Home Tags Posts tagged with "Finance"

Finance

Story and pictures by Jennifer Hyman, Director of Communications
Land O’Lakes International Development

Working as a community health volunteer (CHV) in Madagascar since 1998, Jeannie Razafinadramanana never imagined that her passion and commitment to volunteerism would enable her to play an important role in transforming the dynamics within her hamlet of Tataho.

But after joining forces with the Strengthening and Accessing Livelihood Opportunities for Household Impact (SALOHI) program, she significantly bolstered her knowledge base beyond her traditional focus on maternal and child health. Not only did she learn how to provide more substantive health and nutritional support to a wider segment of the community, but she also became deeply engaged in the promotion of Village Savings and Loan (VSL) programs that sparked community cohesion and newfound trust.

Led by Catholic Relief Services (CRS) and implemented by a consortium of international partners including Land O’Lakes International Development, Adventist Development and Relief Agency (ADRA) and CARE, since 2009 the United States Agency for International Development (USAID) funded SALOHI program has been tackling food insecurity in 100,000 households — for nearly 650,000 people — across 110 rural communes in eastern and southern Madagascar.

In collaboration with Malagasy community leaders, the 5-year SALOHI program addresses a range of development issues, including health, nutrition, agriculture, emergency preparedness and resource management. Through this multi-faceted approach, SALOHI has helped communities become more resilient to disasters and economic shocks, while improving food security and decreasing dependency on external assistance.

“Before the training, I did things like distribute medicine to women, administer vaccines and hand out mosquito nets,” Jeannie explained. “But most mothers gave birth traditionally. They never saw a doctor for pre- or post-natal care. They didn’t weigh their children to find out whether or not they were malnourished, nor did they pay much attention to what constituted a healthy diet.” Those who were sick were typically only provided with traditional natural compounds, she said, rather than any type of western medicine, and children were rarely vaccinated. Now, she says, 100 percent of the children in her hamlet are vaccinated for a variety of potentially detrimental illnesses, including Hepatitis A, B and C, Rubella and Polio.

Through SALOHI and the Land O’Lakes team working in her community of Tataho, Jeannie learned how to sensitize pregnant mothers to prepare healthy, nourishing foods. “In general, the dietary training I’ve provided has focused more on how to improve existing staples to make them more nutritious, rather than trying to switch residents’ diets altogether. For example, I’ve shown my clients how they can add meat, small fish or oil to cassava dishes, to make them more nutritious.”  She has also shared with others her newfound knowledge on the seasonality of crops, so that villagers have a better understanding of when it’s an appropriate time to plant peanuts, cassava or rice.

Traditionally, the women in her community exclusively breastfed their children for only 2 months, and then they would be transitioned to solid food. She now counsels women on the importance of exclusively breastfeeding for the first 6 months, and about how prolonging breastfeeding for an extended duration can even be an effective means of family planning.

“At first, the community didn’t fully embrace the new ideas I was trying to spread. But, later on, mothers were able to see for themselves the difference in their children’s health and mortality when they sought medical care for their families. This helped convince them of its importance,” Jeannie explained.

Promoting Village Savings and Loans

Even though Jeannie’s a CHV focused on health and nutritional support, she promotes the group banking model known as a Village Savings and Loan (VSL) through her regular household visits. The VSL operates with clear regulations that stipulate that the money can only be used for critical needs such as medical expenses and medicine, emergencies, and even investing in a business, but not for luxury items like clothing or luxury goods. When members borrow, they must pay back the principal, plus a 10 percent interest rate that goes back into the fund; meanwhile, at the end of the year, savers benefit from earning 10 percent interest on what they save.

“The VSL helped give birth to love in our community. People really started to like each other more, to care about each other more,” she said of the VSL’s impact. “During hard times, people don’t have to go far for help anymore. It not only changed our access to finance, but it changed how we related to one another.”

The people in Tataho not only had no concept of VSLs before, but also they rarely engaged in any sort of banking or savings. Jeannie explained that when people urgently needed financial support in the past, they had very few options. Those who would lend resources often charged astronomical interest rates at 100-200 percent. “Now, when there are happy events or sad events in the community – from birth to death – there is now an outpouring of broad community support. In the past, select individuals would help out a struggling close family member, but now the entire community is really devoted to the health and wellbeing of the entire population.”

