The Poor Lack Access To Capital Forty eight percent of Samoan families live in a state of food deficiency according to a 1999 UNDP study. Most families are already engaged in a variety of micro enterprise activities, however, success is elusive without access to affordable capital. Traditional banks are of little help to the poor since they demand collateral or proof of a steady and sizable income in order to secure a loan. Unsecured lending is limited in availability and comes at an exorbitant cost through high interest rates and fees. As a result, most poor have no access to affordable credit and have little opportunity of reaching their potential.

Country Reports    Samoa South Pacific Business Development  Africa Microfinance and Deprived Rural Areas in Africa

SPBD Provides Capital To Those Who Need It Most
SPBD provides small, unsecured loans to groups of rural women. Women invest their loans into businesses which they already understand-businesses based on their existing livelihood skills. SPBD’s philosophy of lending is based on a respect for each individual’s innate human ingenuity, drive and self esteem. It is these qualities which make people credit worthy, not the collateral which traditional banks demand. By providing access to capital, SPBD allows women and their families to pursue their dreams and achieve their full potential.

Guaranteed by The Group
At the outset, a loan officer first visits a village and explains the loan process to the village leaders and to interested households. The families most in need of loans will be identified. Women members of households form groups of five. After such groups have been formed, the loan officer will provide training to the groups of women. After the successful training of two or more groups, a village based center is established. Weekly meetings are held at which all business is discussed openly. After four weeks of perfect attendance and savings, two of the five women become eligible to submit loan proposals to the group. If the loan proposals are approved by the group and the center, then the loan disbursement will take place the following week. The next two, of the remaining three members, are eligible to submit loan proposals after six weeks of perfect attendance and weekly savings on the part of all center members and perfect repayment by the first two loanees in each group. The last member of each group, the group leader, is eligible to submit her loan proposal after another six weeks of regular attendance and savings by all center members and full repayment by all loanees. Second loans for larger amounts, depending on the fund requirements of the proposal, will be available to those who have perfect record of attendance, savings and loan repayments. Some of the examples of microbusiness started with finance from SPBD are: vegetable gardens, poultry firms, piggey, fish vending, food stall, -- handy craft, weaving, manufacturing, roadside trading, tricycle operator etc.