Microfinance for African Women Food Farmers

Overview

The African Woman Food Farmer Initiative (AWFFI) microfinance program is designed to address the critical missing link for the end of hunger in Africa: the economic empowerment of the most important and least supported producers on the continent, the women who grow Africa's food.

The program is part of a proven, large-scale, low-cost methodology for economically empowering the women and men of rural communities in Africa. Since its inception, the AWFFI microfinance program has disbursed over US$5.7 million to 95,326 women in Benin, Burkina Faso, Ethiopia, Ghana, Malawi, Mozambique, Senegal and Uganda.

Methodology

Prior to the creation of a women-led bank, the microfinance program operates as a direct credit program based on the following strategies:

• Solidarity groups: to receive loans, individual must form solidarity groups of 10-15.
• Required savings: prior to accessing credit, a minimum savings deposit of 10 percent of the applied loan principal is required as savings.
• The local Hunger Project team, in collaboration with community members, determines the country-specific annual rate of interest for the loans. The annual interest rate is always set well below commercial rates.
• All loans must be used for income-generating activities, such as farming, livestock and trade.
• All credit obligations elsewhere must be repaid before applying for a loan with The Hunger Project.
• Literacy classes: partners who apply for credit must attend literacy classes if they are not already literate.
• As part of a precondition for receiving a loan, the women must agree to keep their daughters in school.
• All credit borrowers must attend required trainings before accessing credit, including basic bookkeeping, business management skills, group dynamics and leadership.

Government-recognized Rural Bank

The goal of the microfinance program in each epicenter is to assist partners in forming an officially recognized, women-led rural bank. The recognition of the bank is a milestone event which signals the transition of the community into self-reliance. The bank does not belong to The Hunger Project; it is owned entirely by its members and managed by the members of the microfinance program. To date, 18 epicenters in 7 countries have gained government recognition and function as rural banks.