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					                              Opening Doors
                              Empowering Women through Microcredit in Sierra Leone
                                                                                                  by Heidi Berkmüller, Phillip Koller, Jennifer Lawonn,
                                                                                                       Nahide Pooya, Helge Roxin and Julia Schappert

                                                                                                 Auntie Jeneba is one of the many

                                                                             Even though
                                                                                                 women receiving microcredit in
                                                                             obtaining the       Sierra Leone, a post-conflict country
                                                                             loan was costly
                                                                             and time            ranking 158th of 182 countries in
                                                                             Auntie Jeneba is    terms of its HDI. In an overall poor
                                                                             now grateful for
                                                                             the new
                                                                                                 context, women like Auntie Jeneba
                                                                             opportunities       are even more vulnerable. As a child,
                                                                                                 she, like many other women, did not
                                                                                                 have the opportunity to go to school.
                                                                                                 High illiteracy rates among women
                                                                                                 result in decreased access to the
                                                                                                 formal sector and hence increased
                                                                                                 activity in the informal sector where
                                                                                                 state support is limited. In her cake
                                                                                                 soap making business, Auntie Jeneba
                                                                                                 has no form of social security from
                                                                                                 the state. However, she hopes that by
                                                                                                 sending her daughter Hannah to
                                                                                                 university, she will enable Hannah to
                                                                                                 have a better job with a regular
                                                                                                 salary. By ensuring a better future for
                                                                                                 Hannah,      Auntie     Jeneba     has
                                                                                                 simultaneously invested in a form of
                              In the hustle and bustle of Bo, Sierra                    security, since she will not receive state
                              Leone’s Southern Province capital, men and                support in old age and will have to rely on her
                              women scurry about their daily business.                  daughter to take care of her.
                              Traders dominate the streets, offering
                              choosy shoppers everything from cotton                    Limited educational opportunities also
                              fabrics to household items and fresh                      impede women’s political participation,
                              produce. Auntie Jeneba is tired as she                    which in turn is crucial in a setting where
                              returns from selling her cake soap, but she               statutory, customary and religious laws hinder
                              is smiling. Sitting on the new plastic mat                access to vital resources like land and restrict
                              covering the cement floor of her house, she               women’s ability to decide over matters such
                              talks about how taking microcredit has                    as marriage and divorce. Although widowed
                              changed her life. With a large grin, a splash             women such as Auntie Jeneba may find it
                              of amusement and perhaps a hint of                        easier to make decisions for their household,
                              embarrassment, she explains “before, when                 in her case the lack of a husband severely
                              Kamanda [the Loan Officer] came to visit, I               limits access to resources.
                              would rush out to close my door so that he
                              can’t see inside my house because I had no                   Key players in the Storyline include…
                              mat on the floor and no furniture.” This has                 a. Members of loan groups and individual loan
                              changed       since   she     started  taking                   takers from the local population, such as Ms.
                                                                                              Jeneba, Ms. Ramattu, Ms. Kadiatu;
                              microcredit. She has expanded her business
                              and proudly adds “now, I have bought a bed                   b. Loan officers from different MFIs such as Mr.
                                                                                              Reynold, Mr. Kamanda;
                              and a mat and I invite Kamanda in when he
                                                                                           c. Members of Management from MFIs such as
                              visits. In fact, now I leave the door open so                   Ms. Cecilia, Mr. Foday.
                              that everyone can see inside.”
                              2011-02-14     Empowerment through Microcredit in Sierra Leone (BMZ/KfW) – POVNET Task Team on Empowerment            /1
                              It is against this backdrop that MITAF, the                 drives when he met Ramattu Kargbo, who

