Micro Credit

I've been working for the last few weeks, and will be for the coming months, for a little organisation called 'Anti Poverty Initiative' (API) which provides micro credit for woman in Dakar. It was started by an American ex Methodist missionary who has been living in Dakar for many years. They needed help with setting up a new computer accounting system and various other tasks and so I am getting some good experience in the field of micro credit.

Micro credit is simply loaning small amounts of money to people with no security, effectively filling the gap below which normal banks and financial institutions operate. It came to major prominence recently when Muhammad Yunus, who funded the Grameen Bank in Bangadish, was awarded the 2006 Nobel Peace Prize. The loan money enables women, who are more trustworthy with repayment and usually provide benefits for the whole family, to start and run small businesses.

API has a model which sets up groups of 25 women together and gives them the responsibility of loan repayment as a group. This helps reduce the workload of the office and further spread the risk of non repayment. Some training and instruction is given when women first start with API and a first small starter loan is used to try and ensure small steps in the learning curve.

I'll certainly be interested to learn more of the real life application of this now trendy economic theory.

In other Senegal industry news we visited at the weekend a salt mining region 50km west of Dakar. It was great to see first hand the ladling of the salt directly from the bottom of the small lake, then the transport to shore, bagging and loading onto trucks for transport. I still can't quite figure out why the operation has not been mechanised, but at least the manual labour provides some locals with work and seems to minimise the environmental impact.


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