Microcredit unions have become part of the landscape of development projects since the Grameen Bank pioneered the use of micro-loans to provide credit to poor individuals without collateral in Bangladesh.
In Mozambique, ACT member the Primate’s World Relief and Development Fund microfinance project has gone one step further. The organisation has set up financial institutions owned and operated by the very poor it wishes to support.
These institutions, called caixas, are providing women the opportunity to access capital for small business ventures as well as a safe place to keep their savings. Caixas have also become catalysts for the further education of board members and tools for empowerment as women, many for the first time, are able to access capital without the need for a male guarantor.
Number of union members balloons
In 1996, a group of women who were making and selling cassava cakes came together to look for increased economic security. They approached PWRDF for support and training to set up a formal savings and credit system.
With the small amount of money they had saved, they started a credit union, with each person buying a US$0.05 share to become members. These women were the first 47 members of Caixa das Mulheres de Nampula (Nampula Women’s Credit Union) which, 15 years later, has ballooned to 4500 members.
Today, 90 per cent of Caixa loans are used to set up new businesses or expand existing ones. In many cases, women have become investors in their husbands’ businesses because they are the ones who can access credit. This has earned them the respect of their partners and families and strengthened their capacity to participate in household decisions.
In a region where unemployment is high, many women have become job-creators. Women have created competitive enterprises in the food, mining and furniture-building industries: Teresa Albino runs a restaurant, Carina Abias Zacarias has two hairdressing salons and employs four people, Fatima Mutela is a bamboo trader, and Zena Adelino Assane is a furniture maker who employs six women.
Women rising through the ranks
Many union members are now recognised as reliable entrepreneurs and courted by local politicians and banks. Women also report they have been able to educate their children to university level through their savings accounts and business endeavours, a first in many families.
The testimonies provided by Caixa members, their spouses, employees and community members are the best indicators of results. One of the members of Caixa Nampula ran for municipal elections, explaining that her years of democratic participation at Caixa events had given her the knowledge, assertiveness and confidence to run for office.
Microfinance is not a silver bullet for eradicating poverty but it helps. It puts resources into the hands of women and allows them to make choices that have an immediate impact on the lives of their families, such as better health and education for their children.