Mexico Microfinance Projects

Micro is small and finance is money. The causal definition of microfinance is small business. This concept was basically introduced for poor people in 1971 by Dr. Muhammad yunus(Bangladesh). Talking about Micro-Finance projects; popular one are saving credit Act and launching of US $150 million program the Mexican government launched compain to alleviate poverty and increase income-generating program for poor.

The Savings and Credit Sector Strengthening Program, BANSEFI

The Savings and Credit Sector Strengthening Program, implemented by the National Savings and Financial Services Bank (BANSEFI), is building the capacity of more than 400 “Popular savings and credit institutions” (or EACPs by their Spanish acronym) to meet new legal and regulatory standards and offer safer, more efficient financial services. EACPs target almost 3 million users who are generally among the poor and lower-income groups and have no access to commercial banking sector 25 percent of the population in the Mexico fall in this range. BANSEFI is developing an information system to link EACPs (those that elect to participate) to its network federations and confederations, the banking supervisor, and BANSEFI itself. This will offer retail services. BANSEFI also focus on the development of a voluntary internet-based network of savings and credit institutions called “L@Red de la Gente,” or “the People’s Network.” L@Red links BANSEFI’s 551 branches to more than 180 offices of 19 participating institutions, and creates an expansive network of more than 730 branches. Approximately 750,000 savings accounts have been opened as a new way to transfer government subsidies through L@Red de la Gente. As of December 2003, for example, 78 percent of the 633,974 people who received transfers through L@Red from Oportunidades had savings accounts with positive balances in branches of L@Red. the network also channeled more than US $53.6 million in remittance payments, sent from abroad to friends and family members. L@Red de la Gente offers accounts that link different savings and investment products.

Reaching the Rural Marginal Areas, SAGARPA; From the same strategy existing EACPs` secretariat of agriculture ,Livestock ,Rural Development ,Fisheries, and Nutrition (SAGRAPA) is now working in 13 states to set up a new savings and credit institutions. SAGARPA aims to bridge the gaps in knowledge, understanding, and interaction between these financial service providers and the communities of poor and mostly indigenous people living in the areas they serve. A survey of Mexico’s marginal rural areas in 2000 showed that just 2.5 percent of households had access to credit from a financial institution, and less than 6 percent used formal financial savings instruments. They generally pay high transaction costs and commissions to receive remittance payments.To combat these trends, SAGARPA began to implement the Rural Microfinance Technical Assistance Project (or PATMIR in Spanish) in 2001 to expand the network of EACPs into Mexico’s poor and isolated rural communities. The program has now expanded to three more regions of the country and is expected to sustainably integrate more than 80,000 people from Mexico’s poorest, most marginalized groups into the financial system before its completion in 2007. Program focuses on cultivating awareness, trust, and commitment—between the new members. PATMIR helps the EACPs to incorporate new ways; they can hire multi-lingual staff to promote their services and introduce personal digital assistants and mobile banking to make savings more convenient and attractive. In 2003, more than 4.2 million families received transfers through one federal safety net program alone, and US$13.2 billion in remittances flowed into the country from Mexicans living and working abroad.

Implementation Process. In 1999, the Secretariat of Finance and Public Credit (SHCP), the National Banking and Securities Commission (CNBV), the Central Bank of Mexico (BANXICO), and the National Savings Bank (PAHNAL) initiated a process of consultation with legislators, sector institutions, and the World Bank on the development of a new legal and regulatory framework for popular savings and credit institutions. In rural parts of the country, where the government had recently put forward major initiatives  by better integrating markets and targeting capitalization programs, especially at poorer groups in the rural sector.

The Scope of the Initiative; The US$150 million program, which BANSEFI initiated in 2002 in coordination with other public sector agencies. The Rural Microfinance Technical Assistance Project, or PATMIR, provides training in basic principles of household finance and participation in financial institutions for groups and individuals in marginal rural Communities.

Implementing BANSEFI and Progress to Date; A census of institutions was initiated in September of 2001 to determine more precisely the number and size of entities operating in the sector, their locations, and affiliations with other such organizations, if any. This information was used to help gauge the extent—and cost—of the program of technical assistance needed to strengthen the intermediaries. BANSEFI has recruited international organizations specialized in providing technical assistance to savings and credit institutions and their sector organizations began in 2001. Action plans have now been formalized for 381 institutions’, of a total of 400 that are expected to participate in the program. The organizational basis of the commercially- oriented network has already been formed with the establishment of “L@Red de la Gente” (“The People’s Network”), a voluntary internet-based alliance of popular savings and credit institutions and BANSEFI. L@Red has already linked BANSEFI’s 554 branches.

