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Microfinance for African Women Food Farmers

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02_03_03-Microfinance

Overview

The African Woman Food Farmer Initiative (AWFFI) microfinance program is designed to address the critical missing link for the end of hunger in Africa: the economic empowerment of the most important and least supported producers on the continent, the women who grow Africa's food.

The program is part of a proven, large-scale, low-cost methodology for economically empowering the women and men of rural communities in Africa. Since its inception, the AWFFI microfinance program has disbursed over US$6.7 million to 69,694 women in Benin, Burkina Faso, Ethiopia, Ghana, Malawi, Mozambique, Senegal and Uganda.

Methodology

Prior to the creation of a women-led bank, the microfinance program operates as a direct credit program based on the following strategies:

  • Solidarity groups: to receive loans, individual must form solidarity groups of 10-15.
  • Required savings: prior to accessing credit, a minimum savings deposit of 10 percent of the applied loan principal is required as savings.
  • The local Hunger Project team, in collaboration with community members, determines the country-specific annual rate of interest for the loans. The annual interest rate is always set well below commercial rates.
  • All loans must be used for income-generating activities, such as farming, livestock and trade.
  • All credit obligations elsewhere must be repaid before applying for a loan with The Hunger Project.
  • Literacy classes: partners who apply for credit must attend literacy classes if they are not already literate.
  • As part of a precondition for receiving a loan, the women must agree to keep their daughters in school.
  • All credit borrowers must attend required trainings before accessing credit, including basic bookkeeping, business management skills, group dynamics and leadership.

Government-recognized Rural Bank

The goal of the microfinance program in each epicenter is to assist partners in forming an officially recognized, women-led rural bank. The recognition of the bank is a milestone event which signals the transition of the community into self-reliance. The bank does not belong to The Hunger Project; it is owned entirely by its members and managed by the members of the microfinance program. To date, 18 epicenters in 7 countries have gained government recognition and function as rural banks.