As one of the 36 CHVs providing support to her hamlet, which has 3,000 households, although she hasn’t received a penny in earnings since she began her service in 1998, she is motivated by the advantages volunteering provided her in taking better care of her family and community. “Health has been my vocation for a long time, even if it’s not paid work. But, now I’m devoting energy more broadly on the health of the entire community, while providing more meaningful support to the women and children who are the greatest focus of my work.”

Another new focus for Jeannie as a result of SALOHI has been sensitizing the community to the importance of hygiene and basic sanitation. “I’m teaching people that they should only drink potable water, that they should wash their hands after using the bathroom and to use latrines when they need to relieve themselves. Honestly, these are things our community never regularly did before, but we’re changing our practices collectively.”

Importantly, Jeannie says that working as a CHV has made her and others like her feel empowered and gain an elevated status in the community. As most of the CHVs are women, their position gives them more clout and negotiating power within the family structure.

Her husband agreed, saying, “I’m very proud of her and seeing her take this kind of initiative in the community. Much of her work can be done from home or nearby, and things are going well. In fact, our dialogue as a couple and the ways we problem-solve have become much more effective, and we can really work things out together. I used to feel like the burden of family care was all on me, but now we treat each other as equal partners.” In total, the family has 19 family members, including three sons, six daughters, and numerous grandchildren.

Even though the SALOHI program is drawing to a close, Jeannie is emphatic that her CHV and VSL work will continue on. In fact, she and several other CHVs in her community are already planning for their next collective effort: literacy training for women. She says that 75 percent of the women in Tataho are illiterate, as they tend to start school as late as 10 or 15-years-old, and are often encouraged by parents who see them as a financial burden to drop out of school early and marry.

“I want to ensure that more women can read and have greater agency on their own futures, and also invest positively in the VSL. It would help empower them to get out of poverty.”

Story and pictures by Peter Saling, Director of Programs
Volunteers for Economic Growth Alliance (VEGA)

In 2008, Jacqueline Dekoe started her business, Jacqueline’s Production, in Monrovia with five coconuts, a cup of sugar and the equivalent of US $1. Before going into business, Jacqueline had fled to Togo during the Liberian civil war.  There, while a refugee student, she noticed food sellers adding value to produce such as cassava, plantains and breadfruit, and selling their products at local markets. This sparked Jacqueline’s interest in food processing and inspired her to start her own business selling snack foods after returning to her homeland.

IMG_1785Jacqueline singlehandedly managed the production, marketing and delivery of her snacks. The members of her community quickly became hooked.  She could not meet the growing demand.  Jacqueline tried to get a bank loan to fund her expansion, but without a business plan for her company, the banks were unwilling to lend.

In stepped the Investing for Business Expansion (IBEX) Program.  IBEX is funded by USAID and assists business owners in accessing funds made available through banks that are supported by USAID’s Development Credit Authority (DCA).  The DCA frees local credit mechanisms by providing a partial guarantee to loans.  Since its founding in 1999 through 2013, the DCA has facilitated USD 3.1 billion of credit in 71 countries.  It has experienced a default rate of only 1.85%, thus costing relatively little to US taxpayers.

In Liberia, the four-year IBEX program is implemented by the non-profit International Executive Service Corps (IESC), through the Volunteers for Economic Growth Alliance (VEGA).  The program has three components. First, it provides technical support and capacity building for small and medium (SME) sized businesses, such as Jacqueline’s, in the agriculture, renewable energy, infrastructure, construction, general merchandise, transportation and hospitality chain sectors.

Secondly, it provides technical support and capacity building for its partner banks, IB Bank and EcoBank-Liberia, to facilitate lending to SMEs and encourage lending to qualified small business using the DCA guarantee.  IBEX allows partner banks to become more comfortable lending to the SME sectors through training bank staff and through borrower preparedness exercises, e.g business plans, and screening.  Meanwhile the DCA guaranty helps lower their risk for lending to borrowers in relevant sectors through a 50% risk-share of any net loss on their loans.

Finally, IBEX works with the Government of Liberia and private business development services (BDS) providers, such as accountants, to develop public and private resources to provide these same services, linking businesses to banks, in order to ensure sustainability once IBEX ends.

In Jacqueline’s case, IBEX’s Enterprise Development Specialists helped her to prepare a business plan.  This led to her business receiving a USD 35,000 loan. She used the money to purchase a truck and several processing machines that helped her increase her output and lower her production costs.  Today, Jacqueline’s Production employs nine workers and is worth US $80,000. Jacqueline’s coconut and plantain chips are now found in local shops and supermarkets throughout the country. The business serves as an example for other Liberians interested in becoming entrepreneurs.