Implementing SAGARPA and Progress to Date; As of January 2004, PATMIR had so far strengthened and increased the outreach capacity of 41 savings and credit institutions and their branches and providing more than 10,000 clients with access to financial services from new branches or institutions, and improving the financial institutions upon which nearly 24,000 people rely.  The program now has operations in three more  regions of the country and is expected to sustainably integrate more than 80,000 people from Mexico`s poorest, most marginalized groups into the financial system before it finishes in 2007.PATMIR works extensively with individuals and groups in these rural. PATMIR helps the EACPs incorporate new ways of attracting and responding to marginalized clients by hiring multi-lingual staff to promote their services and introducing personal digital assistants and mobile banking to make savings more convenient and attractive.

Benefits for Institutions and clients ; Efficiency gains will accrue to the EACPs from staff training, upgrading internal controls, and building credit appraisal and risk management capacity, and through the services provided by BANSEFI and network organizations. The alliance BANSEFI has created with sector institutions through L@Red de la Gente (which currently includes more than 730 participating branch locations) is expected to include more 3,000 points of service by 2008. As of December 31, 2003,L@Red de la Gente had distributed payments from federal health, nutrition, education, and agricultural production programs to more than 1.5 million beneficiaries, and the number is expected to grow to 3.3 million by the end of 2004.By receiving transfer payments through L@Red, poor beneficiaries are introduced to financial institutions and encouraged to participate as members or clients

Sum up of all of above, Mexican micro-credit program BANSEFI and SAGRAPA`s(2001) main focus is not only to bring the poor in financial system but also teaching them how to better manage the cash resources they already have. From the BANSEFI and SAGARPA programs we concluded the following facts; Government intervention can effectively increase access to financial services for low income households and businesses by getting the regulatory framework right, building the institutional capacity of financial institutions, and subsidizing the deployment of modern technology to increase the efficiency of service providers. Packaging the development of adequate regulations and supervision, institution capacity building, and technological infrastructure is more likely to yield sustainable results. Outreach expansion efforts among the poor in marginalized rural areas have much better long-term impact.

Social capital and Pakistan

Social capital refers to a culture of trust and cooperation which makes collective action possible .Putnam (political scientist and professor of public policy) (2002) says it is ability of community to develop the ‘’I’’ into ‘’WE’’.  Social capital sustains social cooperation.  The notion of social capital has been around for decades. Putnam links social capital with civic culture.  Social capital creates the environment of bonding networks of people who came from similar background and works as a bridge between dissimilar types. Our values, institutions and practices participate in shaping social capital of society.

 Pakistan is Islamic state so has its own values, institutions and practices. We see this in Pakistan’s constitution 1956 the ceremonial post of Head of state (or president) was reserved for Muslims.   Despite the rejection of this act in 1962 the status remained same in 1973 constitution and onwards.  Pakistan is included in those countries where state becomes first and the process of building a nation later on. Pakistan, informal institutions e.g. sitting of a people together in evening (village chupaal) is a great source of shaping social capital.   Formal institutions e.g. our textbooks cultivates how leaders got independence, army role, Islamic heroes, concept of jihad. These all become a source of binding and bridging nation.   Newspapers, president speech, cricket matches, reunions, family get to gather etc also a big source of creating social capital.

