|RUC2014 Blog 7: Collateral-free credit: A tool for empowerment of rural women in Ghana|
|Tuesday, 24 February 2015 09:52|
How can research contribute to helping poverty-stricken women in Ghana? This article, first published by Kwame Nkrumah University of Science and Technology and produced by KNUST’s Courage Julius Logah as part of a Research Uptake Communications [RUC2014] coaching programme, looks into how interest free microloans can be atool for empowerment of rural women in Ghana.
This blog, from KNUST, is the seventh in this blog series*. More information about the RUC 2014 campaign can be found here.
What if microcredit schemes could be effectively delivered to vulnerable rural women to accelerate and maximize women empowerment gains, saving them from the ever-open arms of abject poverty?
Life in abject poverty
One can only imagine the depths of disempowerment experienced by a 48-year-old widow in Goli, a rural community in the Nadowli district. Living in abject poverty, she had no source of income, no formal education, no land on which to grow food and four children to look after. In order to survive she and her children collected firewood to sell. These were children that should have been in school but didn’t have the option given the dire circumstances. When her plight came to the attention of World Vision, an international non-governmental organisation, she was encouraged to join one of the women’s groups in her community to access the collateral-free credit they were providing to women’s groups at the time. She did this, and was subsequently able to access the credit. She invested in brewing pito – a local beer.
How a microloan helped a woman make a life and feed her children
Speaking of her experience, she said:
“Me, I will say the loan I got from World Vision was a saviour. It is very good that I got this loan. Before I had this loan to start my pito brewing business I was the home type and very poor and timid. I used to stay home and do nothing. Those times poverty was my friend. I could not mingle with my fellow women because of shame and all that. But now that I'm doing this business and I am earning some income I can feed my children and all is well as keep them in school. In fact I can say I feel very confident now. I am not ashamed to socialize with other community members. I don’t fear. I can afford to travel to Nadowii market, Sankana market, Tangasi market, Bussie market, and even Wa (the regional capital) without any problems.”
How the system works
Ganle et al (2014), motivated and excited by the high potential to impact the lives of rural women in a positive and powerful way, undertook this investigative study into World Vision Ghana’s microcredit programme targeted at rural women. Modelled on the approach of the Grameen Foundation, the programme lends to poor individual women within a group. Microcredit is simply the extension of small amounts of collateral-free institutional loans to jointly liable poor groups of members for their self-employment and income generation (Rahman, 1999). The groups typically consisted of 10 to 20 individuals. Based on the loan managers evaluation of the group’s capacity to pay back loans, an average loan size of 15 Ghana cedi (then approximately US$15 and now approximately US$5 was disbursed with the potential of increasing loan amounts subsequently, in six month cycles.
What success can look like
The study provided evidence that rural women, who were typically disempowered as they depended on their spouses income, were, as a result of the microloan, able to generate income to contribute to, or independently feed their children. This intervention enabled a level of self empowerment and is one of the solutions worth exploring to address the problem of sustainable wellbeing and livelihood of rural women. This is group that has been relatively marginalised in the development process, in Sub-Saharan Africa more generally, and Ghana in particular.
It doesn’t always work
Even though the study revealed that some women were empowered, others, accessing the credit with the same intentions and purposes, were disempowered by it. The need to adequately understand the socio-economic and cultural context and barriers is a crucial success factor in the disbursement of credit to poor rural women.
Focusing on the Positive insights
The potential of microcredit to act as a vehicle for change that impacts positively and powerfully on rural women cannot be over emphasised.
Alexander Yao Segbefia