Poor must have access to financial services, say ICA

Access to finance and to financial services is essential to reduce poverty, the International Co-operative Alliance, has said. In a statement released to mark the recent International Co-op...

Access to finance and to financial services is essential to reduce poverty, the International Co-operative Alliance, has said.
In a statement released to mark the recent International Co-op Day the ICA said microcredit is one way of assisting poor and low-income communities gain access to these services.
"A co-operative approach to microfinance is based on encouraging self-help. It allows people to co-operate out of poverty as well as helping them from falling into poverty," said the statement.
"Co-operatives are among the most successful micro-finance institutions. In particular, savings and credit co-operatives, insurance co-operative and mutuals, and co-operative banks have assisted many millions of people to help themselves and build a more secure and sustainable future."
It added: "Savings and credit co-operatives (or credit unions) were pioneered by local leaders such as Friedrich Raiffeisen and Hermann Schulze-Delitzsch in the 19th century as a means to reduce poverty and indebtedness among small farmers and craftsmen in urban and rural areas.
"Today, they exist and strive in every region of the world, and have been able to adapt to very different socio-economic environments. Some co-operative banks in the industrialised world have become powerful financial institutions.
"Credit unions too have demonstrated that they can provide micro-finance services to poor and low-income communities in a sustainable way.
"Co-operatively managed micro-finance institutions enable the poor to pool their resources so that they can be used for productive investments and job creation within a sustainable future.
"The social control and democratic management style that is proper to co-operatives secure savings even at low levels and ensures repayment of loans.
"Co-operatives thus provide the women and men with appropriate financial solutions that enable them to collectively work towards improved living standards whether in low-income countries or in the highly industrialised."

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