More interest in credit
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Houngbo, Emile N. 1998. More interest in credit. Spore 74. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/49051
Internet URL: http://spore.cta.int/images/stories/pdf/old/spore74.pdf
Emile N. Houngbo, a socio-economist in Benin, comments on the article in Spore 71 (page 4), because the details given do not, in his opinion, match the everyday realities of the street banking sector in Benin. 'Deposits are made on a daily basis; in...
Emile N. Houngbo, a socio-economist in Benin, comments on the article in Spore 71 (page 4), because the details given do not, in his opinion, match the everyday realities of the street banking sector in Benin. 'Deposits are made on a daily basis; in fact, savers do not really have a choice of days; the banker comes round daily, except on Sundays, to collect deposits. The banker's commission paid for services rendered is the equivalent of one daily deposit, regardless of whether or not the saver continues saving to the end of the agreed saving cycle. These periods are normally monthly, quarterly or annual. Cases of street bankers running off with their depositors' money have now become common, and this has considerably reduced the once-high credibility of these people. Nowadays, large depositors (of more than CFA 400, about 60 US cents, a day) take out an interest-free loan equivalent to the total intended for the whole month, and they do this after just 5 or 10 deposits. For depositors, the availability of this credit has become a criterion for choosing a street banker. The situation is less a case of a depositor accepting to pay heavily for the right to save, and more a case of him wanting to start saving with a street banker in order to get, on the 5th or 10th of the month, a loan equivalent to the total amount he expects to save.