Effectiveness of a Korean Microfinance Program: The Saemaul Credit Cooperative Movement in the 1960s and 1970s

• Published in: 국제개발협력연구, 7(2) pp. 199 - 238
• Main Authors: 심우종, 이계우
• Format: Journal Article
• Language: English
• Published: 국제개발협력학회 01.12.2015
• Subjects: 사회과학일반
• ISSN: 2005-9620; 2635-7135

The purpose of this study is to investigate whether the Saemaul Credit Cooperative (SMCC) Movement -- Korea’s representative microfinance movement in the 1960s and 1970s -- was successful and can serve today as a model for the Korean government’s international development cooperation efforts. For this purpose, this study evaluates whether SMCC indeed had positive impacts on income growth or poverty reduction among Korea’s rural population in the 1970s. The research results show that SMCC had positive effects not only on rural people’s income growth, but also on the success of the Saemaul (New Village) Movement (SMM) itself. This study also reveals that SMCC had some distinctive features that made it more successful than many other microfinance institutions (MFIs), including Bangladesh’s Grameen Bank. The SMCC was superior to the Grameen Bank by some criteria often used for judging sound microcredit. Among these: a nationwide movement; a self-reliant and bottom-up movement; a savings-oriented movement; a micro-credit movement (small loans for sound purposes and with low interest rates); an education-first movement; and a virtuous circle movement through income growth projects. The SMCC is a worthy model for international development cooperation even today. KCI Citation Count: 0