The sucessful micro-credit program helps the real poor
In the year 2009 the German Stiftung Sabab Lou started its micro-credit project in the Ghanaian town of Offinso in the Ashanti region. The project called So Memu program was aimed to help single mothers and people living with HIV (PLHIV) to start a new business or enhance their existing ones. Overall objective was to generate a regular income for the needy and less privileged people in the society, so that they will have the dignity of providing for themselves, thereby reducing poverty in our society. This way the program has helped successfully hundreds of beneficiaries in the past 3 years. The program not only helped the women to develop their business but also to sustain it over the years. The simple reason for this success was that the program supported the beneficiaries before, during and after the loan period. They were not left alone. They were assisted in developing their business idea, in implementing it during the loan and sustaining it after the pay-back of the loan. Therefore, no wonder, demand for the program was growing continuously.
In order to organize and manage the anticipated growth of the program Stiftung Sabab established its own Ghanaian NGO called First Step Foundation (FSF) in August 2012. First Step Foundation provides small loans as start-up capital to the poor and willing women to start and grow their own business. The foundation also offers business advisory services to the members and ensures that they do some savings on their businesses. Banks in Ghana usually require collateral securities and are not interested in granting small loans to poor people. First Step Foundation has therefore developed a model in which the borrowers are taken through assessment, business advice, calculation, group formation, contract form and loan disbursement scheme. The project offers flexible payback plans and charges low interest rates. It does not require any initial deposits before loans are granted, and it works with group formations on the loan disbursement to ensure its repayment.
Summing up, the small loans with a maximum amount of GHS 200.00 (80 EURO) have helped and will help hundreds of single parents, PLHIV and other vulnerable groups to take up petty trading and earn some income for themselves and their families, especially for healthcare and their wards’ education. The project has brought a lot of relief for many willing people who were finding it difficult to get a start-up capital.