                              Microfinance Investment and Technical                       later became his client. “I had gone to Kroo-
                              Assistance Facility, operates.                              Town City market to advertise our credit
                                                                                          products. On this occasion Ramattu was
                                                                                          present and asked me some questions about
                                MITAF is a multi-donor facility composed of
                                                                                          the programme. She seemed interested and
                                KfW, the United Nations Capital Development               sometime later she came to GGEM with a
                                Fund, the United Nations Development                      group of women to apply for the loan” he
                                Programme and Cordaid in cooperation with the             recounts.
                                Bank of Sierra Leone, and the Ministry of
                                Finance and Economic Development. The
                                facility started its work in 2004 with the objective      Ramattu prepares and sells lunch meals for a
                                to provide financial services for “the poor but           living. Every day she wakes up early to go
                                economically active population”.                          and buy fufu, a local staple made from
                                In the course of roughly six years, MITAF has             cassava, and makes sauces to go with it. With
                                supported microfinance institutions (MFIs) that           the income, she helps to support her
                                have provided a loan portfolio of USD 13 million          household, which consists of her, her children
                                to roughly 130,000 clients, of which about three
                                quarters are women. More than 10 MFIs                     and grandchildren, and her husband. A warm
                                benefited from MITAF’s support during the six             and jovial woman, she seems sincere and
                                year project.                                             takes pride in what she does. As Reynold
                                                                                          observes, “to me she made a very confident
                                                                                          and honest impression. When she applied for
                              According to Foday Samura, the Branch                       the loan I actually asked other people about
                              Manager of LAPO-Bo – the MFI from which                     her. Everyone told me that she is an honest
                              Auntie Jeneba obtained her loan – microcredit               and hard working person.” It was not difficult
                              is a useful instrument for achieving                        for him to consider her for a loan and, after
                              empowerment of women in Sierra Leone as                     providing her with all the necessary
                              there is a large number of women such as                    information, the next step was to form a loan
                              Auntie Jeneba who need money to continue                    group.
                              their business: “they need capital but cannot
                              borrow from banks that require high
                              collateral. MFIs are
                              simple compared to                                                                                   Selling lunch
                              banks.” This is echoed                                                                               Receiving credit
                                                                                                                                   has enabled
                              by Auntie Jeneba who                                                                                 Ramattu to
                                                                                                                                   expand her
                              says that it was easy to                                                                             business
                              qualify for a loan.

                              Most MFIs have similar
                              ways of recruiting
                              clients. In urban areas,
                              loan officers usually
                              visit markets and other
                              communal         spaces
                              where they make public
                              announcements about
                              the services they offer
                              and/or talk to clients

                              Reynold, loan officer for the Grassroots
                              Gender Empowerment Movement (GGEM),
                              was involved in one of these recruitment

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                                 For poor clients, accessing a loan is expensive           very cautious when selecting clients, but

