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Developing world: Money under the mattress is no longer necessary

"Debts are honoured because if people default they know they will be expelled from the community."

Jane Bird Financial Times 14 June 2012

PA’s Julius Abensur, financial services expert, is quoted extensively in the Financial Times as part of a special report on sustainable banking & finance. The article looks at financial services in remote areas, in the developing world.

Julius explains how a quinoa farmer from the Bolivian Andes is mentally programmed to do business informally, with oral deals and book-keeping done with a notebook and pencil.

Julius goes on to explain that imposing formal and complex bureaucracy on people unaccustomed to this way of doing things won’t work: “Debts are honoured because if people default they know they will be expelled from the community.”

Julius talks about how winning the confidence of such people involves understanding and adapting to their ways: “A member of the Uros community, who live on floating islands on Lake Titicaca in Peru, is more likely to listen to a casually dressed banker arriving by canoe than one with a tie who wants to avoid muddy feet.”

Julius goes on to advocate local shops providing services such as cash withdrawals and deposits on the bank’s behalf, as using local shops adds trust to transactions because they are “the heart and soul of rural areas”.

You can read the article in full here.

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