Ghana moves slowly. Meals at restaurants can take an hour to arrive and the mud sidewalks are crowded with ambling pedestrians who stop to chat frequently. Last night a friend told me about checking in on an item he had ordered from a vendor; when he asked when it would be ready, the response was, "for sure maybe tomorrow." This is at once the most wonderful and most frustrating characteristic of Ghanaian life. Something I really wanted to do on this trip was meet at least one microfinance client to see for myself if a small loan really made a tangible difference. Recognizing the sluggish speed of life and acknowledging my short time here, I wasn't too optimistic that I'd get the opportunity. But as those who have come to know Ghana understand, things have a way of working out in ways you can't anticipate.
The first MFI I met with last week was impressive from the moment I entered the office. I did not expect them to be in a five-story office building with glass walls and cubicles, nor did I think that my flip flops and sundress would render me embarrassingly underdressed. A team of three men in sharp suits, including the CEO, ran me through a well-prepared Powerpoint on their background and operations. They base their banking on mobility; that is, their loan officers each have a mobile phone and a mobile printer through which they can serve hundreds of customers in remote villages throughout their target regions. Customers receive a printed receipt while their information is sent from the phone back to an impressive information management system (that the company developed internally) so that the head offices can keep track of individual balances, outstanding loans, and agent collections. This model is limitless, especially in terms of reaching customers in remote areas who lack access to financial services the most. After an hour or so I thanked them for their time, and left the meeting more than satisfied.
The next day I received an e-mail from the CEO who asked if I would accompany him on a day trip outside of Accra to visit the branch there and observe their interaction with customers. This, as it turns out, barely begins to cover what we did on that day trip. The two hour drive began with traffic and dust and potholes but ended in the beautiful mountains of the Eastern Region. Our first stop was to meet the branch manager in Nkurakan, a smart young woman who oversees a number of villages in the area. The three of us then moved on to the next village, where I was introduced to Emmanuel. Emmanuel owns a business called Greenfield Spare Parts ("why greenfield?" I asked. "green means growth.") and has taken a total of approximately $1,500 in loans. When the warehouse he buys his parts from increased their prices, he was worried he wouldn't be able to complete his stock and business would plummet, but this loan ensures that he is able to continue serving his customers the way he needs to to stay afloat. When I asked if he would continue to take out loans, he grinned and said "of course, of course. I am so grateful."
From there we moved from village to village to meet with people, finally ending at a huge trader market. Huge. Everything you could imagine was sold here, from dried Tilapia to toenail scissors to second hand trousers. The MFI hosts a stall with a DJ and computers, and volunteer agents walk throughout the market to visit with existing customers and invite new ones to register at the stall. One staff agent grabbed my hand and led me through the market, introduced me to clients (all women), invited me to try fruits I'd never seen before, and told me how much he loves his job. I could go on and on about this trip - about how one customer whose business in a wood shack had been robbed and a loan allowed him to buy a more secure tin shack, about how the CEO is incredibly smart and sees only growth for their company, or about an amazing lunch in the mountains at this place, but there are other stories to tell.
The next day, a different MFI invited me to attend a group lender meeting and a group leader training. This MFI aims to serve the urban poor, referring to their clients as partners, and while they lend to individuals, these partners must be part of a community-formed group. These groups hold weekly meetings to discuss any issues and ensure everyone is paying back their loans. The group I visited with was named "God is Good" - which also served as a chant the leader shouted out multiple times to the group's collective response "all the time!" As the leader went through the agenda, the treasurer of the group collected everyone's payments in a lady's purse hung around his neck. On a personal note, I love watching group interactions like this. They teased each other (a conversation I thought was a serious discussion on the tardy policy was actually one guy asking the group if the ring on my finger meant I was married or available), and laughed and clapped when I said thank you in Twi (Medase!), and prayed in earnest to start and close the meeting. This MFI's customers are 98% women who typically borrow about $80, and each client must undertake mandatory training before leveraging the MFI's loans or savings products.
These stories have been encouraging. Microfinance certainly has a place here and seems to be in a state of development. But a hard fact remains: the number one challenge facing all of these institutions is the lack of funding and financing. Some are donor dependent, some rely on investments from personal contacts, some seem to have no long-term sustainability plan. I have also noted a lack of collaboration among these organizations, which ultimately means that the sector suffers from a lack of best practices and self-regulation. Looking forward, many of these MFIs hope to tap into new sources of income and explore how technology can expand their operations. Previously ignored by the Bank of Ghana, MFIs will be boosted by the launch of a new Central Bank microfinance division by the end of the year. Will this be a catalyst for MFI sustainability and growth? For customers like Emmanuel and the members of "God is Good", I certainly hope so.