                                                                                           Auntie Jeneba seemed very credible.” Now,
                              This was no easy task for Ramattu as it is                   after her second loan cycle, they have a close
                              difficult to find group members whom you                     relationship and regularly call each other just
                              feel you can rely on, a problem which Auntie                 to chat.
                              Jeneba also encountered. After forming a
                              group, there is a selection procedure which                     The connection between loan officer and client is of
                              involves several official and anonymous                         great importance
                              visits by loan officers to the potential client’s
                              home and business. These visits entail                       In fact, for Auntie Jeneba the relationship is
                              conversations with neighbours about the                      so close that she says “Kamanda is like my
                              client’s person and their business activities                son.” It seems that the line between
                              and success. When this is found to be                        professional distance and a close relationship
                              satisfactory, the necessary application forms                to clients is blurred. In a context where family
                              and other formalities are arranged.                          cohesion plays an important part in people’s
                                                                                           daily lives, it may be a good strategy to foster
                              Ramattu feels that the whole application                     mutual trust and loyalty to the MFI though
                              process was time-consuming because she first                 some distance would need to be kept as it
                              had to find money in order to pay the 15%                    remains a banker-borrower relationship,
                              cash collateral as well as smaller expenses for              albeit a non-traditional one.
                              things like passport photos. Such up-front
                              expenses make it difficult for poor women to                 The nature of the relationship between client
                              access loans in the first place and may even                 and MFI greatly depends on the loan officer’s
                              require them to go to great lengths in order to              character. A winning personality and a
                              obtain this money. While some may need to                    willingness to invest personally in clients can
                              borrow money, others have to turn to other                   go a long way in retaining them and
                              means. Auntie Jeneba, for instance, found                    furthering empowerment through dedicated
                              herself pressed to sell a special tray, which                monitoring of clients’ progress, in order to
                              she had bought for Le 100,000, for less than                 make sure that they draw as much as they can
                              the original price in order to pay the                       from the loan. Kamanda believes that LAPO
                              application fee and cash collateral. Though                  clients are satisfied with their services
                              much cheaper than any moneylender - often                    because their staff members “make
                              called “loan sharks” - accessing a loan is                   themselves available to people and make
                              expensive for poor clients.                                  things easy for them.” He also believes in the
                                                                                           advantages of microcredit, saying that
                              However, Auntie Jeneba is glad that she took                 “poverty would be twice as much without
                              the loan and is grateful for the new business                microcredit”.
                              opportunities it gave her. Since her husband
                              died, none of the businesses she attempted                   Indeed, access to finance is something which
                              ever flourished and she wanted to change this.               Auntie Jeneba is exceedingly grateful for,
                              She decided to try her luck with microcredit                 stating again and again how thankful she is
                              and started looking for the MFI offering the                 and that “LAPO will surely prosper.” Yet,
                              best services. She met her loan officer                      what is also important is that clients realise
                              Kamanda at a local meeting place where they                  not only how they depend on their MFI, but
                              sat down and talked about the loans his MFI                  also how dependent MFIs are on their clients.
                              offers. Applying for a loan with LAPO                        As echoed by Ramattu’s loan group: “it is a
                              seemed easy and she instantly liked Kamanda                  give and take relationship. GGEM is helping
                              so she decided to borrow from them.                          us by giving us the credit, but they also gain
                                                                                           from us through our repayments.” Arguably,
                              Kamanda, in his charming way, recounts his                   it is important that clients are aware of this so
                              impression of Auntie Jeneba as being a                       that they realise that they are also in a
                              determined and sensible individual: “I am                    position to express their specific demand for

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                              product features like lower interest rates,                 “Being a woman in Sierra Leone means carrying all
                              different repayment periods, other financial                of the burden“
                              services or additional financial services.
                                                                                       However, the impact of increased material
                                                                                       wealth must be placed in context. According
                              Changing Lives                                           to Ramattu, “being a woman in Sierra Leone
                                                                                       means carrying all of the burden and being
                              For most clients, microcredit results in                 responsible for the children. Husbands will
                              changes in different dimensions of their lives           mostly give commands and do nothing so the
                              even beyond the material. Clients such as                woman is forced to take care of everything.”
                              Ramattu, for instance, experienced changes               In fact, she is spending more time at her
                              not only in terms of income but also in her              business and working more. Ramattu believes
                              relationships. Ever since she started receiving          that she currently has too many
                              credit, Ramattu has gained a certain degree of           responsibilities in the household, but feels
                              independence. She no longer needs to ask her             that she cannot change this. In this way,
                              husband for money and can decide with what               receiving credit has not eased her social
                              items she wants to support her household.                burden because she is now expected to
                              Ramattu feels that now, her husband has less             contribute more to the household.
                              power to tell her what to do and explains
                              “now, even when I want to buy fine clothes, if
                              he doesn’t want to buy them for me I just buy                                                  contribution
                              them.” This is because she now has money of                                                    “Before, it was
                                                                                                                             difficult for me
                              her own.                                                                                       because I saw my
                                                                                                                             family suffer but
                                                                                                                             had no means of
                              Even so, her husband, Abu Fode-Bangura,                                                        helping them. But
                                                                                                                             this has
                              would still prefer her to consult him on how                                                   changed.“

