Where does one go to access credit in a rural village, hours from the nearest town? A woman, landless, without any assets to her name? Someone living hand to mouth, struggling to make ends meet, with barely enough to support her family let alone pay service fees and inaccessible interest rates? Considered a high risk for defaulting and not taken seriously because of the little return she would offer. Where is one to go to search for a chance to escape this cycle? My experience has taught me the answer, lies in some of the most unexpected places. Inside the gates of a nursery school, under the shade of a tree, in a field beside a church or in a community hall. For the families we work with, these are places that have become the “banks” they visit to access credit, providing them with an opportunity, an opportunity for many things, but above all, an opportunity that they would otherwise not be able to access, with the potential to uplift and change their lives. They come to these places to meet as a community who work together to save money and support each other in accessing credit.
These meeting places serve as the venue for micro-finance activities. Groups of 15 to 30 people come together to contribute savings which serves as a communal pot of money which can be loaned out to the members. The groups are first taught basic budgeting skills and planning for savings. Each group establishes its own set of rules, deciding upon the minimum monthly contribution for savings, interest rates and other fines and fees which contribute to the available moneys for loaning. They write their own constitution for group activities and repercussions for default. Each group elects its own chairperson, treasurer and secretary to govern the group and record the activities. It is the group that decides its objectives and goals to support one another. The groups are also supported with a series of trainings on micro-enterprise to help guide them on how to utilize the available money to start their own small businesses. Some groups decide to work collectively on a project and others have their own individual business. Each group is unique, including their own group name and they are all registered as Community Based Organizations (CBO’s) through government certification. The members of the group are located in the same neighbourhood, often already acquainted with one another. I have come to understand that what makes this system possible and furthermore successful, is the network and bond between group members, and at the very foundation, it is trust. Based on mutual reciprocity, they hold each other accountable as they all have a share and invested interest in the credit and they are all affected when someone doesn’t hold up her end of the commitment.
These micro-finance groups act as an alternative source for credit, small loans, that can really assist families in generating income and improving livelihoods. This approach to development places the power in the hands of those who know best what their needs are and how they wish to improve their situation. Above and beyond accessing funds to make their goals a reality, the micro-finance groups also foster confidence and self-sufficiency, encouraging independence and taking a more active role in their communities. The group meetings provide a space for the members to make decisions for themselves, take risks in a supportive environment and grow together.
I was fortunate enough to sit in on training for a newly formed group and was able to learn about the process involved in establishing group activities. I could sense the apprehension and skeptical eyes around the room, as the members heard about the potential this group could have on their futures. I am certain, it was hard to imagine how saving, and the equivalent of $2.50 CND per month could ever possibly make a difference or amount to anything. How could they make something out of “nothing”. Although I sat as a quiet observer that day, at the closing of the training I was asked to address the group. I couldn’t help but be excited for them, telling them what amazing opportunity it was, how successful they could be if they work together, and the great potential that the group offers. With a little time, patience and diligence, their savings would grow and make what seemed impossible, possible. In that moment I was reminded of the Swahili proverb, haba na haba, hujaza kibaba, which literally translates to “little by little, the container gets filled”. Holding a powerful message of hope and life lesson about persistence, this wise proverb teaches us we mustn’t underestimate the value of a single drop, because drop by drop, eventually, the bucket will get filled.
Patricia Butt is working as an eRoots Coordinator with Crown the Child Africa in Kenya.