African Microfinance Used to Fight AIDS, Malaria

[Guest guest]

African Microfinance Used to Fight AIDS, Malaria

Canoe News Network

Budding African Entrepreneurs Provide Proud Face of Microfinance

Revolution

By ALEXANDER PANETTA

BAMAKO, Mali (CP) - In a humble cement building with an unfinished

second storey lives an idea just big enough that it might change the

world.

The proud smiles on the faces of those whose lives it has already

touched put a human face to the potential of the microfinance

revolution.

The concept has already inspired a Nobel Peace Prize along with new

hope for millions, which in poverty-stricken Africa is as fresh as

the new coat of paint on these walls.

Several local woman happily share their stories outside the newest

branch of the Nyesigiso microfinance institution.

These young women have a few things in common: they are natural-born

capitalists, they are successful entrepreneurs, and they're not

counting on your charity.

All Kamba Guindo needed was a bank loan.

Now she runs two businesses, including one that exports to Nigeria,

and feeds 30 family members including her two brothers, her mom, and

cousins.

" This helped me, " Guindo said through a French-language interpreter,

standing next to the wooden booth that holds a community telephone.

" It helped improve my quality of life. It helped me look after

myself. And now I can help my family. "

Since traditional banks would never have lent her the C$700 she

needed to start a business, she opened an account at a Nyesigiso

branch and built up enough savings to qualify.

Her first loan was paid off within months as sales of her handmade,

traditional African clothing skyrocketed, and she began exporting to

Nigeria.

She has since taken out a second loan and has opened another business

selling papaya and pineapple drinks by a dusty highway.

There are vivid reminders alongside the road crossing the Malian

capital of the crippling poverty that exists on this continent.

A passing Canadian visitor might find some quaint charm in the

thatched huts that line the congested highway. They would be hard-

pressed to find any exotic allure in the piles of garbage and

surrounding shacks with plastic tarp for walls.

Which is why the latest Nyesigiso branch, for its modest size, towers

over the neighbourhood in stature and in the ambition it represents.

The only adornment inside the spartan building are the Dell desktop

computers that keep track of the savings and loans of the

institution's members.

Four years ago, Kouyate Salimata's son was an out-of-work mechanic

trying to support a family. She borrowed $2,000 from a Nyesigiso

branch so that he could buy a rickety van to use as a public-transit

vehicle.

He paid the interest of 15 per cent within a year, got a second

vehicle, is now building a house for his family, and dreams of a

fleet of transport buses.

Nana Traore's family faced dire economic prospects when her father

died four years ago. She started saving, borrowed $400 to import

jewelry from Guinea, and at age 22 has already bankrolled a similar

business for her mom.

A leading Canadian microfinance expert who accompanied Gov. Gen.

le on a visit to Nyesigiso this week says the concept is

based on some old ideas.

The first is access to the free market.

Second is the credit union model which has existed in Canada since

the turn of the 20th century, says Coyle, head of the Coady

International Institute and vice-president of St. Francis Xavier

University.

It takes just a pittance for members to open a savings account and

they instantly become shareholders in the institution. Then they can

qualify for progressively more generous loan conditions based on

their savings and history of repayment.

" It's the same conditions that drove Alphonse Desjardins (to create

Quebec's Caisse populaires) and Moses Coady, who took the idea to

English Canada (in Halifax), " Coyle said.

" There are carrots and sticks built into the system. "

The carrots and sticks vary from country to country, and from one

institution to the next.

One popular practice, called solidarity group lending, allows people

to save and borrow together.

When one person defaults on a loan, the entire group loses access to

credit. Fear of becoming a community pariah and losing that access

encourages timely repayment.

Solidarity lending is popular in Bangladesh, where Muhammad Yunus

pioneered the use of microfinancing as an international development

tool in the 1970s when he launched the Grameen Bank.

The economist son of a jewelry salesman will receive a Nobel Peace

Prize at an awards ceremony early next month.

Over 100 million poor families around the world have become members,

and a recent microfinance summit in Halifax set a target of reaching

75 million more by 2015.

