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Organisations like Gramin bank in Bangladesh , and Islamic finance in some countries have contributed greatly in the upliftment of poor people. Can cooperative and other banks whoes main aim is cooperation and profit sharing with bank customers rather than profit motive be used as tool by the Government and Global bodies for upliftment of the down trodden ?
In theory, of course they can and while being profitable in the same time. In fact, Grameen Bank while it did help a lot of people to come out of poverty, they are still profit making bank. Helping people doesn't necessarily mean donating your money. Grameen Bank was successful because its business model that was desinged around their target in Bangladesh.
What I'm trying to say is that cooperatives and profit-sharing-banks can help people while still being profitable in the same time as long as you develop the right model for that. Each country differs from a geographic and cultural point of view and you need a model that works best for each.
Of course the main aim of a cooperative id for poverty alleviation and to finance mostly primary sectors in the society espacially the lower class people.in my country like cameroon this cooperative gives out farm input to farmers and inturn buys out their product at a better interest rate
Developing countries population can be divided into two broad categories. One portion consists of people who have access to banking facilities and the second portion which consists of a majot chunk, banking services are not available. There comes the rele of non conventional banking which can prove a major game changer. We have wittnessed the strength of how Micro financing and micro lendng have changed the lives of these bottom of pyramid. Non conventional banking will be the new invisible hand in the alleviation of poverty in the developing countries.
Yes non conventional banks also eliviate the poverty in a developing country just like islamic banking through low markup and enhance he business activities through financing by islamic banking.
Conventional banks are tied by one specific model which they won't change regardless which country they are operating in. Their model is the conventional lend-borrow with interest. They don't use any other model by their own constitution and by the country laws. They don't do profit-sharing like Islamic banks. That's why even though in theory any individual or financial institution can build a business model around profit-sharing / risk taking, not all do or can do under their current circumstances. Islamic micro-finance is needed in developing countries so that we can see tangible results in poverty elevation.
Yes, they can. However, their business model should be relevant to society need, people need, market nature, economic reality of a country.
