Role of Village Banking in Stimulating Economic Wellbeing

Topic 4 DQ 1
When we think of banking institutions in the United States, we think of all the options
available to us. As a consumer you can choose a bank with all the option, we require to
make our lives easier. However, when we think of global poverty, the last thing we tend to
think about is banking. We often think banking how if they have no financial means to
deposit. Even though, it may appear how can banking sustain globally we must consider
ways to alleviate poverty.
According to Hiatt & Woodworth (2006), one tool for village banking, which refers to tiny
loans to the Third World poor (Hiatt, et.al., 2006). The microloans are available through
two sources the Freedom From Hunger (2004) and CARE (2004). Having availability from
these two sources help families have access to finance and empowerment. However, even
though there is access to these financial institutions you must consider the criticism the
financial institution faces when they are trying to give access to a country where poverty
runs rampant. According to Hiatt & Woodworth (2006), current clients who have
participated in their village bank for more than a year were observed to earn more money
daily (Haitt, et. al. 2006).
Hiatt, Shon & Woodworth, Warner. (2006). Alleviating Poverty through Microfinance:
Village Banking Outcomes in Central America. The Social Science Journal.

Role of Village Banking in Stimulating Economic Wellbeing

Thank you, Sandra Aguilar, for the post, I have to start by recognizing that I share your opinions.
In this post, I will discuss more on the role of village banking in stimulating economic
development.
The Corona pandemic has devastated the world economy, but the situation is much worse for
developing countries. In most parts of Europe and the United States, the governments offered its
citizens financial assistance to cope with the lockdown measures. In the case of developing
countries, the situation has been different from governments struggling to support the citizens.

Still, with village banking, it could be more comfortable for the people in marginalized areas to
access financial aid.
Kenya, the M-Pesa platform, has elevated the concept of village banking to a notch higher. It is
worth noting that M-pesa has over 20 million active users in Kenya. With M-pesa, you have
access to credit through various collaborations with banks and different saving plans (Thuita,
2020). Village banking is all about promoting financial inclusivity, but for Kenyans, M-Pesa is a
kind of bank where every individual has equal access.

Reference
Thuita, G. W. (2020). Impact of Mobile Payment Applications and Transfers on Business:
Financial Inclusion and Innovation–The Case of Mpesa in Kibera Slum, Kenya. In Impact of
Mobile Payment Applications and Transfers on Business (pp. 173-189). IGI Global.

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