The role of informal microfinance institutions in saving

The cooperative formula was then conceived and became a solution to capitalist exploitation
and in this sense; it became the sister of the labor union movement. The second generation of
the pioneers of modern cooperation emerged, not in cities, but in certain European rural
environments in the late 19 th century. In the 1860s,these pioneers invented the formula of
agricultural cooperatives and savings and credit cooperatives inspired by the success of the
consumer cooperatives formula in Great Britain and based on old traditions of rural solidarity-
aimed to meet the foremost economic needs, that went unsatisfied as a result two things
happened:
Agricultural cooperatives enabled families of farmers and livestock raisers to organize their
own supply systems of agricultural inputs and market their products and to no longer
depended on merchants and businessmen in the cities.
.The SACCOs enabled them cease longer depending on moneylenders and to find the credit
necessary to modernize their agricultural cooperatives. In Europe, in the late 19 th century,
especially in Italy, there were peoples’ banks with none of the characteristics of the SACCOs
named as mutual benefit societies or cooperative syndicates.
Almost all of the industrialized countries of the North, especially the United States of America
,used agricultural cooperatives(for savings) that enabled rural families(farming and handicraft)
to become integrated into national and international markets and constantly raised their
living-standards until they attained a level comparable to that of the urban environment.
In Europe of the 19 th century, the promoters, i.e. those at the origin of the first cooperative
experiences, were primarily part of a particular ideological current, which can be qualified
generally as “Christian democratic socialism” and came from the new industrial, commercial
and clerical bourgeoisie and petty bourgeoisie.
The following are the different SACCOs models in the European and American SACCOs
models:
Four models influenced the development of SACCOs throughout the world, each related to
the founder of these types of savings and credit organizations.
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