Establishment of Development Banks in Developing Countries:
Favourable and Unfavourable Factors
A S S E T S
- Endogenous Factors
- Cultural and Social Factors
- strong social cohesion
- existence of traditional groups
- existence of organized professional groups
- self-discipline
- human confidence
- tradition of foresight
- motivation to change the future
- aspiration to produce more
- innovative solutions attempted by the population
- creation of banks requested by population
- Economic Factors
- existing monetary economy (savings)
- habit of dealing with money/credit
- existence of investment projects
- action should complement daily life
- sufficient monetary income/sources
- Exogenous Factors
- Physical Environment
- disruption of the system: drought, catastrope
- Economic Environment
- existing monetary economy
- Institutional Environment
- favourable political-administrative environment
- lack of appriciative banking services
- village bank not subject to banking laws
- governmental withdrawal
- government decentralization
- Organizational Environment
- sufficient continued presence of outside support to allow integrated approach
- problem of security of money
O B S T A C L E S
- Endogenous Factors
- Cultural and Social Factors
- non-awareness of existing exploitation (money lenders)
- few common community activities
- illiteracy
- Exogenous Factors
- Physical Environment
- climatic hazards
- Economic Environment
- dependece on agricultural activities
- Institutional Environment
- banking laws
- lack of development banks for linkages
- risk of governmental ascendancy
- Organizational Environment
- heterogeneous support systems with different approaches
- imposition of oints ofo view from outside
- self-control of population undermined by supervision
- objectives of donor agencies: to spend quickly and abundantly
- Source:
- Bedard, Guy (ed), Savings and Credit as Instruments of Self-Reliant Development of the Poor. Proceedings of an International Workshop held in Feldafing, January 25-28, 1988. Bonn: Deutsche Stiftung fur internationale Entwicklung (DSE), 208 pp.
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Hari Srinivas - hsrinivas@gdrc.org
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