Issue
Agency Decides
Cash Reserves
4
Comment Agency usually has guidelines or specific requirements that consider the status of external and internal account repayments and provide a standard to strengthen overall portfolio and safeguard savings.
Savings Policies and Practices
Agency may influence bank decisions or guidelines on accessibility to savings in order to decrease risk on external account and maintain minimum levels of savings. Although policies are generally decided by bank, training by agency in the importance of saving should be provided.
Recordkeeping Policies and Practices
Agency usually standardizes internal account records for audit and overall monitoring purposes.
Lending Documents
Disbursement Documents
4
Bank Decides
Comment Banks vary on this issue. An externally imposed rate may unduly inhibit internal account mobilization if bank is performing well. However, this may be justified for overall portfolio quality. High reserve policies may result in negative returns due to inflation. Low reserve policies may put savings or external account at risk.
4
Bank normally decides the conditions under which savings may be withdrawn and the frequency of withdrawals. If agency imposes restrictions on savings, bank members may save at lower rates knowing they have limited access to their funds. Forms and systems should be geared to enhance information gathering and promote bank self-management without outside assistance.
Agency requires uniform credit applications and contracts. Documentation formalizes loan and audit trail.
4
Formal contracts usually are not imposed by bank, since they may be difficult and/or time consuming for less literate borrowers to complete.
Agency works with bank to develop streamlined disbursement recordkeeping practices.
4
Bank may find documentation of internal account disbursements difficult unless it receives sufficient agency orientation. Forms require significant application of human resources.
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