006.
Edition 13 : 06 October,
2011.
04.16 INSURANCE AND FORFEIT IN THE FORM OF GIFT IN
CASE OF LOSS OR DAMAGE TO CAPITAL STRUCTURES
The political situation in the project area is (very stable, fairly
stable, unstable). Long-term political stability at least over the first ten
years’ operational period necessary for integrated development (and
interest-free loan repayment) cannot be guaranteed.
(While the capital structures installed are
insurable against loss or damage by Act of God such as lightning, hurricanes,
or earthquakes, it is not possible to insure them against loss or damage
deriving from causes such as Act of Political and Military Authorities, civil
war, commotion, rebellion, and strikes. The cost of insurance against such
risks would be so high that it would constitute a major on-going financial
leakage from the project area, which is just one of the major problems the
project is designed to stop. )
What happens in case of loss of or damage to
the capital project structures (where applicable, before repayment of the
interest-free seed loan after ten years) must therefore be clearly addressed
during project funding.
The beneficiaries of this project are by
definition poor and the loss or damage in question derives from causes entirely
beyond their control. To require these poor people to repay (a loan after ten
years for) capital structures they have lost for reasons beyond their control
is in profound contradiction with the short term and long term goals of the
project. The external funding agency (has, has not) access to forms of
insurance available to cover funds at risk in projects in developing countries.
It (has, has not) undertaken to ensure, at its own cost and by way of gift,
that funds for this project are insured.
(Where applicable : Since insurance is not
available, the external funding agency has accepted that in the case of loss of
or damage to project structures deriving from causes beyond the power and
control of the users the interest free loan be converted into a gift so that
users are freed from their contractual obligations. )
Normally, at the time the (uninsured) loss of
or damage to the capital structures occurs, users will have (contributed funds,
paid a part of the loan) into the Cooperative Local Development Fund. The money
which has already been collected in the Cooperative Local Development Fund at
the time the loss of or damage to the capital structures occurs:
((a) Must be used immediately to reinstate the capital
goods lost or damaged.)
((b) Has to be repaid to the lenders at the end of the original ten years'
interest free loan period. )
((c) Has to be repaid immediately.)
((d) Will, subject to analysis of the current political situation, be
integrated by a further loan to enable complete reinstatement of the capital
structures so that the project application can make a re-start. )
Forward: Circulation of funds.
Back: The effects of
inflation.
List of
drawings and graphs.
Typical list of maps.
List of key
words.
List of abbreviations used.
Documents
for funding applications.
Back to:
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,
“Poverty is created scarcity”
Wahu Kaara, point 8 of the Global Call to Action Against Poverty, 58th annual NGO Conference,
United Nations,
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