Microcredits for entrepreneurs in Benin
Intervention area: Microfinance
Context: The groups of women from the rural areas of Benin are missing the resources needed for the implementation of small income-generating businesses which would enable them to improve the life-conditions of their families and in some cases allow them to exit the poverty threshold.
Needs: These women need to have access to financial resources, receive financial consulting in the efficient use of these resources and a close follow up of their progress.
Goal: The autonomy of these families thanks to the creation of income-generating activities.
Support from Seeds: The provision of financial resources and technical support for the microfinance operator CAIES.
Contribution from Seeds: 5000€ attributed to this project (Phases 1 and 2).
Summary of the project
Context of the country: With a life expectancy of 56 years old, an illiteracy rate of 60%, and 47% of the population living below the poverty line, Benin has one of the lowest human development index in the world (UNDP). Its income per capita is only at 700$ (WB). Its economy remains under-developed and dependent on subsistence agriculture, cotton production, and regional trade (CIA World Factbook). Nevertheless, its political stability, strong government reforms and strategic geographical position for trade are conductive to economic growth in the coming years (African Development Bank, AFDB). Access to financing is a key concern for the private sector, as the Benin bank penetration is the lowest in the WAEMU area (5%) (AFDB).
Location of the project: The project was located in the city of Bohicon, in the southern part of Benin, 133km north from Cotonou. It has a population of 132,894 inhabitants (SERHAU- SA, 2007). It benefits from a strategic geographic position, being the transit hub for transports between Cotonou’s port and the north of the country (WB). The main economic activities of this commune are small business/trade (47%) and arts and crafts (17%), followed by agriculture (Houngnihin, 2006).
Activities: A young team of 9 local staff is providing micro-credits to the population living in the rural area of Ouassaho (Bohicon). This activity is accompanied by the provision of training and financial advise to the beneficiaries. The average loan is 21 EUR. The beneficiaries are mainly women who work in small business of food transformation and in the markets.
Partner: CAIES, Cooperative d’Appui aux Initiatives Economiques et Sociales.
Activities: We supported CAIES in 2 ways: financially, in order to boost their growth and enable them to answer the unmet needs of the beneficiaries; technically by providing them with advice in microfinance and financial procedures.
Budget: During 2014, Seeds provided CAIES with an interest-free loan of 2,500 EUR. (Phase 1) A second loan has been sent at the beginning of 2015, enabling CAIES to continue providing micro-credits to new beneficiaries. (Phase 2). The next step was to buy CAIES a special software for the management of savings and loans, which has increased their efficiency and transparency, and in that way gave a better support to the beneficiaries. (Phase 3).
Impact: Thanks to this, almost 1000 women have received financial resources for the development of their business within the first year (average duration of loan: 3 months).