From Microfinance to Mutual Aid—Moving Resources to People, Not Banks

Have you ever heard of the classic Brothers Grimm tale, “The Golden Goose”? It begins with one person touching the magical golden goose, and from that moment, the person becomes bound to it, unable to break free. In their desperate struggle to escape, they unknowingly pull others along, one by one, until a growing procession of souls is tethered to the goose. In the story, contact with the magical creature pulls people into a process they cannot escape—much like traditional financial systems trap communities in cycles of debt and dependence.

But today, new paths are emerging where community assets are strengthened—and resources move away from the “top.” For years, banks have operated as gatekeepers, guarding resources and power behind a veneer of exclusivity. Now, the landscape is shifting. And, as is often the case, the Global South is a leading site of innovation.

A small but powerful example is provided by Apoyo Mutuo Kelluwün-Rekulluwvn (Kelluwün-Rekulluwvn Mutual Aid), a groundbreaking nonprofit initiative from Maple Microdevelopment, developed in 2014 at the invitation of the Mapuche-Lafkenche Indigenous communities of coastal wetland Lake Budi, southern Chile, and Northern Patagonia.

My colleague and partner Ignacio Krell and I designed the initial initiative in 2014. Currently, the model involves 30 active community-based families, 80 percent of which are led by women, and 10 external savers, totaling 40 members, focusing on building local economies that are sustainable and rooted in Indigenous knowledge.

A decade in, this mutual aid model—one where communities collectively save, support one another, and make financial decisions together—merits close study. This is especially true at a time when mutual aid models are gaining increased attention in the United States as well.

The Promise and Pitfalls of Microfinance

To understand Kelluwün’s significance, it helps to recall the history of microfinance. In the 1970s, economist Muhammad Yunus pioneered the concept of microloans through the Grameen Bank in Bangladesh, a revolutionary idea that aimed to lift people out of poverty by offering small loans to those excluded from traditional banking. Yunus’s premise was simple: People know better. The idea was that by giving marginalized individuals—especially women—access to credit, they could build their own businesses and drive local development. A solution was underway…or was it?

For years, banks have operated as gatekeepers….Now, the landscape is shifting.

The book Portfolios of the Poor revealed the complex financial lives of people living on very low incomes, showing how they manage their resources through a range of informal savings groups and small loans to meet daily needs. If people had the chance to plan just a few months ahead, even if just a few dollars, they’d have the power to break free from a financial rut. However, this pattern of ingenuity became a space for exploitation. Hailed initially as a cure for poverty, microfinance promised to empower people through access to credit. Over time, many microfinance institutions shifted toward profit-driven models, preying on the communities they were meant to help.

Quick to follow were high interest rates and rigid repayment structures, which turned microloans into burdens, trapping many borrowers—especially young families, the elderly, and women—in cycles of debt instead of providing their desired financial freedom.

The exploitation of these patterns by microfinance institutions highlights the dangers of co-opting community-based systems for profit. And today, the threat is not just from microfinance. Payday advance apps, high-interest rent-to-own services, and the like all normalize undignified standards of living and a low quality of life. A 2025 report from the Center for Responsible Lending found that in the United States, payday loans drain $2.4 billion a year in fees alone from economically vulnerable communities.

The Need for Community-Governed Alternatives

Unlike usurious payday lending, community-led models build economies rooted in collective strength, reciprocity, and resilience. The data are clear: Local economies thrive when we shift away from outsiders’ extractive financial models and focus on empowering people and communities. A classic study conducted by Civic Economics in Chicago two decades ago found that $100 spent at a local business results in $68 staying in the local economy, compared to just $43 when spent at a national chain. The reason is simple: The local business is far more likely to obtain goods and services from other local vendors, while a national chain will likely take resources out of the community.

Local economies thrive when we shift away from outsiders’ extractive financial models and focus on empowering people and communities.

Our work is grounded in this community vision. And it confirms the validity of many of the ideas in Take Back the Economy by J.K. Gibson-Graham, which advocates for shifting resources away from financial institutions and into the hands of people. Gibson-Graham offers a framework that moves away from the rigid structure of finance and invites a more dynamic, process-oriented approach to local economy building.

As we continue to explore collective solutions based on local knowledge, we are shifting how we describe ourselves as being “for community” instead of “nonprofit” to better reflect what we stand for—rather than what we are not. The Kelluwün model focuses on mutual aid and pro-collective decision-making, emphasizing the wellbeing of people over profit and creating financial models that genuinely serve communities rather than exploit them.

