For the poor or the poorest?
MetadataShow full item record
CTA. 2001. For the poor or the poorest?. Rural Radio Resource Pack 01/3. Wageningen, The Netherlands: CTA.
Permanent link to this item: http://hdl.handle.net/10568/57159
Florence Chiburesha explaining how the Women Finance Co-operative is supporting development for Zambian women and their families.
For the poor or the poorest? Cue: Who can benefit most from credit? Men or women? Rich or poor? It is often argued that those who are categorised as poorest of the poor are frequently unable to use loans effectively. Instead they use them to buy their daily needs, and fail to gain extra income from the loan. Zambia?s Women Finance Co-operative is a Micro-Finance Institution or MFI, that targets poor women, who are supported in starting small businesses. However, as Florence Chiburesha, the Executive Director of Women Finance explained to Chris Kakunta, the co-operative does not target the poorest of the poor. Those that are targeted for loans are encouraged to make their own decisions about how they use them, and how they make their repayments. IN: ?We don?t want to tell? OUT: ?want their country to be run.? DUR?N 4?23? BACK ANNOUNCEMENT: Florence Chiburesha explaining how the Women Finance Co-operative is supporting development for Zambian women and their families. Transcript Chiburesha We don?t want to tell a client which business to go into for the simple reason that I am the one giving the loan. If I tell them which business to go into and it fails they will come back to me and say ?I can?t repay the loan because you told me which business and it has failed?. But we will provide options for them, we will tell them, ?Well these are the options available to you?, and then the women would then make an informed decision as to which is more viable and which they should go into. Kakunta How about in terms of the schedule for loan repayments, does it suit the women entrepreneurs? Chiburesha We would like to believe it does. In fact one of the reasons when we ask clients why they prefer us as opposed to other MFI?s that are providing the same services most of them will say that because of our repayment schedule. We allow clients to start repaying on a monthly basis. When they take out the smaller loans we are saying to them that in fact it is easier to make weekly repayments but we don?t force them to make these weekly repayments. If they still opt to make the monthly repayment they go ahead. Because you must realise, the bigger the loan the more time you need to give them to make their first weekly repayment. We?ve also noticed that in fact if they start to get bigger loans and you continue to ask weekly repayments most clients will drop out because the weekly repayment then becomes too large for them to manage. Kakunta So do you feel giving loans really assists the poorest of the poor in the communities? Chiburesha Two things. I think the impact of giving loans to the poorest is minimal. I mean the impact is less, maybe not minimal, the impact is less than if you gave a loan to somebody that is not categorised poorest of the poor. Simply because the poorest of the poor take less risks. So it means that their business will not really grow and most of their money will go into subsistence. So the impact I think is not as much, they have to graduate and move to another category I think, for the loan to have higher impact. Also sometimes the poorest of the poorest to begin with don?t need loans. They probably need some kind of social welfare assistance until they get to a level through training, through exposure, through assisting them first with their basic needs until they get to a level where then they can access a loan and really plough it back and help that business to grow. Kakunta So on average what have been your recovery rates? Chiburesha In the last two years, 2000 and 2001, Women Finance has experienced a repayment of between 95 and 98%, currently as I?m speaking as of July 31st 2001 the repayment rate was 98%. Kakunta What do you think has led to this programme to be successful? Chiburesha I think the major thing is probably that it?s responsive to the client needs and the service that we provide, we would like to believe, is not supply driven. It?s not the MFI coming up and deciding it needs to set up and provide this service. I think our service is demand driven. We also run a savings programme and I think the clients see that once they take out a loan and they are doing the voluntary savings this acts as a buffer in case they can?t pay back the loan or in case they undergo some kind of crisis in their daily lives. They are then able to fall back on these savings and use them. And I think also the very fact that we allow for flexible repayment schedules. Kakunta Finally is there anything that you want to get across in as far as your organisation is concerned, and services that it?s offering to the small scale entrepreneurs? Chiburesha I think as Women Finance we still believe that we have the mandate. Our programme is demand driven. As you know micro-finance industry in Zambia is still in its infancy and would like to believe that there is still a need for women to access credit. We believe that this helps; one, the woman herself economically. Also it trickles down to the rest of her family. They are able to meet their needs and they are able to eventually become equal participants in making choices about how they want their country to be run. End of tape.