Village Corporation Bank

 

To achieve real prosperity, village corporations must do more than grow a cash crop,  sell it unprocessed, and buy  goods and services with the profits.  Goods and services  must be produced locally.  Why ”import” bricks when they might be produced far cheaper and better quality locally?  Why sell unprocessed peanuts at $380 per ton and buy peanut oil at $2000 per ton from foreign manufacturers when the peanut oil can be produced “in house”? One of the main  purposes  of the Village Corporation Bank  is to fund  well thought out  new enterprises  and provide loans and financial services  for  existing  businesses to enable them to expand. VC bank ties business loans to meeting some important preliminary requirements:

 

  1. Does the new business  make sense in terms of the VC Master Development Plan?

  2. Is the business plan well thought out? (Can the product be sold at a profit? Is there a large enough local market? Preference will be given to businesses that can provide goods and services required locally, rather than businesses that  cater to international market requirements)

  3. Does the prospective entrepreneur meet the  accreditation requirements? ( Has  he or she passed  the appropriate training course and gone through  an internship in an established business  of the same kind?

  4. How long will it take the business to break even? How long until the new business  makes a profit? What is the projected ROI?

  5. How likely is this new business going to succeed? Business failures in the fledgling local economy are simply not an option.  A  VCB business loan is tantamount to the entire community making an unbreakable commitment to make this business succeed.

  6. How many jobs will this business create?

  7. Are other villages in the local network planning to develop similar enterprises?  Will this result in local over-supply of these particular goods/ services?

  8.  

By carefully analyzing all these factors, the VC Bank will ensure a  high rate of loan performance, a rapidly growing local economy due to maximizing effective use of capital,  a  steady increase in PPP, increase in local economic profitability through  steady vertical market integration  and steady movement towards the key goal of  full employment  and dissemination of social equity.

Once GSR has successfully trained local bank management team, it will gradually cede  responsibility to this team  for managing the local loan portfolio. It will help assure effective ongoing  financial leadership  by regular review of the above listed performance benchmarks. It will also establish a strong communication network with other village corporations in the local area to  ensure effective cooperation.