Due to the high demand, the First Step Foundation now also grants microcredits to the women of the Anoshe Women Group in the north of Ghana.
So far, Sabab Lou only distributed so-called ‘Small Business loans’ in Chereponi, but no microloans. Given the many requests from the Anoshe Women for smaller loans, it became clear to us, that there was a gap that needed to be filled. Since the First Step Project in Offinso has been running very successfully since 2009, the First Step employees proposed to also launch the program for the Anoshe Women in the northern rural areas of Chereponi, in the north of Ghana.
Due to the many years of experience the First Step Foundation (FSF) has in the field of microcredits, Sabab Lou and its partners decided to bundle all related activities under the umbrella of the FSF. Starting 2018 the responsibility for both – the already running ‘Small Business Program’ and the newly launched microcredit program – now lie in one hand. To ensure a local presence in Chereponi, borrowers are looked after by our longtime Anoshe associate, Akor Fusheini Munkaila, who now works full-time for the First Step Foundation.
How can microcredits support the women?
The main source of income for the families of the Anoshe Women is the sale of their soy beans. However, most of the time it is not enough to sustain the families until the next season. Therefore, many women try to earn extra money with so-called “petty trades”, meaning mostly retail trade. During the times where they don’t have to work on the fields, they sell spices or soap, cooking oil and other daily necessities. Some women also sell products like a type of donuts, rice or yam dumplings, soy cheese and peanut and shea butter.
Here in the villages of northern Ghana there is no supermarkets that you can go to and buy your things, certainly not in the sizes as we know them. Salt, sugar, millet, rice, etc. is packed into small plastic bags in quantities of 20g or 30g and sold in little bundles in front of their houses or on market days in the next larger village or city.
But if you don’t have the money to buy salt, sugar, etc. in larger quantities, the profit margin will stay very slim. The women who do not even have a trading business yet, are missing the capital to invest and get started.
Hence – the demand for small loans is high. With the new microcredit program we want to close the void and enable the women to gain an additional income.
The microloans of about 80 EUR help the women to start a small trading business and generate an additional income. Another important goal for women is to build reserves in a savings account. This gives them access to the financial system of the country and opens up the way to the regulated capital market. Because without an account and savings history nobody is able to receive any kind of official loan. The “First Step Foundation” thus literally helps the borrowers to take the “first step”.
Microcredits are handed out to groups of five
The loans are given to groups of five women each. Each woman receives a personal loan of 400 Cedis, whereas the group is responsible for the repayment of each women. Each group has a chairperson, a secretary, an organizer and a payment officer. Through this system the women develop a close relationship with one another, which in turn reduces the default rate. The loans run for 12 months and can be repaid at any time.