                              she spends her money. Before she applied for                                                   Ramattu Kargbo,
                              her first loan, she asked him for permission,
                              which he granted her. When asked, Ramattu
                              adds that she would not have taken the loan
                              without her husband’s permission: “in order
                              to avoid conflicts at home you must obey your
                              husband.” According to Abu, Ramattu should
                              still be asking him to advise her in the correct
                              way: “by right, you are supposed to discuss
                              everything. But African women will just go
                              and buy things.” Yet, he himself also spends             On the other hand, she also sees the
                              his money without asking for her advice.                 advantage of her responsibilities. Through the
                                                                                       financial possibilities from her business
                              But even though Ramattu will not consult                 earnings, she is now able to take care of her
                              him on every matter, Abu has more                        household. Her contributions have increased
                              confidence in her now: “I see that she is                since getting credit and expanding her
                              doing well and is able to spend her money                business, and she feels proud about it.
                              wisely.” The couple is now more at ease
                              because Ramattu does not have to ask her                 For a single woman such as Auntie Jeneba,
                              husband to buy things for the home or to give            the situation is somewhat different. After
                              her money, which frequently created tension.             being widowed and then divorcing her second
                              Now that she has her own money there is                  husband, Auntie Jeneba found herself worse
                              more peace at home and their relationship has            off than before. She had less financial means
                              improved.                                                but more responsibilities and was making all
                                                                                       of the decisions for her and the five children
                                                                                       in her care. When she wanted to start a

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                              business, she had very little capital to work            women who do not understand the offered
                              with, so most of her endeavours failed. With             trainings because they believe they know
                              anything that she tried, “it would all go,” she          everything”. However, it may also be the case
                              remembers sadly.                                         that trainings are not sufficiently adapted to
                                                                                       clients’ needs.
                              It was after numerous such disappointments
                              that she decided to turn her life around. She
                              chose to take a loan with which she bought               Making a Loan Successful
                              flour, sugar and oil and started to bake cakes
                              to sell at the trade fair. This earned her a             In light of Auntie Jeneba and Ramattu’s loan
                              substantial profit, which she invested in day-           success, what are the preconditions that cause
                              to-day domestic expenses, furniture, school              a loan to support empowerment? Some
                              fees and university fees for her eldest                  factors, such as the cooperation of husbands
                              daughter. Although she, like Ramattu, now                and maintaining a good relationship between
                              spends more time at her business, in Auntie              client and loan officer/lending methodology,
                              Jeneba’s case it has helped her improve her              have already been touched upon. Other
                              situation and that of her household without              factors relate to the client herself.
                              substantially increasing her burden.
                                                                                       Firstly, previous experience and adeptness in
                              Both Ramattu and Auntie Jeneba are now                   business are likely to influence the extent of
                              materially more secure than before. In Auntie            material success that can be drawn from the
                              Jeneba’s case, this also had a notable impact            loan. With her first loan, Auntie Jeneba
                              on how she is perceived by others. Before the            started a very successful cake business.
                              loan, Auntie Jeneba used to lock herself in              However, as ingredients became more
                              her room or leave the house for days at a time           expensive and people were reluctant to buy
                              in order to evade people whom she owed                   cakes at a higher price, Auntie Jeneba did not
                              money. “People used to hardly speak to me                hesitate to adapt to the market and
                              and I had little time to belong to groups” she           discontinue making cakes. When she took her
                              remembers. Now that she has money and has                second loan, her first priority was to pay the
                              a daughter in university, she is more                    remainder of her daughter’s university fees,
                              respected.                                               which made up two thirds of her loan. She
                                                                                       used the remainder to invest in making cake
                              A change in terms of social recognition is               soap, a skill she learned at a training centre
                              also echoed by Ramattu and her credit group.             after the war. When the second cycle loan has
                              They are satisfied with the services of their            been repaid, she plans to invest her third loan
                              MFI because of the positive impact the credit            in a more profitable business according to
                              has had on their lives. “Now we don’t need to            what is in seasonal demand. Auntie Jeneba’s
                              ask no one for anything anymore. We don’t                ability to identify market niches, as well as
                              have to beg our relatives to lend us money.              plan and prioritise, make her a successful
                              Now we have our own money” they explain.                 business woman and better able to take full
                                                                                       advantage of what microcredit has to offer.
                              Perhaps the area in which there has been the             Even her loan officer Kamanda says “I
                              least microcredit-induced change in the lives            believe that in time, Auntie Jeneba will be
                              of our protagonists is knowledge and skills.             able to qualify for the highest loans that
                              Training by MFIs usually takes the form of               LAPO has to offer.”
                              general advice, as well as basic calculations
                              regarding expenditure, income and profit.                Similarly, personality can go a long way in
                              However, Ramattu and Auntie Jeneba                       determining     empowering     impacts   of
                              emerged from these trainings feeling that they           microcredit. Both Ramattu and Auntie Jeneba
                              did not learn much. The question is whether              are described by those around them as being
                              or not they already possess important basic              confident even before they became MFI
                              skills. As Ramattu explains “there are many              clients. According to Kadiatu Kamara, a

