Micro credit for transformed futures
A pilot project providing small loans and savings schemes for small scale entrepreneurs in Burkina Faso. Many rural families lack access to traditional banks and this project will allow them to set up and develop a small business, offering the opportunity to work their way out of poverty.
March 2018 - March 2019
Charity information: Transform Burkina
Many rural communities across Africa lack access to credit to develop small businesses. In Burkina Faso, as elsewhere on the continent, traditional banks are based largely in cities and charge high interest rates as well as demanding collateral for any lending. In addition, the absence of either the culture or facilities to encourage regular savings means families can lack reserves of cash to cover short term crises such as medical costs or poor harvests.
The project will set up village based savings and lending schemes in the north of Burkina Faso, administered through an independent and properly registered entity. Each scheme will be run by local people, who will encourage and administer regular small saving by its members. Training will be provided and, in addition, small loans will be offered and administered by members, funded initially by a capital injection, then, in due course, from loan repayment funds and capital from savings.
Support small scale rural entrepreneurs to develop their businesses by improving access to credit.
Activities» Register an independent, legally constituted entity to manage credit and savings schemes in accordance with local statutory regulation.
» Create and train local community groups able to identify beneficiaries and manage repayments etc.
» Monitor and evaluate the initial tranche of micro credit loans.
Take up numbers for micro credit and repayment rate for loans. Success of the businesses developed as a result of the loans taken out.
Support the creation and development of local savings schemes.
Activities» Create and train local community groups, with management committees able to run savngs schemes for their members.
» Monitor and evaluate the initial tranche of savings schemes.
» Train the savings clubs in the process by which accumulated savings can begin to be used as a capital resource from which to make future loans.
Number of peple joining the savings schemes and regularity of svaings being deposited. Extent to which local committees are able to self manage the schemes and consider loans.
Create a culture of savings and micro credit in local communities.
Activities» Offer training to all local groups in the features and benefits of savings and credit in their context.
» Use the experience and examples of good practice gained from this initial phase to promote the opportunities in current and new communities.
A combination of the above measures. In addition we will monitor requests recieved from new communities and individuals to join savings schemes and take out micro credit loans.
We aim for increased self-reliance in local communities. The changes we want to see as a result of this project include:
A more entrepreneurial culture, leading to economic development and the growth of the cash economy.
Families moving from subsistence based livelihoods to ones where they have the means to, for example, pay for medicines or to send their children to school.
A savings culture which gives families a financial cushion against sudden shocks such as illness or harvest failure.
Financial malpratice or theft: A separate legal entity with robust monitoring processes, together with peer control of local funds.
Poor loan repayment: Careful selection of beneficiaries and peer monitoring of repayments.
Economic shocks e.g. harvest / business failure: There is flexibility to adjust repayment terms in the light of local condition and experience from other schemes suggests repayment rates are high.
Poltical instability: The community focus will reduce outside influence.
An end of project financial and narrative report with case studies will be prepared. This will also include recommendations for future phases of the project, based on the monitoring and evaluation work undertaken. This, with an executive summary, can be shared with donors if required.
Budget - Project Cost: £10,000Loading graph....
Amount Heading Description £500 Transport costs Petrol and vehicle hire to visit communities £400 Office costs Contribution to local office costs £2,100 Salary costs For scheme Co-ordinator £5,000 Loan finance Funds to make small loans to c80 individuals £1,000 Monitoring and evaluation To research and prepare appropriate reporting £1,000 Admin and contingency Including allowance for currency fluctuation and reporting to donors
Burkina Faso, In West Africa is one of the poorest countries in the world, with recent United National Development Programme rating it 183rd out of 188 in 2016. Figures indicate that 75% of the predominantly young population live in rural areas and 80% rely on subsistence agriculture. Climate change and progressive desertification is making agricultural production using traditional methods riskier and there are currently limited alternatives, Access to traditional banks is very limited.
Direct beneficiaries in the rural area around Gourcy, north west Burkina Faso, will include the c80 people who will benefit from micro credit loans and c250 people involved in savings clubs (c 10 clubs).
By generating new businesses and creating a culture of saving, we would also aim to see a wider economic upturn, indirectly benefitting many hundreds more people as more opportunities for diversification and income generation emerge.
As one of the few UK based charities focusing our work exclusively in Burkina Faso, we have excellent local contacts and wide experience of development work in the country. We have been active in a range of projects in the areas of health, education and clean water since 2010. This new project has been designed by our local partner, AEAD, based on local research and discussions both in local communities and with us.
Read more about the Charity running this project.
AEAD (Partner NGO)
Led by Phillippe Ouedraogo, AEAD, working with the financial institution AEC-Grenier Joseph, will be responsible for delivering the project.
Project Manager - To Be Appointed
Based in Gourcy, this person will work with the communites and individuals to set up, develop and monitor the micro credit and savings schemes.
Kevin Lawrence - Transform Burkina
Resposnible for liaison with all parties and reporting to donors.
Community Members Around Gourcy
Setting up savings schemes and successful small businesses with the credit they are offered
Will provide a loan for another local entrepreneur to start their own business in Burkina Faso.
Now I can sell my chickens in the local market and have enough money to send all of my children to school.