Distinguished Guests and Development Partners:
"Sawubona" - I am sorry I cannot speak Zulu and will have to use english.
Around the entire developing world there is a movement that has taken hold in rural villages and communities to help their citizens gain access to secure savings and credit services. The proven responsible actions of rural and small town borrowers and savers in many countries has resulted in the growing success of this effort all around the globe. The development of small financial services cooperatives or "village banks" has become a remarkable way of putting effective money management and purchasing power directly into the hands rural of community citizens. Financial Services Cooperatives, or "FSCs", are proving to be a powerful tool to empower rural citizens through providing them key banking services. So you are not alone in this initiative, as similar efforts to improve the economic well-being of rural and small town citizens are taking place elsewhere in South Africa, as well as elsewhere in the world. And your achievement in the opening of your new FSC is the reason that the United States Consul General and the Agency for International Development (USAID) has joined your celebration here in Muden today.
This community, and each of you, have traveled a long road in order to gain access to local banking services, to new opportunities for saving and borrowing money for productive purposes, and it is our privilege to congratulate you and support you in this important effort.
One of the most exciting implications of this new community-based banking service is that it transfers responsibility for using and managing money, and, therefore, adds purchasing power, to the ordinary citizen. The FSC is a reliable method of enabling rural community citizens to handle and expand their hard-earned financial resources with confidence AND competence.
An FSC increases the security of your money, by decreasing the risks you have to face if you must travel far to a financial institution, or if you would otherwise hide your money in a jar at home. An FSC is a safe, reliable and convenient way to provide savings AND loan service for community members who have no easy access to the commercial banks.
As these services are useful for all citizens, I would encourage all of Muden's men and women to take advantage of your FSC. FSCs can succeed best when all the members of the community are involved in using its services, because it is a self-sustaining scheme that relies on receiving savings from numerous local "investors" in order to make loans to its borrowers. And it relies on all borrowers to repay their loans on a timely basis, so interest payments can be made to savers and more loans can be made to borrowers. Only through growing participation, good management and responsible loan repayment can an FSC become a strong and lasting financial institution.
As the savings by your citizens grow and grow, your opportunities will increase for borrowing and investing different creative ventures, like housing, small businesses and other areas. You will find that you are moving closer to fulfilling your dreams and meeting the needs of your family when you join your local FSC.
You know, I am myself a member of a financial services cooperative - a credit union - in which I deposit my entire paycheck! And over the years I have been able to borrow from my credit union for things that have greatly benefitted my family - a home, a vehicle, education of children and so forth. So I can tell you that an FSC works for you.
USAID has been supporting efforts in South Africa to increase access to finance for historically disadvantaged people for more than a decade now. In our past, programs focused on micro-enterprise credit, USAID has provided direct funding to several programs that have led to more than 23,000 microenterprises accessing loans. The Durban-based Ntinga Project has also used support from USAID to train individuals in thousands of small businesses; these have, however, been primarily in urban and township areas. USAID is now supporting the efforts of the National Department of Agriculture to spread this access to new credit into rural areas and towns through FSCs and village banks. We are hopeful that the services to be provided by the Muden FSC will lead to the generation of new microenterprises and small agribusinesses in rural areas.
USAID is delighted to support rural microenterprise loans, as well as other kinds of loans through the IMALI project. IMALI stands for "Improved Microenterprise Access to Liquidity", or as you know well, it means "money" in the Zulu language. This is what the project will mean to you.
This is no give-away program, and USAID can only help the FSC project get started up. The success of this project, and its ability to run on its own, without donor support in the future, will require the use of sound business principles to ensure that the FSC functions as an economically viable unit. The success of yours and other FSCs will require cooperative civic action, full community support, and the integrity of FSC leaders and staff, which are also the basic components of a successful grassroots democracy at the local level.
We owe a great deal of appreciation to the many public and private partners who have contributed various skills and a great deal of energy to develop the financial services cooperatives in South Africa. These key partners include:
We also look forward to the very real prospect of future partnerships for these FSCs with larger financial organizations such as the Land Bank.
Of course there are other partners in this endeavor, but the real movers and shakers to get the FSC going in Muden are YOU-the community members. It takes months of effort to establish an FSC, and you should be very proud of all that you have achieved here.
As a result of this cooperative effort through the FSC project, more than 50 FSCs will be operating in 3 provinces of South Africa within three years.
I'd like to especially congratulate the Zibambeleni group and those of you who have been trained to promote and support the new FSC here. Residents of Muden can be proud of the people who will serve you as motivators, managers and tellers in bringing this unique savings and loan service to this community. In managing your money you will no longer have to worry about going to banks that are too far and often too expensive to serve your needs.
Since the FSC has helped to establish a strong base of organisational and financial skills right here within your community, I think there is great potential for the FSC in Muden as a catalyst to stimulate further development initiatives.
The Muden FSC can be an important engine for the citizen of this area to pursue your other development goals, because it will bring the community together to improve financial security and economic opportunities. It can also provide a venue for the community to discuss and address other issues of pressing concern, such as the growing problem of HIV/AIDS, which affects so many families in KwaZulu-Natal. I should note that USAID is actively engaged in supporting the National Partnership Against HIV/AIDS, and is interested in working with communities which have organized themselves to act together to prevent the spread of this disease, and to care for these who have contracted it or who have been orphaned by it.
Through your FSC, you can depend on each other and rely on yourselves. You will see that this approach to local economic growth through savings and investment will help you to stimulate greater economic activity within the community itself, because your money will remain here in Muden, and be invested productively.
And so we are here to celebrate the Grand Opening of your new FSC. You have every right to be proud; we are certainly proud of this accomplishment.
We hope that Muden's financial services cooperative, your FSC, will be the beginning of many more opportunities for you in the economic development of this beautiful and productive community.
Thank you.