                              2011-02-14      Empowerment through Microcredit in Sierra Leone (BMZ/KfW) – POVNET Task Team on Empowerment   /5
                              member of Ramattu’s loan group, “Ramattu                     encourage women to “help each other to

                              has always been a very confident person and                  develop those of lower standard.” This is
                              ever since I’ve known her I remember that                    advantageous for both LAPO and the women.
                              she has been respected much by others. The                   Similarly, Kamanda believes that the benefit
                              women here in our compound and in our                        of a group approach is that it gives clients a
                              credit group all hold her in high regards.                   sense of responsibility: “in the case of
                              Whenever we discuss something in our credit                  malpractice, the group will oppose it and take
                              group, the other group members will mostly                   their own measures.” Additionally, women
                              follow her advice.” Factors such as these can                can compare themselves to others in their
                              prove to be very important in dealings with                  group, which may increase motivation to
                              other actors who have considerable influence                 become even more successful. Yet, both
                              on the successful use of a loan.                             Foday and Kamanda see groups more as a
                                                                                           way to ensure that a loan is repaid and less
                              Additionally, both Ramattu and Auntie                        attention is paid to group solidarity for non-
                              Jeneba initiated their loan groups and are                   financial reasons. This is also reflected in the
                              group leaders. Auntie Jeneba decided to take                 fact that almost all groups are specifically
                              a loan because she saw in it a means to                      formed for the purpose of taking credit and
                              improve her life. She made the decision                      have not been in existence before.
                              independently, which may be an indication of
                              an empowering moment of change in her life.
                              In Ramattu’s case, she is described by                          Group dynamics influence the loan success
                              Kadiatu and the rest of her group as being a
                              good leader who is organised and “reminds                    This is also largely true for the members of
                              group members about repayment even before                    Ramattu’s loan group. Although they do talk
                              the loan officer does.” She is driven and                    about things like family issues, their monthly
                              determined to maintain a good loan profile,                  meetings are intended for mutual advice on
                              even if this responsibility increases her                    the loan and business matters. If one of the
                              burden, especially since GGEM also requires                  group members were to have repayment
                              her to spend her own time and travel costs to                problems, the others will discuss the matter
                              bring the money to their office.                             and usually decide to help that person. Thus
                                                                                           far, they have never defaulted and continue to
                                 “People now recognise me and when I sit in                qualify for higher and higher loans.
                                 meetings, I am proud and take up a lot of space“
                                                                                           On the other hand, they are a close group of
                                                                                           neighbours who see each other every day and
                              Both women say that they were able to talk to                knew each other well even before they
                              people in higher places about issues of                      formed a loan group, which means that they
                              concern to them before they took microloans.                 sometimes also discuss private matters.
                              For Auntie Jeneba, this has become even                      Kadiatu, for instance, recalls her longstanding
                              easier after the loan because, as she puts it,               relationship with Ramattu: “I have known
                              “people now recognise me and when I sit in                   Ramattu for the last 18 years. Since we met
                              meetings, I am proud and take up a lot of                    we have been close friends. She treats me like
                              space.” The existing personal potential of                   her own daughter. When I had my first child
                              each client determines their ability to make                 it was her who helped me during my
                              the most of financial opportunities, hence                   pregnancy and who advised me on educating
                              determining the impact of microcredit.                       my daughter. Ramattu has always been very
                                                                                           helpful.” It is not difficult to imagine that
                              Yet another influencing factor on loan                       such relationships sustain and strengthen
                              success is the group approach and group                      positive group dynamics.
                              dynamics. Foday, the Branch Manager from
                              LAPO, believes that a group approach to                      Ramattu’s group members emphasise that all
                              microlending is useful because it can                        of them are equal in the group. When they
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                              have to make a decision, like how large their            existing level of respect enabled Ramattu to

