Banking on time deposits

PUBLISHED : Tuesday, 23 September, 2008, 12:00am
UPDATED : Tuesday, 23 September, 2008, 12:00am

New York

With its supporting pillars falling one after another, Wall Street was in panic mode last week. From bankers to push-cart vendors, much of the city has been trying to cope with chaos. But there will always be winners amid such despair - and Mashi Blech might be one of them.

Ms Blech runs two bank branches in New York, with the first opening at the end of 2006 and the second this April. They have both grown very quickly - thanks in part to the economic downturn - and now she is planning to open a third.

She is not a traditional banker, though. What her customers deposit and withdraw is not cash, but time.

Based on a concept first raised in the US in the 1980s, TimeBank is an innovative form of volunteerism based on the structure of a commercial bank. Bank members with different skills provide services to one another free of charge. The time that one person spends providing a service is credited to their account, then used to obtain the services of another member.

The idea has emerged in different forms around the world. Today, there are 300 TimeBanks in 26 countries. But in New York, one of the five cities in the US where the original experiment took place, TimeBank didn't begin to get traction until Ms Blech set up her first branch in Washington Heights.

In 18 months, the branch quickly attracted more than 400 members. The second branch, opened to cover Manhattan's Lower Eastside and Chinatown, already has more than 80 members.

Membership is as diverse as New York itself. Participants range in age from seven to 90, their incomes from almost nothing to six figures, and their skills from marketing and teaching to gardening and pet care.

'You are not going to believe how far we went,' said Ms Blech. 'There are economic reasons. In this hard time, people are looking for ways to save money.'

Anna Miyares, an early TimeBank organiser, knows how effective the bank can be at helping its members save money. Ms Miyares, who helped Ms Blech set up both New York branches, bought a dress for US$29.99 last year. It was a bargain but needed some fixing. She went to a tailor who told her the charge would be US$103. Shocked, she asked TimeBank for help and a member who is a seamstress for Victoria's Secret finished the work perfectly. And the cost for Ms Miyares? Three 'time dollars', which she has already earned teaching Spanish.

But for Ms Miyares - who used to be a 'real' banker - the biggest attraction of TimeBank is the community it helps to build. '[The Wall Street crisis] is a wake-up call to make people aware that money is not everything,' she said. 'It's not how much money you have, it's how much you can exchange with your experiences and skills. You are secure. You are bringing balance to your life.'

This is indeed what Edgar Cahn, the father of TimeBank, hoped to achieve. The Yale law school graduate and social reformer created the time dollar in 1980 to rebuild what economists called 'the core economy' - the invisible economy created by families, friends and neighbours that is not measured by cash.

'I think Wall Street symbolises the definition of value that is defined by wealth and market price. TimeBank is really pushing a set of values that I think are universal in terms of our ability to care for each other, to come to each other's rescue, to celebrate and grieve together,' said Dr Cahn.

Tomorrow: London