Small Loans
In developing countries, it is women who are most often affected by poverty. Despite little or no income, they are responsible for the wellbeing of families. However, this predicament also means women are often in the best position to bring about positive change.
The Adventist Development and Relief Agency’s (ADRA) Small Enterprise Development (SED) program in Papua New Guinea provides a way for women to help not only themselves, but their families.
The ADRA SED program uses short, intensive workshops to teach basic small-business management skills, and provides women with no collateral access to credit. Using small groups as its base, the SED program demands that each group member save money then contribute those savings to the program. The collected savings are then made available as loans to members of the group, who use their individual savings as informal collateral.
The loans are usually only K100-250 ($A45-110), with interest a low 2.5 per cent. Most are repaid within five months. They are usually made to women in such small businesses as doughnut, bun or ice-block selling; poultry farming; sewing; retailing store goods; or gardening.
An important factor contributing to the success of the SED program is the cohesion of groups. They provide a safe place to save money, build interdependence and relationship, and provide ongoing training and activities.
Maureen, 32, is the SED area supervisor for the Ramu District, inland from Lae. She left school in Year 8, then relied totally on her husband’s low income. Then she joined a SED group, where she learned business management and saving habits. Maureen has begun a tailoring company and school. “If I’d not known about SED, I don’t know where I would be now,” she says. She plans to open a hairdressing and beauty salon.
Jacklyn lives in a squatter settlement on the outskirts of Lae. She relies heavily on poultry farming to earn an income for her family’s needs and school fees. Her husband is unemployed and she is illiterate. But, since joining a SED group, Jacklyn’s business has grown.
It took her almost two years to save K800 ($A350) in her SED group. Then, after attending SED management training, she took out a loan for K1000 ($A450) to use in her poultry business. With the increased poultry sales, she paid the school fees for four children, renovated the poultry sheds and commenced renovating her house. She’s also begun retailing store goods from her front yard. “I will never leave SED, because it’s made me what I am today,” says Jacklyn.
Esther, a housewife, lives in Tent Siti settlement. Her husband receives a small income as a teacher, while Esther cooks and sells doughnuts. Since joining a SED group, Esther has taken out (and repaid) a K500 ($A225) loan. It helped set up a mini trade store. She’s taken another for K1000, with the aim of extending her store. “In the past, what I earned today would be gone tomorrow. Now I am financially secure for the future, and I thank God for SED,” says Esther.
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