                              next loan should be, they will discuss this              become the leader of her loan group and the
                              amongst each other and make a decision                   loan success has further consolidated this
                              together. It seems that a tight-knit group is            status.    Moreover, increased financial
                              better able to provide the necessary support             contributions have even enabled Ramattu to
                              network in case of problems and they are                 have more decision-making power at home.
                              better equipped to solve their own problems.             However, according to Foday, problems at
                              In this way, they may also be able to take               the household level can result even when the
                              better advantage of financial opportunities              loan leads to business success. For instance,
                              and ensure more positive, empowering                     when husbands see their wives making
                              impact.                                                  money, they may neglect their household
                                                                                       responsibilities. As Ramattu reiterates,
                              As opposed to this, Kadiatu Mansaray from                “actually my husband should be responsible
                              another credit group in Bo has little or                 but because he doesn’t meet his
                              nothing to do with her fellow group members.             responsibilities I take care of things.
                              “In my loan group we discuss only                        However, this also means that I am the one to
                              microcredit. We don’t come together often                decide.” This kind of turn around of
                              except for repayment” she tells us. Even                 traditional decision-making processes in the
                              though she seems well-respected in her                   household is still rare in Sierra Leone, but as
                              community and is liked by others, microcredit            Ramattu shows, such changes are possible
                              did not lead to any significant turning point in         when the loan is received at the right time by
                              her life.                                                the right women.

                                                                                       Moreover, it is often the case that household
                              Supporting Empowerment Processes                         relations only remain harmonious if the
                                                                                       gendered family structure is largely retained.
                              What do the experiences of Ramattu and                   The few clients who have increased decision-
                              Auntie Jeneba tell us about supporting                   making power related to expenditure, for
                              empowerment processes?                                   instance, are still not able to decide about
                                                                                       things that are not related to money, such as
                              Looking at the success of Ramattu and Auntie             marriage of their children or visiting their
                              Jeneba, it can be said that important                    parents. As Kadiatu explains, “I can decide
                              preconditions for “empowering loans”                     about expenses for food and investments in
                              include possessing the necessary business                my business. […] my husband will choose
                              skills in order to make the most of their loan.          who our children will marry”. This means
                              While Auntie Jeneba showed flexibility in                that microcredit has an impact, but does not
                              adapting to the market, Ramattu successfully             serve to change the core gendered social
                              expanded her existing business by offering a             structure. However, it must still be
                              larger range of dishes. Moreover, the close              acknowledged that increased decision-making
                              relationship between loan officer and client             on expenses is a step in the right direction and
                              also played a part in ensuring that any                  with time, may encourage changes in other
                              problems with the loan are detected and                  areas.
                              addressed early and that clients can regularly
                              be advised. These factors enabled clients to             Furthermore, it should be underlined that
                              increase their income which made positive                Ramattu and Auntie Jeneba are two
                              changes in other areas of their lives more               successful examples of MFI clients. Even
                              likely.                                                  before they received credit, they were
                                                                                       confident, hard-working women with the
                              Particularly among women such as Ramattu                 necessary strength of character, money
                              who were already fairly well respected to                managing skills and business know-how to
                              begin with, a financially successful loan can            make the most of their loan. This is not the
                              easily underline their social status. Her                case for all clients. According to Foday,

