Democratizing Finance: A Proposal for Community-Driven Microbanks to Address Local Needs

This article introduces a model of public banking that creates community-driven microbanks (CDMs) to address local socioeconomic needs. Unlike traditional public banks, CDMs are based in small communities, where residents actively participate in management and decision-making. These microbanks are proposed as a potential mechanism to help close the gap between the current financial system and underserved populations, particularly in poorer urban and rural areas. CDMs combine elements of participatory budgeting, credit unions, and mutual aid societies, functioning as both state-owned and community-governed institutions. Using digital technologies and blockchain, they may potentially improve transparency, accountability, and efficiency while reducing costs, though implementation challenges remain significant