Rural communities in northern Ethiopia weren’t sure they could trust what they were hearing. How could anyone benefit by setting aside the equivalent of a few pennies each month? Come visit the Weini savings and lending group a year and a half later, and they are singing a new tune.
At first, saving was slow. But month after month, the individual savings of the 25 members grew to the point that the group decided to invest in some poultry. Assigned members now care for six chickens, sharing half of the profits received from selling eggs or breeding chicks with the group.
Take Brikti. With a loan of $30, she bought small amounts of food, like salt, sugar and peas. She now sells items each day from her tabletop store, using the profits to pay back her loan with interest and purchase basic supplies for her own family.
Now the group is considering investing in a motorbike to use as a taxi service or possibly a grinding mill to earn more joint profits.
“We don’t want any free aid. Now you have shown us the way,” the group’s chairman said.
Caritas Africa and its partners held a forum 13-15 September in the Ethiopian capital Addis Ababa on how micro-finance programmes can create livelihoods that end up lifting millions of people out of poverty.
Caritas members in Africa are presently running many micro-finance programmes that provide access to a small amount of capital to people who use it to set up businesses. The programmes allow families to save up money and overtime repay the loans. Caritas targets the self-employed poor who have little or no access to formal credit or savings services.
Studies indicate that women are more likely to use their loans and profits to benefit their families by investing in their businesses and using additional income to meet household needs such as purchasing more and better quality food, improving family housing and health care, paying children’s school fees, and saving for the future.
For example, Caritas Uganda started its micro-finance activities as an emergency relief fund to war widows and people who lost their homes because of conflict. It grew into the Centenary Rural Development Bank, which the largest microfinance institute in Uganda and the second largest bank in the country.
Delegates at the Addis meeting shared best practices and agreed on a joint plan aimed at promoting unified micro-finance activities in their countries.
HG Archbishop Cyprian Kizito Lwanga of Kampala, President of Caritas Africa said, “Micro-finance is a proven strategy towards achieving the MDGS. Support it and give it a chance.”
The Weini savings and lending group were supported by CRS, one of our Caritas members in the USA. Read more about their work on micro-finance