                              2011-02-14      Empowerment through Microcredit in Sierra Leone (BMZ/KfW) – POVNET Task Team on Empowerment   /7
                              problems among clients include not using or                  with an MFI and prompts most clients to say

                              managing the money well e.g. by buying                       that they would prefer taking an individual
                              clothes instead of investing, which results in               loan if they could.
                              repayment difficulties.
                                                                                           Disempowering effects on the household
                              Not all women possess the business skills                    level can occur when husbands become
                              required for successful loan use and the                     discontented – particularly if they are acting
                              training usually received in MFI introductory                as their wife’s guarantor. As Reynold
                              workshops generally does not cover business                  explains, “taking a loan might create tension
                              skills. This is why closer collaboration with                within the household. Especially when there
                              specialist business development provides                     are repayment problems, conflicts between
                              could dramatically increase positive impact,                 wife and husband may arise.”
                              which could in turn increase the empowering
                              effects of microcredit. Women who are less                   In addition, Foday remarks that “some women
                              able to invest their loan successfully and                   are just not ready to be empowered.”
                              therefore have repayment difficulties                        Underlying this statement is the fact that there
                              experience high pressure to repay, causing                   are certain ‘prerequisites’ in terms of
                              them to tap into their savings, borrow from                  personality, skills and social context, which
                              other sources or abandon their intention to                  determine the extent of success. What is
                              repay and relocate.                                          relevant here is knowing when a woman is
                                                                                           ‘ready’ and in what situations a loan is most
                                                                                           likely to bring about an empowering moment
                                 Social pressure, solidarity and potential for             of change in a woman’s life. It cannot be
                                 improvement                                               expected that all women be like Auntie
                                                                                           Jeneba, who identified for herself which point
                                                                                           in time was the right moment for her to apply
                              Pressure to repay can also have social                       for a loan. In light of increasing competition
                              impacts. Many women report feeling                           among MFIs, an MFI which is able to assess
                              embarrassed when the loan officer comes to                   the right time to give loans will have an
                              remind them about repaying their loan                        advantage.

                                                                                                            Another area of potential
                                                                                              Photos of loan
                                                                                              defaulters arelies in the group approach.
                                                                                              MFIs rely on
                                                                                                            To date, organisation in a
                                                                                                            loan group is considered
                                                                                              social pressure
                                                                                              to get their
                                                                                              money back    more as a way to ensure
                                                                                                            loan repayment and less as
                                                                                                            a     way     to   increase
                                                                                                            empowerment. Rather, the
                                                                                                            empowering social effects
                                                                                                            of group solidarity are
                                                                                                            seen as a useful by-
                                                                                                            product        of    group
                                                                                                            formation. As Cecilia
                                                                                                            Decker, the Director of
                                                                                                            GGEM, puts it, “a group
                                                                                           approach is useful because of the mutual
                              Also, peer pressure in loan groups may hinder
                                                                                           support that women give each other.
                              the evolvement of empowerment processes in
                                                                                           Furthermore, they exchange ideas and will
                              areas other than the economic if there is no
                                                                                           discuss many other matters besides business
                              spirit of mutual support. Often, there is
                              disgruntlement about having to pay for other
                              group members, which causes dissatisfaction
                              2011-01-10          Empowerment through Microcredit in Sierra Leone (BMZ/KfW) – POVNET Task Team on Empowerment   /8
                              In reality, most loan groups only discuss                    difficult for donors and also explains the

