What is Table-banking?
Table-banking is a group based funding strategy in which members save and borrow immediately during their meeting times. On a given date of the month, members meet, place their savings and other contributions such as insurance, educational savings, fines and penalties on the table and borrow immediately either as short term or long term loans.
How Is Table-Banking Unique?
- Table-banking methodology is almost the reverse of the conventional banking methodology. Conventional banking is based on the principle that the more you have, the more you can get. In other words, if you have little or nothing, you get nothing. As a result, more than half the population of the world is denied the financial services of the conventional banks. Conventional banking is based on collateral, while table-banking is based on group guarantee and house-hold collateral.
- Table-bankingis founded on the principle that credit should be accepted as a human right, and builds a system where one who does not possess anything gets the highest priority in getting a loan. Table-banking methodology is not based on assessing the material possession of a person; it is based on the potential of a person. Table-banking believes that all human beings, including the poorest, are endowed with endless potential.
- Conventional banks look at what has already been acquired by a person. Table-banking looks at the potential that is waiting to be unleashed in a person.
- Conventional banks are owned by the rich, generally men. Table-banking is owned by poor women.
- Overarching objective of the conventional banks is to maximize profit. Table-banking’s objective is to bring financial services to the poor, particularly women and the poorest — to help them fight poverty, stay profitable and financially sound. It is a composite objective, coming out of social and economic visions.
- Conventional banks focus on men,Table-banking gives high priority to women. 97 per cent of Table-banking members are women. Table-banking works to raise the status of poor women in their families by giving them ownership of their mobilized savings and any other assets they would acquire.
- Table-banking groups are located in the rural areas, unlike the branches of conventional banks which try to locate themselves as close as possible to the business districts and urban centers.
- First principle of Table-banking is that the clients should not go to the bank. Table-banking brings the bank to the people instead. Repayment of Table-banking loans is also made very easy by splitting the loan amount in tiny monthly installments. Doing business this way means a lot of work for Table-banking officers but it is a lot convenient for the borrowers.
- When a client gets into difficulty, conventional banks get worried about their money, and make all efforts to recover the money, including taking over the collateral. Table-banking, in such cases, works extra hard to assist the borrower in difficulty, and makes all efforts to help her regain her strength and overcome her difficulties.
- In conventional banks charging interest does not stop unless specific exception is made to a particular defaulted loan. Interest charged on a loan can be multiple of the principal, depending on the length of the loan period. In Table-banking interest on loans can be halted especially for cases where a member is admitted in hospital and will only be charged after she is well and back to business.
- Conventional banks do not pay attention to what happens to the borrowers’ families as results of taking loans from the banks; housing, sanitation, access to clean drinking water, and their coping capacity for meeting disasters and emergency situations. Table-banking helps the borrowers to build their own investments, health insurance and pension plans and the welfare kitty stands by its members during times of difficulty.
Advantages of Table-Banking
- All the money belongs to the group.
- Member’s savings are not taken away but instead used for loaning.
- Ability to mobilize savings among the poor.
- Interest earned remains with the group.
- Bonus every quarter.
- Dividends every year.
- Education booster
- Agriculture booster
- Banking at the convenience of your homes / Table