Microfinance in Africa

Microfinance in Africa 2017-01-08T14:08:20+00:00

Great change takes great courage.

Microfinance in Africa

Maweta from Lusaka, Zambia
Maweta Tembo sits among her four small grandchildren in the village of Chiwala, on the outskirts of Lusaka, Zambia. A 72-year-old widow, Maweta has already raised six children of her own, but now she must also care for her grandchildren, whose parents died from AIDS. Each day was a struggle for Maweta. 
After attending a community orientation, however, Maweta began mobilizing women in her village to form a self-help group.

After only 9 months in the program, Maweta had learned how to read and write, perform basic math and accounting, and was able to save $60 by selling mangoes in her community. Maweta also received a loan from her group, which helped her start a business: buying fast-selling food items in bulk and re-packaging and reselling them in smaller units, at a profit. With the earnings from her business, she is now able to provide for the basic needs and education of her grandchildren.

PCI is playing an important role in the alleviation of global poverty with the Women Empowered initiative (WE), with some of the most dramatic successes occurring through microfinance in Africa. We believe that the economic empowerment of women is especially vital for the future development of these communities.

What is Microfinance?

Microfinance is often defined as financial services for poor and low-income clients offered by different types of service providers. The term is often used more narrowly to refer to loans and other services from providers that identify themselves as “microfinance institutions” (MFIs). These institutions commonly tend to use new methods developed over the last 30 years to deliver very small loans to unsalaried borrowers, taking little or no collateral. These methods include group lending and liability, pre-loan savings requirements, gradually increasing loan sizes, and an implicit guarantee of ready access to future loans if present loans are repaid fully and promptly.

From a global perspective, microfinance organizations envision a world in which low-income households have permanent access to a range of high quality and affordable financial services offered by a range of retail providers to finance income-producing activities, build assets, stabilize consumption, and protect against risks.

In 2006, PCI started its first-ever microfinance institution, Planned Social Concern (PSC), in rural Rajasthan, India. PCI began PSC with a very small “seed capital” loan from the Grameen Trust of Bangladesh and, over time, significant amounts of donated capital from a group of San Diego-area private supporters known collectively as the “Jaipur Investors.” PSC is now a sustainable, pro-poor bank that has loaned more than US$2,300,000 to over 10,000 women entrepreneurs, including nearly 4,000 women over the past 12 months, leading to growth in local businesses, household incomes, and the health and well-being of participating families.

On April 4, 2012, PCI co-hosted the San Diego Microfinance Summit at the University of San Diego. The San Diego Microfinance Alliance (SDMFA) – a group of local microfinance practitioners, donors, educators, students and professionals – attended this event. Some of its many members include ACCION San Diego, Foundation for Women, UCSD, La Maestra, and Grameen Foundation. The alliance’s overall mission is to “encourage business growth and create positive change in the San Diego community and beyond.” PCI operates many microfinance programs, and is considered an authority in the field. Sean Carpenter, PCI’s Senior Technical officer for Agribusiness and Micro-enterprise, was a speaker at the conference.

At this all-day event, participants were able to learn from internationally known speakers and breakout session panelists about innovative microfinance models and the effects of technology in this ever expanding field. The networking component was considered a crucial portion of this event.  Attendees were given the opportunity to connect with academics and clients, as well as offer support to local entrepreneurs by purchasing products at the client marketplace that was held outside.

The goal of the summit and the SDMFA members was to create a central location for San Diego business owners, students, professionals and practitioners to collaborate on practices. It provided resources to businesspeople, informed the public about local microfinance news and events, offered learning opportunities to become involved.

On June 18, 2013, PCI introduced the Women Empowered (WE) initiative to three of San Diego’s most vulnerable communities. It was the WE initiative’s U.S. debut. PCI’s global micro-savings program is currently active in six countries, with over 100,000 participants. PCI recently accelerated the WE initiative with a large private donation over $2 million from a San Diego family. PCI’s goal is to integrate WE into programs in each of the 16 countries in which PCI operates, engaging 100,000 women worldwide by the year 2014. PCI is targeting three of San Diego’s most vulnerable communities: East African, Latina and Filipina immigrants and refugees. These communities bring richness and diversity to San Diego, but also struggle in the face of many financial and social challenges. Through participation in the WE Initiative, PCI’s goal is for women from these communities to be empowered to meet these challenges and support their needs and those of their families.

Created in 2011, PCI’s Women Empowered (WE) Initiative is a groundbreaking economic development model that gives impoverished women more control over their future. PCI believes that through the opportunities of microfinance, women are the solution to poverty, poor health and vulnerability. Through WE, women can create social and economic empowerment for themselves, their families and their communities.

The WE Initiative’s savings-led microfinance model positions women as leaders, training 15-20 women to form a self-organized and self-managed savings group within their communities. Through these groups, women learn valuable social and business skills, pool their own resources, and are provided with opportunities to network and participate in community development activities. By positioning women as decision makers and facilitating connections within their local communities, we empower them as agents of transformation within their families, ethnic communities and broader society.