                              business matters and it cannot be assumed                    initial relative focus on financial aspects of
                              that financial assistance for a defaulting group             the microfinance sector. However, the
                              member is motivated by solidarity alone.                     problems have been acknowledged by donors
                              Perhaps encouraging group solidarity is a key                and will be tackled in the second programme
                              factor     for      supporting      non-material             phase of MITAF.
                              empowerment processes.
                                                                                           Overall, both women are happy with their
                                                                                           loan as it has enabled them to build up their
                                 There is still significant potential for improvement      material wealth and security and has had
                                                                                           positive repercussion on relations both within
                                                                                           and outside of the household. Auntie Jeneba
                              Finally, it must be understood that                          is now able to invest in her daughter’s
                              microcredit is no magic bullet for achieving                 university education in the hope that her
                              empowerment, and according to Cecilia,                       daughter will be able to care for her in the
                              “microcredit is viewed as one big tool to                    future, and advises her group members not go
                              support empowerment of women in Sierra                       to another MFI because she has gained so
                              Leone but this must be accompanied by other                  much from LAPO loans.
                              tools.” The art is in knowing where
                              microcredit finds itself in the grand scheme of              Ramattu also plans to invest in her children’s
                              things and where it has its niche in the Sierra              education, as well as expand her business and
                              Leonean context.                                             build a house. Although her plans have not
                                                                                           changed since receiving credit, she thinks that
                              Summing it up from a clients perspective, it                 her chances of realising these plans are now
                              can be said that microcredit can lead to                     better. She also believes that every woman in
                              increased material security among clients,                   Sierra Leone should be able to work, have her
                              which often results in a higher degree of                    own business and have access to education
                              independence and respect. Still, such positive               because “when women advance, their homes
                              developments may go hand in hand with                        advance.”
                              potentially disempowering effects such as a
                              higher financial burden, tension within the
                              household and, in the case of less financially
                              successful loans, high repayment pressure. In
                              order to maximise empowerment potential,
                              donors must support lending institutions in
                              identifying suitable clients at the right point
                              in time; providing financial products
                              appropriate for the client’s situation; and
                              assisting clients in gaining the necessary
                              skills and know-how in order to use their loan
                              successfully. Within this process, it should                 Sources
                              also be ensured that group dynamics retain an
                                                                                           SLANGO (2007): Shadow Report of Sierra Leone’s Initial, Second,
                              element of support and solidarity, rather than               Third, Fourth and Fifth Report on the Implementation of the
                              amounting to excessive repayment pressure.                   Convention on the Elimination of All Forms of Discrimination
                                                                                           Against Women (CEDAW).
                                                                                           UNDP (2009): Human Development Report 2009 Sierra Leone. The
                              Even if there are many pre-conditions for a                  Human Development Index – Going Beyond Income.
                              successful microcredit and many things have                  E.html. (20.07.2010)
                              to do with the clients starting point, these key             UNDP (2007): Sierra Leone Human Development Report 2007.
                                                                                           UNDAF (2007): Sierra Leone. United Nations Common Country
                              aspects can be facilitated by donors. Given                  Assessment.
                              the very difficult environment of a post-                    SLE (2010): Economic Empowerment of Women through
                                                                                           Microfinance. The Case of the “Microfinance Investment and
                              conflict country with low levels of trust and a              Technical Assistance Facility” (MITAF) in Sierra Leone.
                              until recent time virtually non-existent micro-              Commissioned by KfW Entwicklungsbank. SLE Publication Series –
                                                                                           S243 (forthcoming)
                              finance sector, this becomes even more
                              2011-02-14          Empowerment through Microcredit in Sierra Leone (BMZ/KfW) – POVNET Task Team on Empowerment             /9

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