*** 13-Oct-0* ***

Title: DEVELOPMENT: The Microcredit Success Story

By Lewis Machipisa

HARARE, Oct 13 (IPS) - Theresia Gokoko Mbasera has, over the past
eight years, transformed from a traditional grandmother who toils
the soil for a living, into a new age grandma who carries a trendy
cell phone on her at all times.

At 78 years old, most of her peers would be content with
telling stories to grandchildren in the rural areas.

But the energetic Mbuya (grandma) Mbasera, as she is called, is
seen directing operations in eight of her projects in the low-
income township of Glen Norah in Harare.

For 76 years, Mbuya Mbasera had never heard of, or seen, a
snooker table. But among her projects is a snooker table where
people come to play.

Her other projects are a hair saloon, but she is hardly a
customer there herself, dressmaking shop, selling firewood, a
small shop, soft drinks wholesale and a funeral parlour.

But only eight years ago, she used to be an ordinary old woman
selling a few tomatoes and vegetables at a street corner.

''I never used to make any money at all and my children always
suffered,'' recalls Mbuya Mbasera.

''It's just that one can't be completely satisfied but I now
eat what I want and my family is happy,'' she says with a dry
smile.

In 1992, Theresia turned to ZAMBUKO Trust microcredit program.
She took an 80 US dollar loan and started selling tomatoes.

She took another and another. Today, her business has grown to
such an extent that she had to diversify. She has taken a total of
eight loans and has repaid all of them on time.

ZAMBUKO, formed in 1992, is a bank for the poor who for them, a
visit to most commercial bank managers is a nightmare. There are
no smiles, no coffee and no pats on the shoulder that normally
follow any fruitful discussion with a bank manager.

But at ZAMBUKO, David Kombanie, a senior official there, jokes
that your only collateral is your face. His institution, with many
others across Africa, have set eyes on those shunned by most banks
and financial houses.  They have not regretted it.

These Micro Finance Institutions (MFIs) are transforming the
lives of the poorest..

And this week from October 8 to 13, world leaders in the field
of micro finance gathered to convene the Africa Region Micro
Credit Summit, highlighting, "The other Africa": the Africa that
is thriving to uplift those stricken by poverty, disease and
turmoil, the Africa that is now being reached with micro credit".

''Micro Credit is clearly part of the good news coming out of
Africa,'' stressed Sam Daley-Harris, director of the Microcredit
Summit Campaign. ''The challenge of the micro credit summit
campaign and of practitioners throughout the continent is to make
sure that the poorest families are included.''

The Microcredit Summit Campaign was convened to give
participants an insight into the role microcredit is playing in
ending poverty in Africa, where one in four live in abject
poverty.

The Microcredit Summit Campaign is committed to reaching 100
million of the world's poorest families, especially the women of
those families, with credit for self-employment and other
financial and business services by the year 2005.

Microcredit is a simple idea.  If you give a very poor woman a
loan to use in a self-employment venture, you're giving her a hand-
up out of poverty, not a hand-out.

In Africa, a loan of 50 US dollars can go long way.  It isn't
just a small loan. It's a lifeline to people in need who otherwise
wouldn't have any access to credit.

The credit they receive helps them start or build their
businesses.  The profits they earn are used to keep their families
well-fed, housed, educated and healthy.

Over the last year the number of very poor families being
reached with microcredit in Africa has jumped by more than half a
million.

In 1998 the Microcredit Summit Campaign reported reaching  2.1
million very poor African families. That number has grown to 2.6
million in 1999. With high repayment rates, the same money is then
on-lent to more and more poor women throughout Africa creating
exponential impact in the lives of more and more families.

The tool of microcredit is providing a way, to make development
more sustainable, far reaching and targeted at the poorest.

But the sector which has turned around the lives of millions is
at risk.

''We need to stay responsive to clients, but not at the expense
of the institution,'' says Jill Donahue, technical advisor,
Displaced Children and Orphan's Fund in the US.

''It's True that without the client there is no institution,
but without the institution there is no client,'' says Donahue.

Donahue points out that HIV/AIDS has or will affect most
microfinance institutions, their clients, and their client's
families, so microfinance institutions should seek to better
address the crisis for both their clients and their own sake.

''The most cost efficient means to addressing the HIV/AIDS
crisis is likely to be preventive education. Fortunately, there is
good experience in the design and delivery of such education by
microfinance institutions that can effectively deliver the
education while not hindering financial sustainability," says
Donahue.

The consequences of the HIV/AIDS pandemic on the African
continent are unprecedented and far reaching. But for many
families, concerns about sliding into poverty subsume the other
effects of HIV/AIDS.

Income and savings become crucial weapons against the impact of
HIV/AIDS as households struggle to build and protect their
economic resources.

Microfinanance services can help families increase their income
and build their savings. However for most microfinance
institutions (MFIs), the impact of AIDS on their clients and on
the institution is an emerging issue.

''AIDs is not the only cause of poverty, but poverty
intensifies its impact,  Whether households can cope with the
impact of HIV/AIDS, or other emergencies, depends a great deal on
the state of their resources before, during and after a crisis
affects them,'' says Donahue.

Microfinance institutions do operate successfully in
communities seriously affected by AIDS, However, MFIs throughout
the world have learned through experience that the institution
runs into trouble when its staff tries to target loans on groups
they select to meet project goals. MFIs program works best when
they rely on client self-selection and focus on packaging
financial services to attract desired clientele, a paper
circulated at the Harare summit noted.

As the burden on families and communities to absorb orphans
increases, practitioners agree that the best way to help orphans
and vulnerable children, as well as people living with AIDS, is to
economically empower those who care fore them.

''Microfinance is about clients' needs,'' says Clare Wavamunno,
policy specialist for FINCA Uganda. ''We need to go further in
exploring what microfinance can and cannot do in communities that
are heavily affected by HIV/AIDS.''

According to UNAIDS 2.8 million people died from AIDS in 1999,
85 percent of the deaths were in Africa.  Since the epidemic began
AIDS has created some 12.1 million orphans in Africa, out of a
global total of 13.2 million AIDS while 5.6 million more Africans
became infected with the disease last year.

But microcredit is easing some economic pains in Africa

Says UNAIDS: "Microcredit...is an effective poverty-alleviation
instrument....  These group lending schemes grant small loans to
individuals who want to start up a small business and who seem
likely to repay.''

''Communities with HIV-positive people generally meet the
criteria for these schemes, including the presence of many poor
people, the existence of market opportunities and infrastructure
facilities, high population density, approval of local
authorities, and the ability to build trust in the community.''

Experience has shown that the schemes can work very
successfully in HIV-prevalence areas of Africa. In Malawi and
Uganda, for example, the Foundation for International Community
Assistance (FINCA) has achieved 100 percent recovery of its loans.

''In a continent full of tragedy, there is the other Africa -
the one that is seldom shown on the nightly news. These Africans
are bolstering the promise that millions more very poor families
can be reached with the credit and other financial services they
need to rebuild their lives,'' organisers of the summit
say.(END/IPS/lm/sm/00)

Origin: Harare/DEVELOPMENT/
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