The Women’s Microfinance Initiative is a structured, village-based microfinance initiative that uses a number of best practices to ensure clients a smooth transition to institutional banking and the formal economy within 24 months. Based in East Africa, the village-based model addresses the significant barriers women in rural villages face when trying to obtain capital for business ventures.
Transportation, identity, mobility and illiteracy continue to limit women’s participation in income-generating activities in East Africa. The Women’s Microfinance Initiative has addressed these limitations by acting as a bridge between community loan programs, in which members of a ‘solidarity group’ encourage, support, and guarantee each other’s micro-loans, and banking institutions who want to move into the rural markets. The program provides support, training, and record keeping, in addition to the capital for the microloans. Microloans are for income-generating business, and community groups work together to ensure success. The structured program provides four loans at six month intervals, with a required 100% repayment, after which members have the history, identity, and skills to enter the formal economy.
The issue of a financial history and identity is critically important for women in rural East Africa to succeed in income-generating activities. With illiteracy and a lack of identifying documents, such as birth certificates and national identity cards, many women are still expected or required to have a male family member act as guarantor for any financial transactions. With HIV still decimating the populations of these countries, many women find themselves with families to support and no male relative to give them the proper identity. A two year history of successful capital loans, repayment, participation in training, and income-generating business gives many banks the confidence to step over the social traditions and offer women access to formal financial systems. The Women’s Microfinance Initiative acts as a bridge between the two groups.
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