National Traveller MABS
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National Traveller MABS |
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Synopsis
This
dissertation explored the viability of interest free credit unions for
marginalised communities. My interest in this subject stems from the belief
that access to credit is one of the vital tools of empowerment and as such
is essential for marginalised communities. Therefore I undertook the task of
addressing the issue of exclusion from mainstream banking, for such
communities and explored the credit union movement’s attempt to deal with
this problem. I noted that while credit unions have come a long way in
providing access to affordable credit for many people, there are still
others who remain marginalised. Reasons for such marginalisation, I noted
may be social, economic, cultural or religious. Following the identification
of what I believed to be short-fallings within the credit union movement, I
proposed the concept of interest free credit unions as an
alternative. I laid a basis for such a proposal by detailing the arguments
prominent economists put forward in favour of the above. Finally I presented
2 case studies of interest free credit schemes as examples of how credit
unions could adapt their present mode of operation in order to include the
excluded, thereby making credit unions more accessible to the marginalised. Having
researched, developed and detailed my argument, I conclude that while
interest free credit unions are viable, they can only be so if certain
criteria are met which ensure sustainability. Interest free credit schemes,
unlike the mainstream banking sector and to some extent credit unions, are
dependent on not just financial sustainability, but also socio-cultural,
institutional and economic viability. Interest free credit unions must exist
within a strong community where a common bond of mutual respect and interest
in the well-being of all is shared. Interest free credit unions must also
maintain the already existing institutional stability of present day credit
unions. Such strong administration and management can help ensure that
detailed records are kept for all to see. Transparency is essential so that
a common bond of mutual respect is ingrained into the institution. As with
all financial institutions, economic viability is essential for
sustainability to be insured. Thus, while interest bearing institutions
ensure sustainability through profits from interest, interest free
institutions are dependent on members investing borrowed money on
financially viable projects. The idea of profit-sharing in production
ventures is therefore strongly proposed, and this in itself compounds the
necessity for a well run institution, a strong sense of community and
transparency in operation. In order for this to be achieved, I also feel
that interest free credit unions would need to remain community based,
to allow all members to know and trust each other.
Therefore interest free credit unions, in my opinion, are viable and
can assist in the empowerment of marginalised communities. However it must
be strongly emphasised that it is not simply the exclusion of interest that
deems it successful, but rather the combination of factors detailed
throughout my study. Limitations
of my study
This
dissertation has begun for me a journey of discovery, regarding the
possibilities for access to credit for marginalised communities. It is a
journey that I feel will be ongoing. Therefore although I have presented a
case in favour of interest free credit unions for such communities, I also
wish to emphasise its limitations. ·
In the first instance, the bulk of my argument derives from Islamic
sources and one may say that this in itself is an alienating factor for many
who would not subscribe to such doctrines. However such doctrines merely
preach a belief in social responsibility and respect for fellow humans.
Furthermore all such doctrine is backed up by a clear and concise economic
argument. ·
Secondly as was noted, the 2 case studies presented as examples of
the possibility of interest free credit unions, are not themselves
credit unions. Therefore one may say that my argument lacks credibility.
However, while I accept such reservations I do believe that fundamentally
the 2 cases share with credit unions the same social philosophy, and as such
can be adapted. ·
Thirdly, my study has been based on secondary sources, (Letters,
E-Mails, Journals, Conversations, Books), and therefore lacks first hand
practical experience. This is something that should be noted for future
studies which might be based on involvement in an actual interest free
scheme. ·
Finally, time has also acted as a constricting factor and I would
therefore see my dissertation to be an extract of a debate that will
hopefully be ongoing and involve more practical
and grassroot research. > Introduction > Chapter 1 > Chapter 2 > Chapter 3 > Chapter 4 > Bibliography We want your feedback on our web site please click here to sign our guest book or click here to view our guest book.
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