With this classic microcredit project, we’re helping hundreds of extremely poor women build a small business in the city of Offinso in the Ashanti region.
The loans amount to between 80 and 100 euros. Each of them has a duration of 12 months and is repaid in equal installments every 14 days. The women are grouped together to create groups of five and the entire group is responsible for repayment. We place great importance on the fact that the women are able to generate a stable income and build savings, so that they can continue to operate their business in a sustainable manner. We train them in accounting, and we advise them on all business-related matters. The interest on the loans accrues at a monthly rate of 2.5%, with the interest earned being used exclusively for the operation of the project’s organization. The Sabab Lou Foundation provides credit funds of up to 15,000 euros; it doesn’t yield any income on those funds.
Close monitoring and leadership are important ingredients in the recipe for the success of this project, which has been around for eight years already and is going strong. A default rate of 1 percent, which is mostly due to cases of death, speaks for itself. In 2017, the foundation will withdraw itself from project management and hand over the responsibility of the project to its partner organization, the Ghanaian FIRST STEP FOUNDATION. However, we will continue to report on the project, especially since Sabab Lou will increase the loan fund in 2017.