FAO Puts Faith in Small Savings Funds

 This document has been made available in electronic format by
       the International Co-operative Alliance (ICA)

   |                                                      |
   |              Published to Coincide with              |
   |         the Fourth World Conference on Women         |
   |              Beijing, September, 1995                |
   |                 Issue No. 4, 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 Organization (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

"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

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

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

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.