Wednesday, November 10, 2010

We know bankers are old goats, but with this bank REAL goats are the form of currency. Yes, this is the year 2010...

We started Monetary Policy in AP Macroeconomic today and talked about what money is and its functions.  Money can be in the form of commodities (gold, silver, cigarettes, etc) or fiat money (what the govt says will be used as the currency of record).  Whatever the society agrees will be the "medium of exchange" becomes the de facto currency.  Below is a case of a commodity becoming a form of money---goats! (HT: Marginal Revolution)

A bank that lends you goats
Women in remote Korawan, 70 km from Allahabad, have come up with a novel bank which exclusively deals with goats - accepting the animal as savings and lending it out as loans.
"Prema and her friends hailing from Afrozi village have establish a bank which deals exclusively in goats," development block coordinator Subedar Singh told PTI.
In tough terrains of Mirzapur district, most of the people are engaged in crushing stone to earn a living.
"Wives of these people help them in crushing stones and breed two-three goats for additional income," Singh said.
"Though the area is best suited for goat breeding, no effort was made to establish it as a full fledged business activity," he said.
"We provide goats to women having interest in taking up breeding as a full-time activity as loan. When a goat gives birth to kids, generally two to three in numbers, one of them is deposited with the bank again," Prema explained.
Goats in the bank are medically examined every week.
"In case a goat dies, then it is either replaced from the market or from the bank depending upon the availability," Prema said.

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