The Canadian government and the now-powerful Mouvement Desjardins

helped launch the Nyesigiso network in 1989. The group, whose name

means " House of Providence " in Mali's Bambara language, now has

120,000 members.

Coyle says she has seen the model succeed around the world, including

in poor Canadian communities. She scoffs at the suggestion that it

doesn't work in some places.

In areas where it has struggled, including parts of Africa, Coyle

blames poor management.

Corruption is one occasional problem.

So are the organizations, she says, that charge bargain-basement

interest rates with the help of subsidies from governments and non-

governmental organizations.

When those subsidies run dry, institutions can collapse. Whole

communities are left without access to capital because the cheap

loans drive other, self-sustaining institutions out of business.

" I believe it has failed because some people get into it without the

right expertise, " Coyle said. " It's bad planning. "

But she is adamant that governments and organizations still have a

role to play, especially in the initial phase.

Institutions can only get off the ground with equipment like

computers and office space, and trained employees, which all cost

money.

Microfinance proponents complain that wealthier countries, including

Canada, have slowed down their contributions after an enthusiastic

start in the 1990s.

Coyle says there will also always be a need for traditional foreign

aid.

Entrepreneurship alone won't build schools, hospitals, and public

infrastructure, which are all crucial to economic development.

But microfinance is not about handouts and never will be. It's about

providing market access to hundreds of millions of people who are

invisible to big banks.

" It's about making people masters of their own destiny. That's the

end game, " Coyle said. " We are starting to no longer see poor people

with pity, as people we should feel sorry for. "

Still, the litany of problems plaguing Africa, such as poverty, AIDS,

and violence, are as painfully obvious as the littered scraps by the

highway that crosses the Niger river.

But a nearby juice stand serves as a reminder of something less

obvious: the panoply of solutions that are as limitless as the human

imagination.

Some discover hope in pineapple and papaya. Some find it on a bus.

http://www.businessfightsaids.org/site/apps/nl/content2.asp?

c=gwKXJfNVJtF & b=1028663 & content_id={0FA96EAC-FEEA-45CC-A4A9-

4D2F0A7182D8} & notoc=1

[Guest guest]

African Microfinance Used to Fight AIDS, Malaria

Canoe News Network

Budding African Entrepreneurs Provide Proud Face of Microfinance

Revolution

By ALEXANDER PANETTA

BAMAKO, Mali (CP) - In a humble cement building with an unfinished

second storey lives an idea just big enough that it might change the

world.

The proud smiles on the faces of those whose lives it has already

touched put a human face to the potential of the microfinance

revolution.

The concept has already inspired a Nobel Peace Prize along with new

hope for millions, which in poverty-stricken Africa is as fresh as

the new coat of paint on these walls.

Several local woman happily share their stories outside the newest

branch of the Nyesigiso microfinance institution.

These young women have a few things in common: they are natural-born

capitalists, they are successful entrepreneurs, and they're not

counting on your charity.

All Kamba Guindo needed was a bank loan.

Now she runs two businesses, including one that exports to Nigeria,

and feeds 30 family members including her two brothers, her mom, and

cousins.

" This helped me, " Guindo said through a French-language interpreter,

standing next to the wooden booth that holds a community telephone.

" It helped improve my quality of life. It helped me look after

myself. And now I can help my family. "

Since traditional banks would never have lent her the C$700 she

needed to start a business, she opened an account at a Nyesigiso

branch and built up enough savings to qualify.

Her first loan was paid off within months as sales of her handmade,

traditional African clothing skyrocketed, and she began exporting to

Nigeria.

She has since taken out a second loan and has opened another business

selling papaya and pineapple drinks by a dusty highway.

There are vivid reminders alongside the road crossing the Malian

capital of the crippling poverty that exists on this continent.

A passing Canadian visitor might find some quaint charm in the

thatched huts that line the congested highway. They would be hard-

pressed to find any exotic allure in the piles of garbage and

surrounding shacks with plastic tarp for walls.

Which is why the latest Nyesigiso branch, for its modest size, towers

over the neighbourhood in stature and in the ambition it represents.

