TAILIEUCHUNG - The Experience of Savings Banks

Because enforcement was a lengthy process if contested by the institution, the Bank Board preferred either to use voluntary supervisory agreements or to rely on the states to use their powers. More important, the lack of resources and the limited number of enforce- ment attorneys (generally only five through 1984) led the FHLBB to adopt policies that made it unlikely an institution would contest a case. For example, enforcement staff would compromise on the terms of a cease-and-desist order, pursue only the strongest cases, and generally because of lack of precedents avoid cases alleging unsafe and unsound prac- tices. Unfortunately, these policies undermined the effectiveness of both contemporary and future. | Case Studies The Experience of Savings Banks Hugues Kamewe and Antonique Koning Introduction While savings mobilization may have been the forgotten half of microfinance it is increasingly receiving attention from microfinance practitioners and policy makers. Savings provide an important financial safety net for poorer households in cases of emergency. It also plays a critical role in financing productive activities and can foster microenterprises. At the macroeconomic level savings can trigger sustained economic growth. Evidence also shows that the accumulation of savings helps to create a domestic capital base that makes economies less dependent on foreign capital and more resistant to capital market fluctuations. Not only does the mobilization of savings offer opportunities for economic and social development there is also sufficient proof that poor people in economically less developed countries attach high importance to savings. There is a large demand for a variety of savings services among low-income people. Studies have proven that they are capable of accumulating resources and the amounts they manage to save are This also appears from the vast amount of savings that is kept outside the banking system and gathered by informal savings practices like hoarding livestock money guards rotating savings and credit associations etc. These informal savings systems are generally indivisible quasi-illiquid and high-risk. The challenge consists in bringing more of these savings into the formal banking circuit so that they can be transformed into credit loans and productive investments. The World Savings Banks Institute WBSI has for long advocated the importance of the mobilization of domestic resources and recognized the potential for development and the reduction of poverty that arises from Savings banks experiences confirm the huge demand for savings 64 Developing Deposit Services for the Poor Preliminary Guidance for Donors revised .

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