Does IDEX use microcredit?
Yes, but not the variety that has captured the public’s imagination. Microfinance – a way of providing very small loans – comes in many formats and under many names. They vary according to who makes decisions about loans, fund management and administrative issues. • In India and Nepal the most popular model among our partner organizations is called a “Self Help Group” or a “Savings and Credit Group.” Women save money together and provide loans to each other based on their combined savings. Then, IDEX partners link women to existing banks. This way, they can open accounts and receive loan funds for their group. Individually, this is often not possible for the very poor. Also, this format helps to forge a culture of savings and it brings women into the formal banking system. • In Nepal, legal cooperatives with shareholders are common. They are usually formed by bringing together several Savings and Credit Groups. • In Mexico and Guatemala, our partners use a “Revolving Loan Fund” format.