The only adornment inside the spartan building are the Dell desktop

computers that keep track of the savings and loans of the

institution's members.

Four years ago, Kouyate Salimata's son was an out-of-work mechanic

trying to support a family. She borrowed $2,000 from a Nyesigiso

branch so that he could buy a rickety van to use as a public-transit

vehicle.

He paid the interest of 15 per cent within a year, got a second

vehicle, is now building a house for his family, and dreams of a

fleet of transport buses.

Nana Traore's family faced dire economic prospects when her father

died four years ago. She started saving, borrowed $400 to import

jewelry from Guinea, and at age 22 has already bankrolled a similar

business for her mom.

A leading Canadian microfinance expert who accompanied Gov. Gen.

le on a visit to Nyesigiso this week says the concept is

based on some old ideas.

The first is access to the free market.

Second is the credit union model which has existed in Canada since

the turn of the 20th century, says Coyle, head of the Coady

International Institute and vice-president of St. Francis Xavier

University.

It takes just a pittance for members to open a savings account and

they instantly become shareholders in the institution. Then they can

qualify for progressively more generous loan conditions based on

their savings and history of repayment.

" It's the same conditions that drove Alphonse Desjardins (to create

Quebec's Caisse populaires) and Moses Coady, who took the idea to

English Canada (in Halifax), " Coyle said.

" There are carrots and sticks built into the system. "

The carrots and sticks vary from country to country, and from one

institution to the next.

One popular practice, called solidarity group lending, allows people

to save and borrow together.

When one person defaults on a loan, the entire group loses access to

credit. Fear of becoming a community pariah and losing that access

encourages timely repayment.

Solidarity lending is popular in Bangladesh, where Muhammad Yunus

pioneered the use of microfinancing as an international development

tool in the 1970s when he launched the Grameen Bank.

The economist son of a jewelry salesman will receive a Nobel Peace

Prize at an awards ceremony early next month.

Over 100 million poor families around the world have become members,

and a recent microfinance summit in Halifax set a target of reaching

75 million more by 2015.

The Canadian government and the now-powerful Mouvement Desjardins

helped launch the Nyesigiso network in 1989. The group, whose name

means " House of Providence " in Mali's Bambara language, now has

120,000 members.

Coyle says she has seen the model succeed around the world, including

in poor Canadian communities. She scoffs at the suggestion that it

doesn't work in some places.

In areas where it has struggled, including parts of Africa, Coyle

blames poor management.

Corruption is one occasional problem.

So are the organizations, she says, that charge bargain-basement

interest rates with the help of subsidies from governments and non-

governmental organizations.

When those subsidies run dry, institutions can collapse. Whole

communities are left without access to capital because the cheap

loans drive other, self-sustaining institutions out of business.

" I believe it has failed because some people get into it without the

right expertise, " Coyle said. " It's bad planning. "

But she is adamant that governments and organizations still have a

role to play, especially in the initial phase.

Institutions can only get off the ground with equipment like

computers and office space, and trained employees, which all cost

money.

Microfinance proponents complain that wealthier countries, including

Canada, have slowed down their contributions after an enthusiastic

start in the 1990s.

Coyle says there will also always be a need for traditional foreign

aid.

Entrepreneurship alone won't build schools, hospitals, and public

infrastructure, which are all crucial to economic development.

But microfinance is not about handouts and never will be. It's about

providing market access to hundreds of millions of people who are

invisible to big banks.

" It's about making people masters of their own destiny. That's the

end game, " Coyle said. " We are starting to no longer see poor people

with pity, as people we should feel sorry for. "

Still, the litany of problems plaguing Africa, such as poverty, AIDS,

and violence, are as painfully obvious as the littered scraps by the

highway that crosses the Niger river.

But a nearby juice stand serves as a reminder of something less

obvious: the panoply of solutions that are as limitless as the human

imagination.

Some discover hope in pineapple and papaya. Some find it on a bus.

http://www.businessfightsaids.org/site/apps/nl/content2.asp?

c=gwKXJfNVJtF & b=1028663 & content_id={0FA96EAC-FEEA-45CC-A4A9-

4D2F0A7182D8} & notoc=1