FORTUNE Small Business
What is microfinance? At the core of WomensTrust is microfinance, which has been called “the most effective tool to fight poverty ever invented .” Put on the map by Muhammad Yunus, founder of the Grameen Bank and winner of the 2006 Nobel Peace Prize, microfinance is now widely embraced as a powerful method for helping people climb out of poverty.
WomensTrust has over 2,500 loan clients – all women who own local businesses, with many struggling to make $2 per day.
We ask them to form small groups in order to apply for individual loans. Each member of a group is responsible for repaying her own loan in addition to making sure the others do the same. Eligibility for the next, higher round of loans is based solely on timely and full repayment by the group.
Here is how the women use their loans — Most of our clients make their living in the informal economy as hairdressers, bakers, seamstresses, and “petty” traders, selling goods from tables and tiny kiosks or carrying them from place to place. With WomensTrust capital, they are able to increase or diversify their inventories. They can buy in bulk, decreasing their time away from work traveling to buy supplies. Profits accrued are immediately invested in better nutrition, healthcare, and education for themselves and their children.
Business Training — At the request of our loan clients (66 percent of whom have had very limited access to school and sign their names with a thumbprint) WomensTrust offers classes that teach how to improve their bottom line. We help them build on their basic business instinct, and move forward toward new opportunities as well as the employment of others. By creating a continuum of next steps and the training to be successful, we see the women of Pokuase driving forward the economic health of the community.
Why go beyond microfinance? — WomensTrust believes that the climb out of poverty cannot be sustained by access to credit alone. In our model, the key to long-term economic growth is to integrate supplementary programs of education and healthcare. We focus on one geographic setting – Pokuase – and deepen our relationships so that we can bring additional support and resources in line with true interest and demand.
Educating Girls — Research clearly shows that when girls are educated, all quality-of-life indicators improve. They have smaller families, longer and healthier lives, and more stable economic paths. In Pokuase fewer than 50 percent of girls finish junior high. They are routinely taken out of school to do chores and support their families. WomensTrust has instituted a scholarship program in local public schools for Pokuase’s brightest girl students. We also have an enrichment component that allows the most gifted to visualize a future beyond the limited traditional paths of their mothers. When our scholarship candidates learn that based on results they are guaranteed an education through senior secondary school, they begin to see options. They do indeed become the hope for long-term change.
Healthcare Partnering — Healthy mothers are essential to a healthy economy, and WomensTrust has focused on ways to improve the mortality rate from pregnancy-related causes each year. By partnering with Pokuase’s very able public nurse, committed volunteer healthcare professionals and medical students have conducted screenings for factors that negatively impact maternal health: hypertension, anemia, and diabetes. Also, for all microlending clients in good standing we have a donor-funded program that gets them into Ghana’s national health insurance plan.
Importance of Donors — All of our accomplishments are possible because of the steady vision and commitment of our donors. What we have designed and implemented through WomensTrust has produced tangible results in just eight short years. The people in Pokuase have watched us come back; do what we say we are going to do; ask questions; and then innovate. We have built relationships and credibility throughout the town. There is evidence of the economy getting stronger, the educational level rising higher, and health improving. All three are interrelated. Our donors have created an opportunity for the people of Pokuase to climb out of poverty — bottom up, no layers, very efficient. This is in stark contrast to top-down programs that rarely reach the ground. Our program yields results.
