Two issues facing start-up businesses: a) Capital to start b) funding a personal emergency.  The Community Savings Bank helps solve these issues. By Gary Shotton #000340

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Community Savings Bank

By Gary Shotton

Hello, my name is Gary Shotton and today I am going to talk about community saving groups. Our community saving banks this is what we found out that is happening in a lot of the developing nations.  I am very excited about it and specifically in East Africa and a lot of Africa and other parts of the world. You see the two biggest questions that come to us as a problem with owning and operating a business, and the two things that will cause a business to go bankrupt or become insolvent are the lack of capital. Lack of getting the money a person needs to grow to the next level now, if you listen to me very long, I am the one that suggests on the very first business. You do not borrow for any from anybody, but you produce effort with the things that you can do without a borrowing. But I also know that is hard for some people to do but, do not borrow very much money and prove your skill sets that is what is necessary now. So, the problems are the capital to start or grow and then, also the reality that life happens and there’s emergencies like a severe sickness or a major issue with a vehicle or things that just can drain a personal side of their lifestyle.

There is no money to fix that and the money’s pulled out of the business, and there we go cash is like blood is important to the body cash, is important to the business, so what we understand is that community groups. We have seen some wonderful ones formed and it is nothing that we do to cause this because, it is well understood in these countries that people can gather weekly typically and every time. They come bring some money, when they bring the money, they put it in to basically the pool the Rev news, that the group has under their control. But that same day they loan it out as like loan officers to people that have one of those two cases, the case of an emergency that they need to borrow for a bit of time a sum of money to fix their car or for a bit of time a sum of money to helps with somebody that had a funeral. Or something unexpected and so they can borrow the money from that group from that fund and then they are responsible to pay it back.

Guess what they do pay it back on a regular basis, guess what if money comes from outside the country from a foreign entity. From people that have money I have been told in a bit believe it to be true, that it is very hard for that money to get paid back to the fund. Because the general attitude is that people that caused the presented that money really do not need it back now. The other thing is of course the put the funds are gathered every week and they are increasing the people that are bringing their monies to this fund. Are knowing that they have a given interest rate, they are making an interest of fair. Interest rate on their monies and the other thing that people can present is like request for a loan for their business, well who is the loan officer, who Tech who decides the whole group decides and now those loans are typically regularly paid back. Because this is the lifeline for people in their community this is their friends and neighbors, and they know that they cannot cut that last lifeline.

Their one chance to have help they have got to be honest and they want to be honest. So, they are more diligent and paying it back, now the reality is that we must overcome these two issues. And the groups seem to have a very good policy that at the end of one year that group then has decided to dissolve and resolve all loans and pay everyone back their money. I do not know how they do it, because I do not think they use computers so, this is all done by hand in some way in other words people bringing small sons of money every week. Somehow someone is calculating the interest that they are due at the end of that period but, we have seen groups that had started with just a couple hundred dollars and now have six thousand dollars in their fund in less than seven or eight months. That is amazing now keep in mind there is not six or seven thousand setting in a bag that they must be careful that no one steals it every time they arrive and every time the money comes as I understand.

It is doubts now there is a list of people that have requested funding and those people that requested funding are given under a procedure the monies that are they are willing to pay interest. So, people are depositing monies receiving interest and others are borrowing money a paying interest and this is a functioning form of a bank. I think this is fabulous because it solves two major problems and maybe the third problem is that there is a tendency and a culture that if someone has a need. They would come to an individual and say I have such a need and that individual is pressured to give them money treasurer to give them money out of their business. Out of their personal funds and this is not fair to be pressured like that, and so that person is being pressured. I suggest what advise the person that asked for the money that get involved with a community savings group now. They have an answer for that issue, and they say they do not want to get involved with it, well tough maybe you have to say “no”.   I cannot show you to the money well. I hope this is helpful we are here to help your thanks for being a part of “Inspiring Better Business”.