AWFFI Partners Increase Loan Repayment Rates

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Update to the Global Board
(October 2008)

Executive Summary

Due to continued unfavorable farming conditions, microfinance partners of both African Woman Food Farmer Initiative (AWFFI) and Strategic Planning in Action (SPIA) programs have continued to face challenges repaying their loans on time. As a result, the priority for the first six months of 2008 was to reinforce repayment in all epicenters. With the collaboration of the epicenter and village loan committees, we were able to successfully increase repayment rates from 76 percent in June 2007 to 89.50 percent by June 2008.

Moreover, in all eight program countries, the AWFFI microfinance program has started the registration process to become a member of the national microfinance association. Because of the long registration process, we hope to finalize the membership in all eight countries by the beginning of 2009.

Benin

Details on Progress

By the end of the second quarter of 2007, the cumulative loan disbursement was US$713,558 to 13,720 women partners. By the closing of the second quarter of 2008, the cumulative loan disbursement increased to US$1,134,154 to a total of 16,917 women partners. Meanwhile, a cumulative total of 561 men have been able to access loans in the amount of US$48,461. The cumulative repayment rate for the AWFFI program in Benin stands at 92.10 percent, an increase of 2.58 percent from June 2007, when the repayment rate stood at 89.52 percent.

Based on its success thus far, the AWFFI program in Benin continues to face a challenge in meeting the growing demand for credit from both new and existing partners in epicenters. In particular, at Zakpota Epicenter where over 531 group loans have been disbursed to 9,397 women partners. Even though all the available funds have been disbursed, several partners have taken the initiative to form groups. They are currently waiting for their turn to receive credit.

During the second quarter of 2008, 73 SPIA partners received credit. To date, a total of 561 men have received loans in the amount of US$48,462. The current cumulative repayment rate is 82.68 percent and the average savings per person is around US$28.

Future Plans

In accordance with the new government regulation that requires all credit and savings institutions to register with the Ministry of Finance, the AWFFI program in Benin is currently in the process of finalizing the registration as a lending and deposit-taking institution.

Burkina Faso

Details on Progress

Between June 2007 and June 2008, the cumulative loans disbursed increased from US$440,840 to $637,827. During this time, the cumulative number of women who accessed loans increased from 7,693 to 10,293 partners. By the end of 2008, the cumulative repayment rate was 88.48 percent. The repayment rate in Burkina Faso saw a slight decline of 4.28 percent from the previous year when the repayment rate stood at 92.76 percent.

Meanwhile, by the end of the second quarter under the SPIA program, 376 men partners accessed loans compared to 231 partners from the previous year. The repayment rate for the SPIA program remains strong at 96.08 percent.

Future Plans

Currently, there are five government-recognized banks in Burkina Faso. The objective for the near future is to set-up a learning workshop for board members of all five epicenters. Given their extensive experiences in the administration and management of their rural banks, a workshop that would include all board members will allow them to learn from each others experiences and create a support network for one another to protect them from shortages of revolving capital and help them avoid any possible bankruptcy.

Ethiopia

Details on Progress

By the end of the second quarter in 2007, a total of US$49,340 was disbursed to 908 women. By closing of the second quarter in 2008, the cumulative loans disbursed increased to US$109,114 to 2,075 women partners in four epicenters.

Meanwhile, the cumulative number of men accessing credit under the SPIA program increased from 423 in 2007 to 924 partners in 2008. Currently, the repayment rate in Ethiopia stands at 100 percent for AWFFI and 95.18 percent for SPIA respectively.

Future Plans

In order to access credit, as is the case with all our loan requirements, AWFFI partners are required to dig pit latrines and attend literacy classes. Although there has been strong reinforcement on the supervision of pit latrines, partners' literacy class attendance has not been very strong. As a result, in accordance with the global office, The Hunger Project-Ethiopia will be re-engaging with the communities to put in place adult literacy classes for partners.

Ghana

Details on Progress

By June 2007, the cumulative amount of loans disbursed was US$169,354. By June 2008, this figure increased to $220,368. During this time, the total number of women accessing loans increased from 2,270 to 2,891.

