 Financial scandals in the years following independence seriously eroded public confidence in financial institutions. Hard experience had taught many Macedonians to convert their money to dollars or euros and hide them under the bed. As a result, in the towns and villages, banks were short of capital and household savings were inaccessible to the businesses that needed capital to grow and create jobs. The situation gradually improved but in smaller cities, depositors remained reluctant to save in local currency or to trust savings institutions.
In 1999, a USAID grant to the World Council of Credit Unions (WOCCU) helped to found Savings House FULM with the goal of mobilizing rural savings for use within the community. In order to attract these savings, FULM had to create an identity as financial institution that could be trusted as a secure guardian and manager of depositors' wealth and as a local source for the capital needed for local development. Simultaneously FULM had to persuade farmers and villagers to save in the local currency, denars, because FULM is prohibited from taking deposits in foreign currency. At the same time, Savings House FULM had to find ways to implement a credit union in a legal system that did not recognize the unique nature of depositor owned and managed financial institutions. Macedonia is still struggling to overcome the ethnic tensions which broke out in armed confrontations in 2001. However, FULM stresses that its program has no ethnic, religious, cultural or linguistic biases. FULM has earned a reputation for security and stability. Its five branches currently have deposits worth over $1.8 million from nearly 4,000 members. |