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    Table Banking Notes

    Uploaded by

    Joseph Maina
    Table banking is a group savings model that promotes financial inclusion for women unable to access loans from commercial banks. Members make weekly savings contributions that go into a group fund, from which they can take short-term or long-term loans. Groups elect officers, set loan terms and interest rates in their constitution. Weekly meetings allow members to save, take loans, discuss businesses, and repay loans, with the goal of providing capital for members' viable business plans. At year-end, interest earned is distributed as bonuses. Table banking gives members a sense of ownership over their funds and allows even those with little to contribute and no collateral to access loans within their communities.

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    Table Banking Notes

    Uploaded by

    Joseph Maina
    92 views2 pages
    Table banking is a group savings model that promotes financial inclusion for women unable to access loans from commercial banks. Members make weekly savings contributions that go into a group fund, from which they can take short-term or long-term loans. Groups elect officers, set loan terms and interest rates in their constitution. Weekly meetings allow members to save, take loans, discuss businesses, and repay loans, with the goal of providing capital for members' viable business plans. At year-end, interest earned is distributed as bonuses. Table banking gives members a sense of ownership over their funds and allows even those with little to contribute and no collateral to access loans within their communities.

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    Table Banking Notes

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    Table-banking-notes

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    Table banking is a group savings model that promotes financial inclusion for women unable to access loans from commercial banks. Members make weekly savings contributions that go into a group fund, from which they can take short-term or long-term loans. Groups elect officers, set loan terms and interest rates in their constitution. Weekly meetings allow members to save, take loans, discuss businesses, and repay loans, with the goal of providing capital for members' viable business plans. At year-end, interest earned is distributed as bonuses. Table banking gives members a sense of ownership over their funds and allows even those with little to contribute and no collateral to access loans within their communities.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    92 views2 pages

    Table Banking Notes

    Uploaded by

    Joseph Maina
    Table banking is a group savings model that promotes financial inclusion for women unable to access loans from commercial banks. Members make weekly savings contributions that go into a group fund, from which they can take short-term or long-term loans. Groups elect officers, set loan terms and interest rates in their constitution. Weekly meetings allow members to save, take loans, discuss businesses, and repay loans, with the goal of providing capital for members' viable business plans. At year-end, interest earned is distributed as bonuses. Table banking gives members a sense of ownership over their funds and allows even those with little to contribute and no collateral to access loans within their communities.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    How Table Banking works

    Financial inclusion is listed as a target in achieving eight of the seventeen global Sustainable Development
    Goals (SDGs). However, women have often been left out and are unable to access loans from commercial
    banks. Table banking is an increasingly popular concept that is helping level the playing field for women
    unable to meet conditions such as the need for collateral demanded by traditional banks.

    What is table banking?

    Table Banking is a group based funding system where members of a group meet weekly and make weekly
    savings to form a kitty from which members can borrow. Each member’s contributions are recorded in her
    passbook and referred to as her share. The minimum contribution per week, which can be as low as Ksh 25
    (20p), is set in the group’s constitution, which is written by the group itself. Thus it is set with the
    members’ incomes in mind. Members can contribute any amount they choose at or above the minimum
    set. The constitution also covers matters such as election of officers, arrangements for audit of the ledgers,
    term of loans and interest rates, and group sharing of interest paid.

    The Yamoloko table banking group is made up of project clients who were trained in 2017.

    At the weekly meetings, business issues are discussed, fines paid (eg for lateness or non-attendance) and
    loans repaid. The cash collected on the table (i.e. this week’s savings and loan repayments)is then
    immediately loaned out to members who can present the group with a viable business plan for their use. If
    more than one member wants a loan, the group will discuss and come to an agreement about which
    should have it. Loans can be short term, i.e. repayable within one month with an interest rate of 10%, or
    long term, typically over 36 months at an interest rate of 1% a month. At the end of each meeting, if all the
    cash has not been loaned out, the balance will be taken by three members to be banked in the group’s
    bank account or put into the group’s Mpesa account (mobile banking).

    At the end of the year, the total amount of interest earned and fines paid is added up and distributed to
    members as a bonus. The method of distribution is set in the constitution and is usually either pro rata (in
    line with total share i.e.savings as shown in the members passbook) or shared equally among members.
    Given that most of the cash is loaned out on a monthly basis, quite a lot of interest is earned which both
    increases the fund available for borrowing and, at the end of the year, gives members a useful sum just
    when it is needed for school fees, payable in January.

    Groups register with the Kenyan Government, which gives them official status. In some cases, the group
    may get funding through loans or grants from e.g the Women Enterprise Fund and microfinance
    institutions. Group guarantee comes into play where members act as guarantors to each others’ loan. If
    one defaults, the rest can’t access finance, which in turn motivates members to keep each other
    accountable. Table banking is common amongst women but there are exceptions with mixed gender and
    men’s groups also in existence.

    Advantages of Table Banking

    The ‘table bank’ is group owned, thus gives members a sense of pride, also, interest earned from loans still
    goes back to the groups’ kitty.

    Table banking can be used by the poor, with contributions as low as Ksh 25 and no need for collateral, it
    promotes financial inclusion.

    The close interaction between members fosters an exchange of knowledge and skills in regards to making
    investments.

    It is a convenient banking option as they are located within communities-easy access and tailored to
    members needs.

    The above article has been based on one from the following source:

    NOVEMBER 1, 2017 from https://www.potentash.com/

    The Concept Of Table Banking by GABRIEL ONYANGO

    Here are the officers hard at work keeping the books

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