This social capital in other words also creates tolerance and relationship of trust .In  Pakistan role of social capital is very strong that can seen  in the relationship of trust among masses where   masses also scarify  personal needs for the mutual goal.  But after the independence the feeling of sacrifice and tolerance trust is becoming low.   The main cause of this falling social capital ratio seems to be the feudalism in Pakistan.  But the war of 1965 again became strong social capital of masses.  The 1970 is dark phase of Pakistan because of linguistic ethno political issues   broke down the state and East Pakistan become Bangladesh.   But after Gen yaha  (1971) Z.A. Bhutto  (1973) takes the credit of building strong social capital via 1973 constitution that was a source of binding  and bridging of nation.  The nation saw democratic phase but it doesn’t last for a long period. And again Marsh law imposed. And Gen Zia becomes the sixth president of Pakistan. But unfortunately the Zia’s regime is unable to gain the trust of masses also fails to build social capital (in other words failed in binding similar and bridging  gap between dissimilar backgrounds)  moreover   some people assumed Islam as burden ,again      1985 to 1999 the nation get the pleasure of enjoying democracy .  This periods to some extent helps in creating social capital, again 1992 world up created strong environment of social capital.  kargil war 1999 created the environment of binding and bridging.  Although the feudal culture remained hindrance in developing social capital in real words as it creates hate among poor and rich.   After this little span of democracy, 1999- 2005 was Gen Muhsraf regime.  In that period Pakistani nation also had weak social capital e.g. amendment in Hudood ordinance, earthquake, Lal masjid conflict.  But in his regime in Pakistan saw a lot of media channels .This change was expected to be a tool for nation building.   Pakistani nation became a heavy viewers of media that suck the communication among people thus reduced the social capital. Zardari’s regime 2008- still, in this nation is not on the road to social capital development. This   regime is in other words is called a restless and disputed regime.  This regime that came in to being by uniting the nation because of assassination of Banzir Bhutto (daughter of Z.A. Bhutto) .  But unfortunately, this regime fails to sustain this mutual cooperation .Moreover this widened poor and elite class and created hatred among nation.  Last year 2010 Pakistan, caught in natural disaster of flood. Again nation become strong once again on this disaster and interest of nation and government is mutual once again. But this cooperation was not as strong on 2005 earthquake.  But still we have some things common; our mutual interest and we work as nation.

Sum of all above, we can say this social capital can bring change in society.  Pakistani nation become mutual or gain social capital in the period of holy month Ramzan, Namaz, Zakat, Hajj. These all give us the lesson of how being a nation we become strong and practice the Putnam concept of social capital.   But for the practicing the social capital in Pakistan feudal system, Hippocratic attitude of governments should be abolished. The political leaders should govern as father (treat the nation equally).  The policy makers should point out the importance of social capital with physical capitals, also celebrate different days relating to Pakistani history like coming event 23^rd March, 6 Spet, and others, moreover Prime minister and President should hold informal meeting with nation with no obstacles. Use media in promulgating social capital or civic culture.  All of above suggestions and many others can be used for the development of nation building that which is possible via social capital. 

CULTURE OF LUST

As the soil ,however rich it may be ,cannot be productive without cultivation, so the mind without culture can never produce good fruit.                                                      Seneca(Roman philosopher)

Variety of culture exists but the casual form of culture that impact us a lot is what we inherit via our parents, ancestors, home other is what indirectly impact us like our friend’s behavior ,academic institutes, communication centers e.g.  TV, newspapers. The indirect culture has made a strong roots in our mind and reflects our lives .  Sometimes  it overwhelmed our direct inherited culture. The brief overview that we see in our Pakistan is like this that are more likely in the form of TV .  Now-a-days

it become a great source of prevailing ‘’Culture of lust’’.

Send  Sms  to write (message) (ur name) send it to 000. And get the designer’s outfit ,designer’s earnings, makeup kit , etc. This is usual format  of our shows e.g. so-called entertaining morning shows, cooking shows etc. Also cooking channels that made daily lots of dishes . They always tried to make people happy by entertaining.  But they entirely forget this point ,while entertaining poor masses of  Pakistan; injected the lust of good items. That they can’t afford or even they cannot visit those shops where these items are being sold.

Pakistan as we all know suffering so many disorders e.g. inflation, religious extremism, economic recession and moreover result is discriminate the middle class. In Pakistan for every single person it is difficult to meet its ends.  In this environment our media playing the  role of added fuel on fire .

Not a single person on media or program who preaching the people about patience ,saving containment. In past, our own home channel  started a program that ruined by ‘’Ashfaq Ahmad’’ who told how our life  become easy and full of containment .

But now Alas! Everyone is preaching or injected how you get your desired thing without buying. This is cultivating inferiority complex. Like organizing ,celebrating spring events and wedding weeks in different shows.  But on other side on very small scale few new born channels trying to do some pious work like tie knot poor couples  or trying to create awareness in to the masses how you run your home better in inflation.

But the effect of this is on low scale . We always blame government who murdered our basic needs. But we never think about 16’’,20’’, 30’’, or flat box , who now become our family member t that we buy for the sake of entertainment, is actual murder not a murder a assassinator of our morals ,our Islamic, Sweet cultural values.

In past we have only one channel now we are variety of channels on them variety of thousands programs running at a time.  That build culture of lust in that period that broke all record of inflation and economic recession . Everyone is running in this water of lust.

In a nutshell, culture is what we build that automatically enter in our future genies.  They only see sms culture which has inculcate them a lustful human being. You don’t think that this lust needs to be stopped . We should boycott all those things that creating restless in our Pak  nation.