Microcredit Project

Obsessed with the desire to positively transform the lives and living conditions of vulnerable children (boy & girls) and women, AYPAD has been undertaken series of research and documentation of experiences together with suggested recommendations of street children and commercial sex workers, most of whom have subsequently been absorbed into AYPAD’s membership, and gradually acquired coping mechanism skills. AYPAD holds the view that women’s empowerment lies with that economic power and decision making abilities, which would also reflect positively on their lives and their families around them  The rationale of this request is to enhance the economic empowerment of the women members of AYPAD through the provision of revolving Micro-Credit scheme.

The main thrust of the project is to effect a revolving micro-credit scheme for women members of AYPAD as a means of enchaining their economic empowerment To ensure these, members would be encouraged to form solidarity groups comprising three members. A number of seven to eight groups would be created  for a start from among the twenty and five targeted beneficiaries. These female members would be given responsibilities as chairperson, secretary and collector per group who would co-monitor each other to ensure timely repayment of loans to ensure the support of other women in subsequent scheme  The strategy would also involve the registration of members, and preparation of membership card to be used as a means of monthly registration. Members would be encouraged to engage in a regular meeting to ensure effective utilization of the funds, overcoming problems and ensuring the timely repayment of loan.

Final Goal

$15, 000

Fund Raised

$500

3.00%

Goals

1. To ensure the economic empowerment of women members of AYPAD through the provision of microcredit, making them part of formal economy too and less dependent on high interest rate payments.

2. To create a revolving loan scheme for women through the formations of Solidarity groups, so as to help women empower each other.

Challenge

    Microfinance on its own is not a solution to eradicate extreme poverty. It can deliver positive effects only when it is combined holistically and integrated effectively with other economic and social programmes to meet the diverse needs of the poor and help lift them from poverty. Particularly at the industry level, key elements are necessary to form an integrated framework include adequate regulatory frameworks, legislation that protects consumers, and improvements in transparency and accountability of the public sector. In the current economic environment of on-going global financial and economic instability, microfinance lies at the heart of Africa’s efforts at delivering inclusive socioeconomic development.

    Microfinance offers significant opportunities for African countries to fully unleash the private sector’s potential and contribute to addressing emerging and long lasting development challenges such as poverty, income inequality, high levels  overview and suggestions for action by stakeholders  of unemployment, particularly amongst its youth, and the achievement of the UN Millennium Development Goals (MDGs). It is estimated, however, that as of 2007 only around 12.7 per cent of the poorest families in Africa had access to microfinance services compared to 78.5 per cent in Asia. By developing services and industries, the African private sector will provide necessary services and generate employment opportunities necessary for transformative economic growth. A majority of African private businesses continue to be predominantly informal, dominated by small and micro enterprises. Despite their informality, these enterprises have yielded important benefits. The informal sector has acted as a “regulator of the economy” in times of economic downturns and crises, absorbing much of the shock of periodic economic contraction. It has also absorbed excess labour and provided additional incomes to persons whose real incomes have been eroded. Against this backdrop, this report provides a comprehensive examination of the achievements thus far and the challenges and gaps that still remain in increasing provision of microfinance in Africa at the institutional, industrial and national levels.

Solution

AYPAD Microfinance Project has developed out of experiments. The project will provide financial services to low income poor and very poor self-employed people, these financial services include savings and credit, but can also include other financial services such as insurance, transfer of payment services and remittances. The project ensure the  provision of financial services such as savings, loans and insurance to poor women living in both urban and rural areas and who were excluded to obtain such services from the formal financial institutions and have so limited options to improve their lives.