___________________________________________________ This document has been made available in electronic format by the International Co-operative Alliance ICA ----------------------------------------------------- October 1995 **************************************** FAO Puts Faith In Small Savings Funds **************************************** Leila Deeb (IPS) reporting from Amman, Jordan More effort to reinforce savings systems, more consideration of their use by women and more flexibility in accepting loan collateral will help put more cash resources into small farms in the Middle East, say experts working in the region. The United Nations Food and Agriculture Organisation (FAO) came to Jordan earlier this month to pool the knowledge and ideas of their own experts, developing country agricultural banks and development agency specialists. High up on the list of priorities was the question of women and their access to safeguarded deposit accounts for their savings and better use of their collateral in lending. FAO consultant, Professor Dale Adams from Ohio State University in the United States, said agricultural banks were reforming to stress their services in keeping funds in savings deposit accounts, of which "quite a bit will come from women". Adams cited the Principal Bank for Development and Agricultural Credit (PBDAC) in Egypt, which has 900 village banks, and has extended loans of 1.2 billion dollars, but which is now readjusting itself to the savings sector. Village Gam'ia societies ~ short for 'Gam'ia ta'awuniyyah' or co-operatives ~ have a large female participation. "What is interesting is that women are often the leaders," Adams told IPS. He added that research shows that 90 percent of bank employees are members of co-operative credit societies, and that 15 percent of their incomes go into informal saving societies. "The surprise is that women are the main organisers there" he said. Adams said that the women employees of these rural banks in Egypt are often kept in the back rooms, but his argument is that there should be clerks to work with the women customers. "Women in most low-income countries have a less secure place in society. They have to build up relations with other people they can rely on. Also, some women need credit, and they often give their money to a money keeper, who is a person of high standing in the village, who promises to give it back to them when they need it." "This tells me that they need a better place to keep their money. I've been arguing that it is very important to have these deposits mobilised, as people need a place to save." Adams said the FAO was interested in finding ways of putting these savings to safer, more practical and more effective use. One of the major topics of discussion at the consultation, he added, was how to secure guarantees for the deposits. "You need to know how traditionally people fund themselves without help. Women know how to save. You do a woman a real favour by creating reliable systems." He argued that while existing community based women's credit unions were valuable, rural women could perhaps make more use of reliable cash deposit systems. "I never met a woman, even a desperately poor one, that didn't know how to save... rice, jewellery, sheep," said Adams. He said NGOs also needed to put more emphasis on deposits and savings rather than credit. Credit systems remain a key to development systems. Jordanian Minister of Agriculture, Mansour bin Tarif, Chairman of the Board of Directors of the Agricultural Credit Corporation told IPS in an interview that Jordan has run an agricultural credit system since 1962, and was aware of its importance as a development mechanism. The Jordanian network has since then issued short, medium and long-term loans, mainly to around 100,000 small farmers, worth around 180 million Jordan Dinars (260 million dollars). "Eight percent of Jordan's GNP comes directly from agriculture, as well as 19 percent of Jordanian exports, while 22 percent of Jordanians live from agriculture," he told IPS. Agriculture was a promising sector, and the government's goal was to increase self-sufficiency in food, create jobs, absorb and balance exports. Mohammad Rashrash Mustafa, head of the Near East and North Africa Regional Agricultural Association (NENARACA) said the consultation, held in the field instead of FAO HQ in Rome as is the normal practice, allowed them to track new trends. "The rich can get credit from anywhere," he told IPS. They planned a study emphasising the need for credit to go to small farmers. The network would also take realistic account of the kinds of collateral they could provide and the value of their farm stocks. He said this would involve credit based on the value of their inventories. Farmers who could not get good prices for their produce, should be allowed to store it with support organisations. These groups would then issue the farmers with receipts on which they can get credit: a system already in use in Egypt and Sudan, he added.