Microfinance & Economic Activity in Benin
The Hunger Project’s Microfinance Program addresses a critical missing link for the end of hunger in Africa: the economic empowerment of the most important but least supported food producers on the continent – Africa’s women.
From the beginning, the innovation of microfinance has allowed poor people – usually excluded from the traditional banking system – to obtain credit to develop microenterprises and build savings. Microfinance has become a real means of reducing poverty by improving both people’s standard of living and economic self-sufficiency, as well as offering a pathway to education, health care and equity between men and women.
Across the areas where we work in Africa, well over two million individuals will take microloans from scores of microfinance institutions this year. They will use those loans to start small trade businesses and improve farming techniques for increased crops. The profits they make will in turn serve to feed and send the next generation to school and to receive health care.
Microfinance, it is clear, has done a world of good in Africa. However, if the full promise of microfinance is to be brought to bear on hunger and poverty in Africa, it must take into account a critical issue: the full inclusion of women farmers and entrepreneurs which is why The Hunger Project’s Microfinance Program is women-led, locally owned and fully integrated – it provides an empowering environment for women to participate.
In Benin, 10 epicenters have recognized Rural Banks, but over all there are 15 banks, five of which on their way to becoming recognized Rural Banks. Food processing is the most popular economic activity performed by partners at epicenters in Benin, followed by petty trade and agriculture, much of which is aided and made possible by the Microfinance Program (MFP). Some of the epicenters have also set up mutuals or insurance programs through the bank.