Financial Landscapes Reconstructed

We chose the landscape metaphor designedly for this collection of readings on financial intermediation.With it we hope to stimulate reflection on all the critical dimensions of financial and quasi-financial services in the processes of development.The metaphor is not only used to indicate the physical features of the financial landscape such as the offices of banks, cooperatives, credit unions, traders, pawnbrokers, self-help groups, NGOs, and whatever other financial or quasi-financial institutions there may be.With the metaphor we wish to emphasize regional diversity and historical change in financial eco-systems.At the same time it stimulates us to explore what relations, norms, actions and processes influence, directly or indirectly, the transactions of savers, borrowers and lenders. LandscapesThe landscape metaphor leads us to expect variety: lowlands and mountain ranges, broad rivers and little streams, fertile regions, deserts and muddy swamps, urging us to adopt a view on a totality, and to ground the institutions and social processes we study in space and time (Benda-Beckmann 1992).The metaphor points at the planned or spontaneous growth of financial intermediaries and relations as well as their predictable, unforeseen or even unnoticed decline -explaining the ever changing composition of financial eco-systems that do not evolve in one particular direction.Furthermore, landscapes remind us of the physical infrastructure of a region, with different ways to travel from farm fields to market places, from houses to offices, from village markets to wholesale markets, and of poor roads connecting distant villages with capital cities.This leads one to explore the other interesting avenue of financial landscapes: the connections and disconnections between different kinds of savers, borrowers and lenders.The metaphor directs the attention to "networks" of moneylending traders, money guards, banks and savings clubs, but also to deliberate non-use of financial services and short-circuits between financial intermediaries.For instance, inflation causes people to find refuge in "inflation hedges" in the form of golden necklaces and cattle, while political maneuvers might keep savings clubs and money guards from entrusting even a single penny to a bank.Finally, we should not ignore indirect links, as when agricultural traders partly on-lend their bank loans to farmer-borrowers; or when market women who borrow from a wholesaler, deposit money at a local bank and participate in a savings and credit association, thus connecting different financial flows and intermediaries.Besides leading us to expect diversity and change in financial eco-systems, the metaphor also brings us to systematically explore their backgrounds, that is, why, how and on what scale changes of landscape take place.The metaphor refers to the complex dynamics of changing ecological conditions and human intervention, that include soil conditions, natural vegetation and crops, but also fertilization, salinization, and deforestation as well as natural phenomena like hurricanes, drought and floods.Diversity of landscapes is a result of different and frequently contradictory efforts at planning by individual and institutional actors who face and adapt themselves to specific ecological conditions and changes.The metaphor of financial landscapes cautions us right from the start against too easy assumptions about the dynamics of financial intermediaries and relations between borrowers, lenders and savers.The quality and effectiveness of the maps of financial landscapes are very much dependent on the uses one needs them for.We want to distinguish two types of orientation: one that is leading us to a better knowledge and theoretical understanding of what we think the real financial landscapes to be; another that enables the promotion of policies and projects directed at change of financial landscapes or the "cultivation" of financial landscapes (Benda-Beckmann 1992).