Microfinance in Ghana

If you had asked me three years ago, when I first learnt about microfinance, whether it was something for me, I would have given you an absolute no. I thought microfinance was impractical and didn't have much potential in eradicating poverty.

How wrong I was.

 In this last year,  I joined Microfinance Club UK all by chance and I had really started to question my opinions and understandings. So I thought what better way to  find out if it does work then to go and do some ground work. Really by just sitting in some fancy lectures in Canary Wharf, my opinion on this was never going to be justified.

That was my rationale behind going to Ghana and doing microfinance work. What did I actually do then? My responsibilities included taking in repayments, and recording the transactions. This would include providing a receipt, logging it in the personal spreadsheet of the beneficiary and the organisations account book. Every week, I would go visit the beneficiaries in a nearby town called Fise where I would collect money, ask them question and just generally check to see that they are not having any business issues. Also, as VPWA is planning to launch a micro-leasing scheme so I was involved in many discussions regarding micro leasing.

The Ghanian way of working is different and I was actually surprised by this because I thought when comes down to work they would be very Western in their manner. 

The first different was as a mentioned in the other post, timings. The office hours say 8.30-3.30, my real timings were 9.15-3pm simply because at 3 you start shutting down! 

Secondly, in Ghana life is public, privacy doesn't exist and why should it because you live in a community and everybody is out to help and support everybody. So when a beneficiary came in she didn't just hand the payment, she might stay there for 40mins just chatting about her personal life and things happening in the community to the lady I work with. I remember these occasions vividly because when they came in they would usually bring their baby and I would just play with the baby for ages while she discussed in Twi things to other lady I worked with. I was fortunate enough to work with a truly lovely girl she would translate and explain me everything being said.

No loans were given out while I was there as VPWA wants to launch the micro-leasing scheme with those funds as soon as all the repayments were finished. This meant I met a lot of ladies who had nearly, if not completely, finished the repayment were happy to reflect on how the loans approx £80 impacted their lives. One story which particularly touched me was  a lady who bought a sewing machine with the loan and runs her living on being a seamstress. This has allowed not only to bring three school-going kids but including the fact that one had Down's syndrome. It is interesting because you actually don't see disability in Africa because it is often misunderstood so to see a woman like that it is really inspiring.

I was also able to interview a lady on my last day who wants a loan to start a business which will allow houses in Fise to have water in their house. Currently, families in this area travel to a nearby well every time they have to go toilet, have a bath or wash pots/pans. So I was ale to be involved in that. She wants a large loan about £300 and is an ex-beneficiary it will be interesting to see what happens. As when discussing with the owner a business like that has a social justification. It is bring development and water to houses, maybe it is better to fund this through private funding than a loan?

All this is not to say that this experience did not show me the cons related to microfinance, I saw that a lot of the time the loans is simply too small for women to kick start from scratch say catering/ food businesses. This is actually the reason why VPWA wants to do a trial run of microleasing as we postulate that this will have more impact as it encourage people to have their own business not just offering support for those who already want to. Another issue is given that on Fridays we go to see the women, a lot of the women just wait till Friday to make their repayment so that they can work Mon-Thurs. Thus leaves the microfinance office bare of work.

Overall, I can put faces and cases to microfinance and believe it is a great aid to development and such an experience has given me the authority to make an opinion like that so I am grateful to VPWA. However, I have to endorse the VPWA philosophy is using multiple methods not just one is going to eradicate poverty and boost development.