Microcredit/Microfinance

A couple weeks ago, the Tanzania Women’s Bank opened its doors for business in the Tanzanian capital, Dar es Salaam. According to the East African, the bank is the first of its kind in sub-Saharan Africa, where the World Bank estimates that women own 48 percent of enterprises but have the hardest time accessing finance.

Although anyone is welcome to open accounts at the new bank, it targets women who have inadequate capital to grow their businesses. While traditional banks require title deeds or other proof of wealth to open account, the Women’s Bank only asks for an ID and $2 in savings, making it much more accessible to women in a country where a third of the population earns less than $1.25 a day. There are also no monthly fees.
Bank officials say that the opening was the result of years of campaigning by women’s groups. From the East African:

“Women’s groups called for the establishment of this type of bank way back in 1999. They wanted a place where they would be listened to and where their needs would be taken into account,” said Ms Chacha [Margareth Mattabi Chacha, the bank’s executive director].

“It took them 10 years to collect the necessary funds. Their biggest challenge was to satisfy all the conditions needed to be recognised as a bank. So far, the initiative is a success,” she said.

Once the bank is firmly entrenched, the founders plan to expand regionally and, eventually, across the continent.

Although the bank is just a few days old, plans are at advanced stages to open branches in other Tanzanian towns.

“Many women live in the countryside,” said Ms Chacha. “Trips to ATM machines are long and costly. We will make banking available through mobile phones, a service provided by a number of banks in Africa,” she said.

Two weeks after it opened, the Women’s Bank now has over 500 customers, 70% of whom are women. In addition to helping women open accounts, bank staff also teach them basic business skills and money management. Officials hope that the availability of staff to walk women through the various steps and procedures will help make the process less intimidating for Tanzanian women, who like most African women are unlikely or unable to take advantage of formal banks. According to a 2006 World Bank survey, only 5% of Tanzanian women use banking services, compared to 11% of men.

Helping women overcome barriers to accessing credit and controlling their own finances is widely accepted as a key step in transforming communities in the world’s poorest countries. For years, microfinance institutions have targeted women as the recipients of small, low-interest loans on the premise that money invested in women is money invested in families and communities. A study in Brazil, for example, found that a child’s survival probability increases by about 20% when income is in the hands of the mother.

When matched with social and political opportunities, economic empowerment for women can have a multiplier effect on families and communities. So watch Tanzania over the next few years. It’s a country that has made significant progress in areas like health and education in the past decade, but this recent development might be the first step towards a new era.

-Nora Coghlan

Opportunity International President and CEO Kadita,” A.T.” Tshibaka (right) talks with entrepreneur Kabuika Valentine about her business and her family. Kadita was born in the DRC and recently returned to the country to advance Opportunity’s plan to bring microfinance services to the Congolese people who are living in poverty.

Having grown up in the Democratic Republic of the Congo, Opportunity International President and CEO Kadita “A.T.” Tshibaka experienced poverty first hand. Thanks to a hard working family and a timely scholarship, Kadita attended Dartmouth College, where he earned his MBA before starting a career at Citibank. His subsequent success in international banking and his passion for the poor have now led him to Opportunity International – and back to the DRC.

With half of the DRC living on less than $1 per day, the Congolese native is leading the organization’s efforts to bring microloans, savings and insurance services to a country of 66.5 million people.
Recently, Kadita led a small delegation of Opportunity supporters and staff to the DRC to witness firsthand both the challenges and possibilities that exist for his home country.

“As I shook hands with start-up business owners, I was struck by the great potential for microfinance to help expand their businesses,” reflects Kadita. “These entrepreneurs work hard to provide for their families in a country where so many are fortunate when they can eat three or four times a week. They are very focused and determined to succeed. Opportunity International will make a significant difference in their lives, supporting them with adaptable microfinance products and services.”

In the DRC, Kadita listened to the working poor and learned about their need for loans, savings and insurance. He appealed to prominent political, economic, church, and social-sector leaders, who were all excited about the prospect of an Opportunity International presence in the DRC. He met with organizations already in the country to hear about their triumphs and their struggles.

“We bank on the spirit of people and on their hopes and dreams,” Kadita continues. “The people that we met saw this and promised their support. We are both humbled and very encouraged by what we experienced.”

Kadita firmly believes in microfinance as a working solution to poverty. More specifically, he is adamant that banking in the DRC is key to the development of Africa. The DRC has the third largest population and the second largest land area in sub-Saharan Africa. With 99% of the population lacking basic banking services, raising funds for an Opportunity International Bank in the DRC has become one of the organization’s top priorities.

To learn more about Opportunity’s commitment to providing microfinance solutions to the working poor in almost 30 countries, visit www.opportunity.org.

- Sonja Egeland Kelly, Opportunity International

Women pack up their businesses at the end of the day at the crowded Grand Marche market in Kinshasa, Congo

The Grand Marche market in Kinshasa brims with tens of thousands of vendors. To the untrained eye, the market is full of chaos and confusion. To those who dare to look past the sea of people, however, the Democratic Republic of Congo’s largest market is an organized, catalogued, and thriving economic system.

Delegates from Opportunity International on a recent trip to the Democratic Republic of Congo soon discovered that there was more to the story than met the western-trained eye. Visitors are required to gain permission from the Queen of the Market (a title of true honor) to wander around the winding pathways between tightly-packed stalls. The Mayor of the Market lists the vendors present and their businesses as he proudly shows off his domain. The infrastructure is unexpected, and looks different than traditional infrastructure, but it works.

In a market like this it is hard to believe that only 1% of the DRC’s 66.5 million people have bank accounts.

Without access to formal financial services, the vendors in this marketplace are unable to get a loan that will help them to grow their business. They cannot safely save the profits that they make. They do not have the ability to take out insurance to keep them from losing their business if a fire devastated the market. They cannot gain additional structured training.

Opportunity International, a ONE partner organization, has plans to open a formal financial institution (or FFI) in the Democratic Republic of Congo. Ultimately, the organization’s goal is to bring loans, savings, insurance, and training to those who are living on less than $2 per day. With 99% of the population in need of banking services, Opportunity is poised to enter a market with much potential.

In this country roughly the geographical size of Europe, plagued by war, economic instability, and corruption, an Opportunity International formal financial institution can help to make the difference between families being able to afford only three meals per week to families being able to afford three meals per day.

To learn more about Opportunity’s commitment to providing microfinance solutions to the working poor in almost 30 countries, visit www.opportunity.org.

-Sonja Egeland Kelly, Opportunity International

The food crisis is taking its toll on Opportunity’s microfinance clients. Opportunity International is one of the largest and oldest microfinance networks, and I’ve seen first-hand how a small business loan or a safe place to save hard-earned money can make a big difference in keeping food on the table for the poor. Yet in 16 years of working in microfinance, I haven’t seen anything quite like global reach of the current food crisis.

One of Opportunity’s clients in India, Selvi Mani, just told us:

“We have reduced our consumption of vegetables and meat. Last week, we went to the market and brought provisions for ($4.50) This week, the same items cost ($7).”