Making a Difference With MicroFinance

I’ve been lending money through KIva, a non-profit microFinance organisation, since 2012. Every month I’d lend money in $25 chunks to people around the world with limited or no access to other ways of borrowing. This month my total loans passed 1,200 and on average each $ I have put in has been lent to five borrowers.

I’m really pleased that I have been able to help so many people around the world.

Obviously this way of helping is not a panacea, but neither are the big, top-down, international projects. Both have their place, and with microFinance I not only like the idea that I can make what I give work harder and be more effective (because loans are repaid and I can re-lend), but also that these individuals and groups decide what it is that they need to improve their own lives, be it farming aid, sanitation, material and supplies, education, health, and so on. Nobody is deciding what is important for them.

I’ve learned a few things on the way. In particular how improving things in one place helps elsewhere, and how having enough cash to not have to live hand-to-mouth helps lift people out of an economic trap.

One group I always like to lend to is the Babban Gona farmers organisation in Nigeria. Babban Gona lends money to smallholders and provides advice and resources,  These three extracts from a recent report:from a Kiva field volunteer shows exactly how everything joins up:

Farmers that I spoke to – with the help of a Hausa translator – spoke glowingly about Babban Gona’s agronomy training. Farmers has switched from broadcasting fertilizer on their field to micro-dosing at the plant’s root system, consistently spacing plants and thinning corn seedlings… One farmer, Sale, told me about his 0.5-hectare (1 football field) farm: “I was a bit worried about paying back the loan. Babban Gona officers mapped my field and told me that I would have to produce 10 bags of corn, but usually I only produce 7. I got 26 bags [of corn] that year

I was surprised to see how manual agriculture is in northern Nigeria – it’s standard to pluck corn kernels by hand from the cobs. Manual corn processing can take 30 hours of labour per 100 kg bag, compared to one hour for machine threshing. Babban Gona farmers use machine threshers, and since manual threshing is usually done by the farmer’s family, saving a week of work per bag of corn means freeing up time for women and children.

… farmers without access to credit in rural Kaduna and Kano urgently need money by the time harvest season arrives in December. During harvest, corn prices drop with the market glut. In contrast, the Harvest Advance loan that Babban Gona provides to their farmers at harvest allows them to stockpile the grain, watching the market and selling the grain at a premium.

It’s easy to get involved and if you don’t want to use Kiva there are several other organisations that do similar things. However, if you do want to, drop me a line and I’ll send you an invitation, or you can just follow this link.

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