RURAL women in some parts of the Upper East region are quickly embracing, with both hands, a new savings and lending initiative that is fast proving a source of funding to their long-held business ideas.
With a motivation to save in groups and an opportunity to borrow at low rates from their saved monies, women in the area are now beginning to realise their dreams and create business ventures, proceeds of which are used to support their respective families.
Modest as it may be, the Savings and Internal Lending Community (SILC), an initiative of the Catholic Relief Services (CRS), is able to mob up funds in areas where commercial banks and their trained bankers would have failed to mobilise savings.
The community-based and savings-centered initiative was started in May 2011 by the CRS with one goal in mind; to encourage savings among rural folks as a way of empowering them to start up their own businesses.
But even before the programme takes shape, beneficiaries and facilitators of SILC have already started using their borrowed monies to start businesses and undertake petty tradings from which they generate incomes to cater for their individual needs.
HOW SILC WORKS
Madam Celestina Aduko, a facilitator within the Talensi-Nabdam District, who took the GRAPHIC BUSINESS through the various operations of SILC explained that persons wishing to join the SILC initiative are first put in groups with membership ranging from 15 to 30 persons per group.
Individual members, she said, are then encouraged to save (contributing any amount that the individual can afford) in a group’s money box which is kept by the group leader. Contributions are taken on weekly basis, a third of which is then loaned to an interested party after every other four weeks.
Madam Aduko explained that although the initial plan was to loan a third of an individual’s savings back to him or her after four week’s of savings, the groups had realised that “the individual’s savings alone will not be enough for him to use in starting something meaningful.”
Repayment of loaned funds, according to Madam Aduko is done base on the amount taken with a flat interest rate of a tenth of the loaned amount.
She mentioned that the programme which started with 19 groups in few communities has now flourished into the entire region as a result of its promising benefits to the people and the economy as a whole.
“The CRS realised that the poverty in our part of the country makes it difficult for the people to find a proper source of living for themselves and their families. And so they brought this initiative to encourage group savings and lending, from which comes businesses,” the SILC facilitator noted.
Madam Aduko added that the SILC initiative has currently brought about various forms of improvements in the lives of the populace with most of the beneficiaries using the proceeds to set up smaller businesses, engage in petty trading and also finance their individual family needs.
The SILC, she said envisions that “non of its members will have any money related problem because we don’t want a situation where members will still be poor, have no source of living and do not create income for members of their families come five years.”
WHY ENCOURAGE SILC
Although the revolution in the country’s banking and non-banking sector has agreeably pushed more people into patronising the services of financial institutions nation-wide, most people off the streets of city are yet to see any reason to do same. And That may not be a big surprise. After all, how many financial institutions have the nerve to set up their operations in these rural areas where money is best known to be saved in bedrooms and pillows.
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| Naba Moses Agangzuah Koomkiisibugu hands over a SILC savings box to Madm Abampoka Azidizian |
But even where financial institutions, especially the banks, have registered their presence for the sake of deposit mobilisations, not many had patronised their services.
With Ghana’s low domestic savings rate of nine per cent, all efforts aimed at encouraging savings must, therefore, be pushed as a savings habit engineers an investment culture.
But in the face of that comes many challenges, some of which are currently facing SILC and its members.
In enumerating the various challenges facing the implementation of the SILC initiative, Madam Aduko said the successful operations of the SILC will be based on the market that will be created for the businesses it generates.
“The people are more than eager to use their savings to start businesses; to weave baskets, produce sheabutter and engage in petty trading. The headache, however is how fast can these produce move to enable them manufacture more.”
Madam Aduko thus called on the CRS and other benevolent institutions to help market the business proceeds of SILC so as to help encourage more savings and investments among Ghana’s rural folks.
“They should try and link our products to buyers outside the region so that the produce can move quickly for them to produce more,” she said.
And once that is done, Madam Aduko said the success of the SILC can then be replicated in other areas and regions to the benefit of the populace and the economy at large.
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