Certainly, informal savings and lending
groups existed before the advent of globalization
and institutionalized development.
Yet, the fact that the UN has named 2005
as the International Year of Microcredit,
shows that the international community
acknowledges the potency of effective
lending, finance and entrepreneurial
skills programs in helping to improve the
quality of life for many of the world's
most vulnerable people.
Credit has an especially
important role to play in
regions that are recovering
from conflict. Providing credit
provision is also especially
challenging in these situations.
During the post-conflict
period of reconstruction,
obstacles include high unemployment,
institutions, lack of startup
capital, inadequate food
supply and an uncertain political
poverty is often exacerbated
by the devastation of social
support networks that existed
before the war.
These circumstances can be
especially hard on women.
War widows are frequently forced to
become primary household providers.
Many of the women who survive are victims
of violence that was either a tool or
collateral consequence of the conflict. In
addition to rebuilding their country, they
must also deal with the residual trauma of
rape and torture.
Members of WWI working hard at shoemaking using their loans
While microcredit is not a silver bullet, it can
jump-start economic activity. It can give conflict
survivors some tools to help re-build their economic
lives and household security, and play an
important role for refugees and internally displaced persons, women especially, who have little access to formal sector economic activities.
Women for Women International
(WWI) believes that establishing a
means to earn a sustainable living is an
important part of the process of becoming
a fully active citizen. The organization
was founded in 1993 to help women
overcome the horrors of war and civil
strife in ways that help them rebuild
their lives, families and communities. Through a tiered program that begins with
direct financial and emotional support,
WWI fosters awareness and understanding
of women's rights; offers vocational and
business skills training; and provides
access to income-generation support and affordable microcredit loans that together help women restart their lives in ways that are independent, productive and secure.
WWI works with women at the grassroots
to develop sustainable income-generating activities that will help them move from crisis to self-sufficiency.
WWI operates in Bosnia and Herzegovina,
Rwanda, Democratic Republic of the
Congo, Kosovo, Nigeria, Colombia,
Afghanistan, and Iraq, working with the
most socially excluded women whose needs
are not otherwise being met. It has assisted
more than 33,000 women, distributing
nearly US $18 million in direct aid and
In Bosnia and Herzegovina and Afghanistan,
Women for Women International operates
microcredit programs based on the Grameen
Bank model of lending. The microcredit program
provides women with small loans requiring
no collateral to start or expand an incomegenerating
opportunity. To date, the program has
maintained a 98% repayment rate.
WWI-Bosnia ad Herzegovina (BiH) disbursed
its first loans in April 1997. As of
March 2005, 7,223 women have received
15,307 loans for a value of approximately
US $22.5 million. Currently, there are 3,338
women active borrowers and the loan portfolio
is worth approximately US $2.2 million.
Many of WWI-BiH's clients are graduates
of WWI's multi-phase program of rights
awareness education, vocational skills training and income generation support.
WWI-BiH employs a peer
group lending methodology,
whereby borrowers form
groups of five and serve as
guarantors for each other's
loans. This is the only collateral
that is required. As
active loan clients, the
women receive peer group
and business management
training during regular
meetings with their loan
officers, to ensure that they
are able to effectively manage their businesses and repay the loans.
Initial loans sizes are between US $300-$750 per woman and are repaid monthly
over a period of 6-12 months. As the
women's businesses grow and their business
management skills improve, the
women qualify for still larger loans that
may be repaid over longer periods of time.
Most of the loans are for agri-business (65%) and trade (15%), as well as for services (11%) and production (9%).
Women for Women International-
Afghanistan (WWI-Afghanistan) began
serving Afghan women in October 2002. In
July 2004, the microcredit program distributed
its first 187 loans, totaling US $34,210.
WWI-Afghanistan is currently the only
microfinance organization in Afghanistan
working exclusively with women. As of
March 2005, approximately US $200,000 in loan funds had been disbursed to a total of 1,600 clients.
Similar to WWI-BiH, WWI-Afghanistan
uses a solidarity group lending methodology,
offering short term loans for start-up
and expansion, working capital and small
fixed assets to eligible clients in services,
retail/trade, agri-business, and production
sectors. This methodology has been adapted
to fit the needs of the local community.
Based on Islamic lending laws, WWIAfghanistan
has instituted a fee schedule to
pay for services performed by the organization
in servicing the loan, instead of charging
interest. Because of Afghan women's
limited mobility and property rights, a male
signatory is taken on loan contracts to facilitate
the process when necessary.
The average loan size in Afghanistan is
approximately US $170. The loan terms
are for ten months with bi-weekly payments.
To date, all of the clients reside in
the semi-rural areas around Kabul. Many
of the loans go to clients who are starting
or expanding agri-businesses or cultivating
and selling vegetables.
In countries where WWI does not provide
microcredit loans, income-generation support
is tailored to fit the local economy.
Participants can sell products they have
made at WWI's online Virtual Bazaar and
other international venues or at cooperative
stores managed by program graduates.
Women are also encouraged to form cooperatives
with other program participants
to start local businesses. WWI provides
participants with advanced business skills
training, as well as help with writing effective
Women for Women International believes
that economic stability is the foundation,
which can lead to broader political and
social participation for socially excluded
women survivors of war. Microcredit
loans and other income generation support
will continue to be important tools for
women in post-conflict situations, as they
recover from the horrors of war and
rebuild their lives, families, and communities.
Source : Women for Women International.
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