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
and
"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,
The following drawings and graphs form an integral
part of this project proposal. They give an idea of what the results of the
Moraisian organisational workshops setting the structures up might produce.
DRAWING OF INSTITUTIONAL STRUCTURES.
GRAPH SHOWING DEVELOPMENT OF MICRO-LOANS .
THE INTEREST-FREE LOAN CYCLE.
THE LETS SYSTEM STRUCTURES.
HOW THE ORIGINAL SEED LOAN MONEY IS USED.
The micro-credit
system will be set up by the Moraisian organisation workshop conducted for the
purpose.
The proposed micro-credit system will be different from those formed up
till now. The loan capital repayments and longer term reserves within the
project itself will be used to finance the micro-credit system. This is
possible because the money is already available for multiple re-cycling,
interest-free. When, at the close of the ten years' loan repayment period, the
original project capital is repaid, the users will continue their monthly
contributions to build up capital for system extensions and to replace the
system hardware after 20-30 years. This money, which will build up to a
considerable sum, also becomes available for interest-free micro-credits within
the project area until it is needed.
Final repayments of blocks of micro-credits will be coordinated so that
money for long term capital investment purposes (system replacement and
extensions) will be available when it is needed. This way, money for the
micro-credits granted is generated by the users themselves within the framework
of the project and those micro-credits belong to the users. They are
interest-free to ensure they continue to re-circulate within the local economy.
The Cooperative Local Development Fund may but need not necessarily
charge a set fee expressed in the local money LETS for each transaction to
cover its costs. The Cooperative Local Development Fund’s local money fee, if applicable, will be set before the system
starts working. The fee will be expressed in the local LETS currencies to stop
leakage of money from the local economy. In any case general management of the
system and costs for collection of payments and distribution of information
will all be paid for in the local LETS currencies.
The Cooperative Local Development Fund will thus itself become a regular
member of the local LETS system. It could, for instance, use the LETS credits
it derives from its banking services to buy local products and services and
distribute them outside the system in exchange for formal currency.
The local money costs of LETS representatives at tank commission level
are distributed amongst the members served by the tank commission. The local
money costs of LETS representatives at well commission level are distributed
amongst the tank commission served by the well commission. The local money
costs of LETS representatives at project level are distributed amongst the 66
well commissions.
The purpose of the planned Micro-Credit system is to ensure that
individuals or cooperatives wanting to expand their production who have no
access to formal currency to pay for their capital investment can get
interest-free micro-credit loans to boost the local economy. The Micro-credit
system is therefore applied only to micro-project investment which needs to be
made outside the local currency exchange (LETS) systems.
The pay-back time for the interest free loans will vary from case to
case. Some investments will generate more goods and services that can be sold
outside the local LETS currency area than others. The formal currency so earned
can then be used to repay the loans. The sale of some production in the formal
economy will be a condition of the granting of the Micro-Credit loan. The speed
at which the formal loan currency can be recovered will determine the payback
period, which could therefore be anything between a few months and a few years.
The loan repayments must be realistically possible. The system is cooperative
and interest free and designed to enhance the general welfare within the
beneficiary communities.
As with the Grameen bank systems, any person or cooperative group
wanting a Micro-Loan will be expected to produce three or four friends who
agree to be jointly and severally liable for the periodic loan repayments, and
to make sure they are made on time. Since the Micro-credits are essentially
self-financed by the communities through their communal funds, the funding
priorities must be left to the communities themselves. This is especially so
where potential conflicts of interest arise because there is not enough funding
immediately available to meet all requests for assistance. Meetings to discuss
members' proposals and further developments with on-going projects will become
a feature of the social life of the communities. Since it is expected that many
of the beneficiaries under the scheme will be women and women's groups, women
will need to have full representation during such meetings. One of the basic
goals of the formation of the Community Health Clubs foreseen is to use them as
a launching pad to create women's groups. These groups will give women the
chance to discuss their needs, develop their priorities, and make submissions during
the Micro-Credit meetings. The Health Clubs should also be able to ensure that
women participate en bloc at the Micro-Credit meetings.
Rules for the
organisation of the Micro-Credit meetings will be set up during the workshop
with the full participation of the beneficiary communities.
These rules must lay
down the general principles behind the system. These would, for example,
include:
1) All loans are to
enable the beneficiary to extend his/her income by producing more goods and
services
2) The goods and services must benefit the general interests of the community
and encourage exchanges under the local LETS systems.
3) Some of the goods and services must be saleable outside the LETS systems to
earn formal currency to repay the micro-loan.
4) The Micro-Credit loan must promote the rapid circulation of formal money
within the beneficiary communities. For example, using formal currency to build
a clinic or hospital would not qualify for micro-credits because the capital
invested cannot be re-circulated. On the other hand, buying equipment for
testing water quality (foreseen in the project) would qualify, as the formal
currency cost can be recovered by charging in formal currency for water
analyses conducted for users outside the project area.
5) Special priority will be given in the first instance to micro-loans to start
the collection and transport of compost, urine, and grey water, and establish
the recycling centres that will collect, store, and export non-organic waste
products from the project area.
One Moraisian workshop will be held to prepare
the Local Cooperative Development Fund structures.
Indicative participation :
The Moraisian trainers
A member of the project coordination team
Consultant Terry Manning
2 Representatives of the ONG Project New Horizons for Kiogoro
Representative of the Finance Ministry
Representative of the Rural Development ministry
At least 5 observers (possible coordinators for future projects)
At least 6 qualified persons, 3 inidicated by the ONG and 3 by the project
coordinator
66 persons indicated by the well commissions, interested in participating with
responsibility for credit arrangements at well commission level.
297 persons, indicated by the tank commissions,
interested in participating with responsibility for credit arrangements at tank
commission level.
Duration of the workshop: about six weeks.
The Workshop will be expected to produce the
following structures:
a) Definition of the social form
- statutes
- rules
- professional and administrative structures
- financial aspects
- relations with the LETS local money systems
b) Physical aspects
- land
- office
- safety
- communications
c) Financial aspects (Definition of initiatives
at each structural level. How much money is to be distributed at each level?)
- funding of initiatives at general project
level (recycling structures, important productivity initiatives, public works)
- funding of initiatives at intermediate, well commission, level
- funding of initiatives at local tank commission level
- funding of socially based initiatives (clubs, interest groups etc)
- traditional banking activities
a) Central structure
b) De-centralised structure
- Preparation operators
- Meetings at tank commission level
c) Coordination
- With the Cooperative for Kiogoro
- With LETS structures
- With tank commissions
- With project coordination team
d) Financing of specific projects
- Relations with financiers
e) Communications structure
-Vertical, at project level (NGO Cooperative for Kiogoro, project coordination
team, transactions operators, tank commission level operators, end users)
Commercial, radio, website
Next file :
06.26 Creation of the gypsum composite production
units.
Back to:
06.24 Creation of the local money LETS
structures.
