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  • Ruth Spencer (EJC)
    Ruth Spencer is a journalist, Editor, producer and hails from Montreal, Canada. She has worked for the European Journalism Centre since September 2008 and has edited all three rounds of TH!NK ABOUT IT. She has production experience in print media, theatre and broadcast television. She tweets via @thinkteam and is currently based in Toronto.
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Editorial

Self-sufficiency and sustainability through micro-credits

Published 19th April 2010 - 7 comments - 4070 views -

In Ghana, as elsewhere in Africa, hostile economic and political environments have resulted in the implementation of a package of economic programmes, which limit the social and economic possibilities and rights of the people in general. If people are poor and cannot send their children to school, it does not make sense constructing a school.

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We should be able to help the parents send their children to school. Apart from school, the people should be able to earn a living and lead a normal life. At Thirdway our overall aim is to improve the economic and social situation of the people by increasing access to income-generating activities and by providing required training.

Above are photos taken from a Thirdway school - lessons from a Drama class on responsible parenthood and a portrait of a pupil at the schol.

Micro credit programmes extend small loans to very poor people and (of late) the working poor for self-employment projects that generate income, allowing them to care for themselves and their families. These initiatives can come in a variety of packages, serve a wide cross section of client base and their product can be delivered in a free standing mode or as an integral part of the services provided by a Community Based Financial Institution or a Credit Union.


In general terms, they fill a gap left by mainstream commercial lenders who simply would not even consider lending to certain potential borrowers for a variety of reasons, thereby leaving them with no choice, other than to seek alternative sources of capital which inevitably incur extremely high rates of interest.


Most of the local self-employed start their income-generating activities on a very small scale, usually with no outside assistance. They keep operating-costs low by using handmade or second-hand equipment and family labour. Businesses often operate from within the home. Unfortunately, they often have no future, since they have no access to capital beyond sources from family, friends, or professional moneylenders. Usually, a small amount of capital can already produce growth.

The soap called Kwame soap is as result of the pilot entrepreneurial business education  project by Thirdway Ghana. Both men and women received intensive training in business education and some selected women undertook training in local soap making. We look forward for more funding to continue with the project
              
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This 90 year old man is weaving what we called KETE it is a traditional way of weaving very special cloths and it can be very laborious since everything is done by hand. It has various stages before the weaving and the final stage. Something for tourists to see. Again financial credit is needed for these people

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The advantages of the professions in which the self-employed are involved are:
·       micro-enterprises are simple to operate;
·       they use locally available skills;
·       they are labour-intensive and create significant employment;
·       they improve the income of the working poor, especially women;
·       they can serve as a basis for community participation and the empowerment of clients;
·       they can pay market interest rates charged on loans, which can help a project cover cost and reach more people.


Though micro-finance is successful, many people in rural areas do not have access to these funds. Institutional and human capacity to deliver services is lacking and investment is needed to build this up in an effective way.
 
About Thirdway Human Rights and Development: Thirdway Human Rights and Development is a small non-profit organization based in the Netherlands dedicated to the promotion of human rights in the West African nation of Ghana and all across the planet. It is associated with Thirdway Human Rights Education and Development America based in the U.S., which works on human rights education and development, further associated locations are in France and Ghana. Contact us to see how you can help http://www.third-way.org

 



Comments

  • Iris Cecilia Gonzales on 19th April 2010:

    Microfinance is necessary because it gives people the chance to start their businesses no matter how small. In the Philippines, there is not enough access to microfinance which puts a lot of people at the mercy of loan sharks.


  • Marina Kudryavtseva on 20th April 2010:

    Micro-credits strategy is definitely one of the essential tool of fundraising, it would be interesting and useful to be familiar with the best practice sharing of such projects as well as to know if there are any organisations/institutions/private sector representatives which are interested in micro-credit campaigns.


  • Iris Cecilia Gonzales on 21st April 2010:

    Yes Marina, I agree. Let’s have a discussion on best practices. I’ll get back to this thread.


  • Hanna Clarys on 21st April 2010:

    In general, I look at microfinancing in a positive way, but sometimes it can also become a curse for people. I recently read a story on a Dutch site about an Indian woman, living in a village near Calcutta, who bought a cow on micro credit. But the cow died a year later, before the woman had the possibility to sell even one liter of milk. So she couldn’t pay back her loan, the bank wouldn’t give her another one, and now her debts have been raised to about 12.000 rupee (which is about 450 US dollars).
    So I think microfinancing might also have its risks and problems.


  • Marina on 26th April 2010:

    anna, thank you for your note. It’s clear that any project can lead to various outcomes, that’s why it’s getting essential which organisation leads the micro finance process and what stands behind the project idea. The simple calculations shows that 50 US dollars from 9 persons can overwhelming change the situation for the mentioned lady from Calcuta.. The same way with micro credits activities, there is not need in huge amount of money, the school in Ghana needs the contribution from people/institutions who is willing to help with the small donations. Hereby i would like encourage to share the ideas what can be done for this school and which parties should be involved in the fundraising activities. Please post any thoughts you have a feeling to share on this topic.


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