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| The view from Hillburi, Aburi |
The first MFI I met with last week was impressive from the moment I entered the office. I did not expect them to be in a five-story office building with glass walls and cubicles, nor did I think that my flip flops and sundress would render me embarrassingly underdressed. A team of three men in sharp suits, including the CEO, ran me through a well-prepared Powerpoint on their background and operations. They base their banking on mobility; that is, their loan officers each have a mobile phone and a mobile printer through which they can serve hundreds of customers in remote villages throughout their target regions. Customers receive a printed receipt while their information is sent from the phone back to an impressive information management system (that the company developed internally) so that the head offices can keep track of individual balances, outstanding loans, and agent collections. This model is limitless, especially in terms of reaching customers in remote areas who lack access to financial services the most. After an hour or so I thanked them for their time, and left the meeting more than satisfied.
The next day I received an e-mail from the CEO who asked if I would accompany him on a day trip outside of Accra to visit the branch there and observe their interaction with customers. This, as it turns out, barely begins to cover what we did on that day trip. The two hour drive began with traffic and dust and potholes but ended in the beautiful mountains of the Eastern Region. Our first stop was to meet the branch manager in Nkurakan, a smart young woman who oversees a number of villages in the area. The three of us then moved on to the next village, where I was introduced to Emmanuel. Emmanuel owns a business called Greenfield Spare Parts ("why greenfield?" I asked. "green means growth.") and has taken a total of approximately $1,500 in loans. When the warehouse he buys his parts from increased their prices, he was worried he wouldn't be able to complete his stock and business would plummet, but this loan ensures that he is able to continue serving his customers the way he needs to to stay afloat. When I asked if he would continue to take out loans, he grinned and said "of course, of course. I am so grateful."
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| Wish this picture had captured how incredibly hot it was. |
From there we moved from village to village to meet with people, finally ending at a huge trader market. Huge. Everything you could imagine was sold here, from dried Tilapia to toenail scissors to second hand trousers. The MFI hosts a stall with a DJ and computers, and volunteer agents walk throughout the market to visit with existing customers and invite new ones to register at the stall. One staff agent grabbed my hand and led me through the market, introduced me to clients (all women), invited me to try fruits I'd never seen before, and told me how much he loves his job. I could go on and on about this trip - about how one customer whose business in a wood shack had been robbed and a loan allowed him to buy a more secure tin shack, about how the CEO is incredibly smart and sees only growth for their company, or about an amazing lunch in the mountains at this place, but there are other stories to tell.
The next day, a different MFI invited me to attend a group lender meeting and a group leader training. This MFI aims to serve the urban poor, referring to their clients as partners, and while they lend to individuals, these partners must be part of a community-formed group. These groups hold weekly meetings to discuss any issues and ensure everyone is paying back their loans. The group I visited with was named "God is Good" - which also served as a chant the leader shouted out multiple times to the group's collective response "all the time!" As the leader went through the agenda, the treasurer of the group collected everyone's payments in a lady's purse hung around his neck. On a personal note, I love watching group interactions like this. They teased each other (a conversation I thought was a serious discussion on the tardy policy was actually one guy asking the group if the ring on my finger meant I was married or available), and laughed and clapped when I said thank you in Twi (Medase!), and prayed in earnest to start and close the meeting. This MFI's customers are 98% women who typically borrow about $80, and each client must undertake mandatory training before leveraging the MFI's loans or savings products.
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| Anthony, a customer, in front of his business. |
Mosquito bites: 22 (mostly on my feet)
Best "only in Ghana" sight/sound this week: Last Friday I had my first tennis lesson at the courts behind the National Stadium. Sule, my Nigerian instructor, is patient and calm and I love hearing him say things like "Keem, we will work on your foh-hond" or "Let me be moh cle-ah, you must bend yo kneees!" What was not as calm, however, was the swarm of little kids on the court who were desperate to be our ballboys (or friends?) Innocently obnoxious and desperate for some action, they were prancing around the entire perimeter of the court so loudly I could barely hear the balls hit my racket. After the lesson I made friends with an 8 year old boy wearing an Oakland t-shirt. I taught him a high five low five, and he taught me a fist bump. Fist bumps on the tennis court...Wimbledon, this is not.
Keeeeem :-) I love your blog!!! Very excited that you're doing this. So glad you were able to interact with microfinance borrowers. But do watch out from mosquitoes!!
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