IFAD funded projects linking beneficiaries with rural MFIs

Group Pic: CBG, RFP, Nema/PIWAMP, LHDP, GYIN Gambia

The International Fund for Agricultural Development Project (IFAD) supported projects in The Gambia-Rural Finance Project (RFP), Participatory Integrated Watershed Management Project (PIWAMP)/ National Agricultural Land and Water Management Development Project (Nema) and Livestock and Horticulture Development Project (LHDP) together with Micro-Finance Department Central Bank of The Gambia (CBG) and Global Youth  Innovation Network Gambia chapter (GYIN Gambia chapter) are on a countrywide tour linking Country Programme Approach (CPA) beneficiaries to Micro-Finance Institutions (MFIs) in their respective regions.

Meanwhile, the officials who formed the delegation had meeting with beneficiaries of LHDP, PIWAMP/Nema and RFP on opening an account with MFIs like NACCUG, GAWFA and Reliance Financial Services of their choice for sustainability and find out possible funding gaps.

Speaking at various regions in WCR, LRR, NBR, CRR and URR respectively, Mr. Kebba L. Jarju Microfinance Department Central Bank of The Gambia stated that as RFP, PIWAMP and LDHP are on their final stages of phasing-out, Nema project is been designed to build on the achievements and experiences of earlier IFAD-supported projects in the agricultural sector.

According to Jarju, the Nema project design responds to two challenges for the sustainable socio-economic rural development of The Gambia: the limited productivity and economic carrying capacity of land used for farming; and poorly developed domestic markets that generate very low real (cash) demand for the main produce of smallholders.

Linking farmer beneficiaries to the MFI for sustainability, Jarju noted it’s very important for the farmers to open account with the MFI as they (farmers) cannot have access to conventional banks in forms of savings or loans, but with the VISACA’s, NACCUG, GAWFA and Reliance Financial Services it will be easy for them to do savings and have access to loans

 “I encourage all farmers across the length and breadth of the country to be saving with the financial institutions in their local communities, CBG is always encouraging Gambian farmers to deal with registered financial institutions because CBG supervise these registered financial institutions and they have sound financial system.”

The MFIs are in the local communities to serve low income earners; therefore, farmers should make best use of the MFIs been individual, groups or villagers. Saving with the MFI will help them to access loans easily that any other banks, said Jarju.

Jarju gave thumb-up to IFAD projects saying that for the projects to come together to have one team that is linking its beneficiaries to the MFI is a move in the right direction which CBG management welcomes wholeheartedly.

Mr. Banki Njie Business Development Officer Nema said that the overall goal of the project is to sustainably increase food security and raise income of smallholders, particularly rural women and youth, by improving rice and vegetable production through land and water management practices; with a focus on women and youth to enable them to participate more actively in development initiatives.

He noted that the Micro-Finance sub-committee under the IFAD funded projects is linking beneficiaries with MFIs working together to building up farmers with MFIs in terms of strengthening and giving them opportunities to have access to have finance.

Under the Nema business component, agricultural commercialization component would be to provide strategic support to the rice and vegetable markets, from farm-gate-to-Gambian-plate, expressly to increase real cash demand for the produce of the mass of smallholders.

“The business development component of Nema is encouraging farmers to move from subsistence farming to commercial farming and create the opportunities for them move from poverty.”

For Ajaratou Ramatoulie Hydara- Sanyang Monitoring and Evaluation Officer RFP said that the project’s direct benefits is that it would reduce the drudgery encountered by women in their farming activities, improve physical access to markets and production sites and access to labour- saving devices, such as land preparation equipment (power tillers, seeders), harvesting facilities and on and off-farm processing facilities.

“Nema project has potential to transform agriculture and improve economic empowerment for the beneficiaries, thus improve food security.”

Mr. Sheriff Sanyang Monitoring and Evaluation Officer LHDP said that the expected outcome of linking the farmers with the MFIs all gears towards helping the farmers advance their livelihood.

According to Sanyang, many banks are considering agricultural sector as very vulnerable sector to be given loan saying that “banks should not see agriculture as venerable.”

 With the MFIs, Sanyang added that they are working directly with farmers stating that the MFIs know very well when to give loans to farmers.

Presenters representing Reliance Financial Services Company Limited (Reliance) all said that Reliance is a non-bank financial institution, founded by three young Gambian professionals with vast experiences in the financial services sector.

They added that the company is founded on the principles of professionalism, socio business ethics, integrity and transparency to all stakeholders and strongly upholds the values of good corporate governance.

The Institution, they noted was granted a full licence on 11th December 2006, to operate as a Non-Bank Financial Institution under Section 41 of The Central Bank of The Gambia Act No.14 of 2005. This allows us to undertake non-bank financial intermediation by raising deposits and advancing loans from/to the public. We formally opened our doors to the public on 19th December 2006 as a soft launch of our operations.

Doing a presentation onbehalf of GAWFA,  presenter, they stated that GAWFA Finance Company Gambia Limited (GFC) was founded in Banjul in 1987 as a non-profit NGO whose main aim is in empowering low-income women entrepreneurs through microfinance.

According to them, it began with a direct lending program offering microcredit services to poor farmers, people engaged in income generating commercial activities and enterprise training. In the same year it was allowed membership into the Women's World Banking (WWB) network in New York. GAWFA loan products are Individual, large group and solidarity group adding that the lending to groups stands at around 65% of its activities - most of which is outside of Banjul capital.

In 1990 a loans scheme (supported by Standard Chartered Bank Ltd and the woman’s World Bank (WWB) was launched to provide greater access to credit for women. In 1994 however, due to the quite poor repayment rates, GAWFA made it a condition that customers had to save money before they were allowed access to funds. It also introduced a program of group lending. These changes subsequently resulted in a to a near 100% improvement in repayment rates.

In 1997 GAWFA became the initial microfinance institution to be granted a license to operate as a Savings and Credit Company by the Central Bank of Gambia. This was in line with the 1992 Financial Institutions Act and is targeted at rural and urban areas.

At the end of 2010 GAWFA had a total membership of 49,000 with over 14,000 active borrowers on their files. Over 95% of those that the company lends money to are women who wish to pursue various business enterprises.

Its membership services includes non-financial assistance such as training for capacity building via its affiliated partners and related organisations.

In January 2010 the GAWFA was instructed by the Central Bank to set up a finance company, with shares, to take over its financial services activities and other products and services are integrated savings and credit scheme, business and other activities, and the voluntary savings scheme.