Greetings, or as they would say here, antiri! (Good afternoon) To that you would reply: Naaa! I have had trouble updating this site the last couple of times I went to town, as the internet was excruciatingly slow, but now let me give you guys a short update.
This week I was happy to take the chance to go with one of the Loan Officers, Alidu, to give a second loan to some women’s groups which have a very good repayment history. Naturally the ladies were very happy to see us! We all sat on benches in a big circle under a tree, in the usual fashion for any community meeting here. One at a time Alidu gave each lady a packet of notes the size of small brick, totalling two million cedis per person(about 117 UK pounds or $AUS 282), which everyone then painstakingly counted (a good thing actually as the bank had miscounted and 5 women were short 20,000 cedis!). Each lady had to sign or thumbprint that she had received the loan, with all except the group secretary, a younger lady, thumb printing as they cannot read or write. (The literacy rate is very low for women in the Northern Region (4%) so the group secretary is often a man, as they are the ones who can read and write.)
The group is usually 20 - 30 women, and the group leaders sign on behalf of the group that they will pay back the loan: they are now responsible for collecting the repayments from members and giving them to the Loan Officer each month. Most loans have to be paid back over six months at 15% interest (i.e.; 30% per -annum, a bit more than the banks charge I think – but they would be unlikely to lend to our clients anyway).
Alidu then had to explain to the ladies that they had to hand back 200,000 cedis from the loan as savings, Simli Pong is finally introducing compulsory savings of 10%. Some weren't very happy about it and all asked why, and Ali gave the background: Simli Pong has just become independent from the organization it was previously with, and has also stopped receiving funding from our donors (the Danish government). Therefore we have to make sure that we receive all the loans back from our clients: if not, the capital we have will slowly run down and sooner or later Simli Pong will collapse. It also means that all our running costs (ie; staff salaries, utilities, fuel, etc) must be paid from the interest generated on the loans, or we will start eating into the capital and again threaten our existence.
For the organization, this is a significant shift from the past, where loans were often given to the rural women who attended training at our ‘mother NGO’, regardless of their ability to repay, and it wasn't even considered to be very important whether or not the loan was repaid. This has been the downfall of many a small NGO giving micro-finance, but hopefully Simli Pong will successfully navigate the change to self-sustainability.So now the whole system has to be tightened up, including starting compulsory savings, and once all this was explained the ladies understood. Compulsory savings is an essential micro-finance practice anyway, and savings are used as a sort of collateral if the women experience some kind of serious problems or the group falls behind on its repayments.
I was along just to watch, but I ended up cross-checking the compulsory savings and the loans of the ladies who were short and I believe my counting technique for wads of cash is coming along nicely. I was also to take a couple of pictures for the annual report, so I began by snapping the Magazia (women's leader) as she received her loan. After this every single lady wanted to be snapped receiving their loan, so I became the Official Photographer, snapping each lady as she received the cash from Alidu, all in that pose reminiscent of politicians where both parties freeze and look at the camera as they shake hands. The ladies of the second group also decided that I should have a Dagbani name and therefore named me Suyini - which luckily I quite like! It means One Heart, and sounds kinda Bob Marley don't you think?
Pics of the ladies will follow soon (once I can find a camera cable that works), but meanwhile, I'll sign off, hoping you are all well and happy!