Meanwhile, under the SPIA program, the cumulative number of men accessing credit also increased from 688 to 1,030. At the end of June 2008, the cumulative repayment rate had increased from 83.95 percent to 84.76 percent.

Future Plans

With the scale-up taking place in the Eastern Region of Ghana, the AWFFI team in Ghana has worked very hard to train new partners in new epicenters while continuing to meet growing demand by existing partners. To ensure strong loan performance, loan committees' members as well as partners will be undergoing continuous VCAWs to build their capacities. Also, a network of recognized rural banks will be established in order to protect these banks from fund shortages and enhance cross-learning experiences in order to avoid any possible bankruptcies once the epicenters become self-reliant.

Malawi

Details on Progress

Between June 2007 and 2008, the cumulative loans disbursed to women increased from US$208,107 to $208,437. While meeting the growing needs of the existing borrowing women partners, 92 additional women were able to access new credit during the year.

On the other hand, the cumulative number of men partners accessing loans increased from 949 to 1,037. Between the period of June 2007 and 2008, the cumulative repayment rate in Malawi improved significantly, increasing from 77.71 percent to 84.38 percent for AWFFI and from 86.18 percent to 100 percent for SPIA.

Future Plans

With the continued effort to improve the repayment rate, The Hunger Project-Malawi AWFFI team will continue to do more field follow-ups in the coming months. In addition, trainings for the epicenter loan committees and board members of Nsondole government recognized rural bank will also take place in the next quarter.

Mozambique

Details on Progress

From the second quarter of 2007 to the second quarter of 2008, the cumulative amount disbursed to women increased from US$291,641 to $354,954. During this period, the number of women accessing credit increased from 1,085 to 1,177 partners.

While continuing to meet the growing demand of existing men partners in the SPIA program, the cumulative number of partners accessing credit increased from 99 in June 2007 to 106 in this period in Manhica and Chokwe Epicenters.

Future Plans

In the coming months, there will be continuous effort to recover loans in both Manhica and Chokwe Epicenters. In addition, to revitalize the AWFFI credit program, VCAWs will be held for partners both at the epicenters and village levels.

Senegal

Details on Progress

From June 2007 to June 2008, the cumulative amount of loans disbursed increased from US$217,900 to $313,619. During this period, the cumulative number of women partners also increased from 12,828 to 14,245 partners. Meanwhile, the cumulative repayment rate has also increased from 82.01 percent to 97.01 percent. Through diligent follow-ups and meetings, partners were able to repay their outstanding loans.

Future Plans

Currently, The Hunger Project-Senegal is awaiting information from the Ministry of Finance regarding its application for the recognition of the AWFFI program in the microfinance industry in the country. Meanwhile, workshops will be held for Board members of the three government-recognized rural banks. The objective of the workshop is to allow board members to share their experiences and lessons learned so that they are better equipped to manage their rural banks.

Uganda

Details on Progress

Between the period of June 2007 to June 2008, the cumulative loans disbursement increased from US$158,897 to $166,786. During this period, the cumulative number of women partners accessing loans also increased from 1,082 to 1,688.

In regards to the SPIA program, during the period of June 2007 - June 2008, the cumulative number of men partners also increased from 205 to 378. Also, the cumulative repayment rate increased from 90.84 percent to 93.90 percent.

Future Plans

The microfinance industry in Uganda continues to grow. As a result, more and more funding opportunities are starting to arise for microfinance service providers in the country. One such example is the "Prosperity for All" government program that could provide funding for microfinance institutions, such as The Hunger Project-Uganda. The Hunger Project-Uganda AWFFI staff, in coordination with The Hunger Project government recognized rural bank board members will be doing further research on this possible opportunity. Based on the findings of the cost and opportunities of the program and in accordance with the Global office, The Hunger Project-Uganda will continue to research further partnership possibilities.

Furthermore, during 2009, The Hunger Project-Uganda will put in place a network of recognized rural banks in order to provide both technical and financial support to each other in case of funding shortages during the self-reliance period.