Everyone deserves a little credit
For people like Rokia, the standard products offered by traditional financial institutions do not apply because:
- She is not creditworthy, and cannot offer any guarantee.
- The basic costs of a small loan are proportionately very high and therefore not interesting for larger banks.
- The physical and mental distance from the banks is often too great.
- The threshold for women is even higher than for men.
- Many small entrepreneurs and farmers are illiterate and/or have no business plan to present to lenders.
The solution? Microfinancing. A human service, close to home. Small amounts. No more than they can repay. The credits are granted based on trust, but are subject to continuous supervision. It is not uncommon for an entire community to collectively guarantee the repayment of a microcredit.
The microfinancing institutions that BRS works with also invest in training and coaching local entrepreneurs. This can cover a wide range of subjects such as marketing, sales and accounting, as well as matters such as healthcare and literacy.
The ultimate goal of microfinance is to empower people, to give them the opportunity to improve their standard of living independently, with dignity and pride.
Microsaving: saving for a rainy day
When you think of microfinance, microcredits are probably the first thing that springs to mind. A small amount that allows enterprising farmers, craftsmen or traders in the South to start or expand their activities. That's just one element of microfinance. Another is microsaving.
Saving is not easy if you have to struggle every day to make ends meet. Yet the poorest are those with a great need for savings. In the event the harvest is disappointing, the breadwinner becomes ill or to pay for a wedding or funeral.
There are a number of ways people in the South save:
- Gradually acquiring some cattle, jewellery or construction materials.
- Depositing some money every day with a money custodian.
- Putting together a small sum of money every week as a group.
A different person gets to take the money home (tontines or roscas) every week.
Microfinancing institutions add an alternative: microsaving. Secure, flexible savings systems provide extra protection for customers and allow them to build up reserves at their own pace.