A People-Centered Approach

“Kelluwün” in the Mapuche language means “mutual help” or, more accurately, to “lean on each other.” The initiative focuses not on how much cash you have but on what you do. The focus is on collective community strengths. In other words, attending member meetings, even if only to listen, is a first step toward building that collective strength.

In an Indigenous context, where community cohesion and reciprocity have historically been central to survival and resilience, the Kelluwün model is highly relevant. It draws from Mapuche principles of mutual aid, emphasizing the collective over the individual. Relying on ancestral forms of knowledge and governance, a pro-autonomous-governance structure fosters decision-making processes that reflect shared values, including pro-Earth values, ensuring control over their own Indigenous economic futures while preserving cultural traditions. All of this occurs under the guidance of traditional Mapuche authorities—namely elders and knowledge keepers.

But building a people-centered approach takes time. In our case, it took a year’s worth of participatory research (where community members were also researchers), living with the communities at Lake Budi, to identify which old and new forms of governance could be combined with innovative pro-wellbeing ideas. Piloted in partnership with the Mapuche community in 2014, the model was consolidated as part of a broader effort to create Mapuche means and ways of autonomous functions (backed by Article 4 of the United Nations Declaration on the Rights of Indigenous Peoples).

Inspired by collective finance and the work of Indigenous leaders like Rebecca Adamson, the Cherokee economist who founded the First Nations Development Institute, Kelluwün focused on building collective savings groups that pooled resources and distributed support to members based on assembly group decisions. To date, they have supported over 100 family initiatives with a total investment of over $30,000, using their own rotatory savings and keeping cash flow inside the community.

What makes Kelluwün particularly unique is its integration of both monetary and nonmonetary assets into the exchange process. Collective power is no simple feat, particularly when it involves numerous individuals working together within a single group rather than multiple microcollectives uniting under a broader group umbrella.

Navigating this challenge required a model that fosters individual agency and collective unity, which is where Kelluwün stands out. This was a condition presented to us in 2013 by the Longko—the chief of the community. Inclusivity, Mapuche leaders insisted, must be the common denominator—no one can be left out.

Building on Indigenous forms of governance, Kelluwün aligns with the growing global movement to reimagine local economies as spaces for building life.

Challenged, we built a savings system where participants not only contribute monetarily but also could exchange and save in seeds, services, skills, and goods—forming partnerships that they themselves commit to through collective agreements in front of the decision-making assembly. This system allows members to strengthen their local economy and maintain the monetary circulation within a geographical territory by recognizing and leveraging community assets beyond cash.

By focusing on savings (and not debt), local community resources, and assets (and not external or imported sources), it dawned on us that we were looking at a community economy not as a means to an end but as part of a bigger process of mutual collective living in abundance and coexistence with Earth. Our work has gone beyond economic empowerment and has evolved into a holistic approach to ecological restoration and biodiversity, leading to the reforestation of buffer zones around coastal wetland Lake Budi—with plans to restore 160 acres of degraded farmlands surrounding it. This effort involves around 100 families actively planting native fruit, fiber, and medicinal trees and shrubs in their small family plots.

The collective vision is to strengthen the environment and the local economy through increased biodiversity and vegetation cover that is resistant to drought and helps restore soils. This work is done in partnership with the Mapuche environmental sister organization, Budi Anumka, which now consists of three Mapuche Lafkenche communities of Lake Budi. The goal over time is to expand this reforestation and sustainable livelihood work to support all 115 Mapuche Lafkenche communities in the region.

Our growing team of 20 Mapuche colleagues is dedicated to these initiatives. Their work is critical in our mission to restore ecosystems, empower communities, and create a regenerative economy rooted in Indigenous knowledge.

Refining the Model

Imagine rent being affordable, not because of government subsidies or trickle-down development, but because neighbors support one another. In this system, residents are protected from speculative investors, pool their own resources, make collective decisions, and prioritize people over profit. This may seem like a fairy tale. But that is what the Kelluwün project represents—an attempt to reclaim finance as a tool for community-led transformation, not exploitation.

Building on Indigenous forms of governance, Kelluwün aligns with the growing global movement to reimagine local economies as spaces for building life rather than dependence on external financial systems. In a time when conventional financial systems often fail marginalized communities, Indigenous-led approaches offer a transformative vision of what is possible when we prioritize collective wellbeing over individual gain.

The recent shift of neighboring Mapuche communities to focusing on wetland restoration to increase biodiversity, for example, emphasizes the importance of environmental restoration alongside economic empowerment.

For anyone grappling with economic uncertainty, the Kelluwün model offers valuable lessons. It’s not about how much capital is locked in banks or institutions; it’s about how people use their own assets and relationships—skills, time, solidarity, and even small amounts of cash—to create lasting community change.