Monthly Archives: July 2011

Hope in a terrible situation: Anita Amenuveve

“I really didn’t want it to be this way. I just feel lost now, and I’m really confused about what to do.”

— Anita Amenuveve

(This is the second in a serious of interviews I am doing with some of the microfinance borrowers I am working with here in Ghana. This story is particularly mindblowing for me because she is only two years younger than me. The fact that she attacks life with so much drive and passion despite her hardship shows the true spirit of a Ghanaian. One of my fellow volunteers commented, “She’s just a little girl.” That may be true, but she shows the heart of someone much more mature).

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Barely a teenager adult, Anita Amenuveve was stuck with the hardest crossroads of her short life. Having come from a family of eight children supported by peasant farmer parents, Anita was in a situation where food and money was already scarce. But now there was another mouth to feed.

During junior high school at the age of 13, Anita got pregnant. With not enough provisions for eight, adding a ninth child  to feed, clothe, and house was not an option for Anita’s parents. So they made her leave the house and live with her uncle in the neighboring village where the father of her child also lived. In Ghana, if a young man gets a young woman pregnant, as a social formality the two must marry. Anita eventually moved in with the 24 year old father, a peasant farmer barely able to support himself, let alone a wife and an infant.

Anita gave birth to Caleb in February 2011. Caring for the baby took up too much time, so she had to drop out of school. Anita knew that in order to support her son, she could not rely on the meager provisions her husband could provide. Anita started to work for a peanut seller in the village, earning a commission on every small bag of peanuts that she sold.

When VEG came to her village, she attended some of the initial prospective borrower meetings. Encouraged by other women who were taking out loans, Anita applied and was accepted for a loan of 50 cedis (about $33 or €50). She is using the money bit by bit, making sure every piece of it is invested properly. Anita has been able to start her own business selling raw peanuts door to door in the village, using the money from the loan to buy a large supply of peanuts. Each day, Anita is able to sell about 30 small bags for 0.20 cedis each. She plans to roast many of the excess peanuts, storing them until peanut season is over. At that time, the price of peanuts will rise considerably, netting her a much better profit than she can earn right now (lack of schooling does not mean lack of a sharp mind).

Anita goes hungry many nights. She eats at her uncle’s house when she can, but he has many children so he cannot always provide for her. Meals from her husband are few and far between, but sometimes his parents give them a little help. With the new money she is making from her peanut business, Anita hopes to create a more stable eating situation for Caleb and herself.

Anita desperately wants to return to school, but she has no money to pay for it (only primary education is free in Ghana). She must save the profits from her peanut business in order to have enough money for tuition once Caleb is old enough to leave her side. She talks of “being somebody” when she is older, and she says an education is the only way to achieve that goal. Her dream is to work in a Ghanaian bank and be able to provide her son with a great lifestyle. At age 15, she is working hard to support herself, and doing an amazing job of it.

Even though she is in a horrible situation, Anita has been able to use her microloan to start herself on a path towards success and a better life. Just another case of microfinance giving unfortunate situations a little bit of hope.

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The first interview: Edith Worwornyo

(Note: I am working on a series of interviews with the people I meet in Ghana. Women like Edith have used microfinance to enhance their quality of life, even if it has been in the smallest way. I’ll be posting a few of the stories as I get the chance to interview more people. Here’s Edith Worwornyo’s story.)

Edith Worwornyo was born in the village of Adaklu Helkape. DSC01688
Her parents sent her to junior high school in Accra, where she successfully graduated. With ambitions of a higher level of education, Edith enrolled in secondary (or high) school. After a year, however, Edith got pregnant and had to drop out of school. Her parents were not willing to support both Edith and the child, so Edith was forced to start trying to make a living. She moved back to her The father of the child to give more than occasional money for child support, so Edith had to find a way to make enough money to feed both herself and her daughter.

It was a rough time for Edith and her daughter Ester. Their first “home” was a badly made wooden shed. Any time that it rained, water would come streaming into the house, making conditions very unpleasant.

To make some money, Edith first started working at her sister’s food stand. But Edith had big plans for herself, so she eventually started her own business making meat pies on the side of the street. She sold to schoolchildren passing by in the morning before school and in the evening time after school. After buying meat, flour, and oil from local sources, she fried up the flour in little balls with meat inside. Business was good enough that she was soon able to move out of the shed and into a better made structure on the other side of the street. The roof of the new house does not leak even in the harshest of storms.

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When Village Exchange Ghana (VEG) came to her village and talked about microfinance opportunities for local entrepreneurs, Edith was excited for the chance to expand her street side food business. Her application was quickly approved by VEG, and after four weeks of consistent savings, Edith was given a loan of 150 Ghana cedis (about $100 USD or €75). She used the loan to start a new element to her business: selling cooked rice and beans. Edith bought the beans, rice, and oil that she needed in bulk in order to create a larger profit margin. Many people do not like meat pies, so by diversifying her products, she can attract new customers. Without the loan, she would not have been to expand her business.

The future looks bright for Edith. The Ghanaian Transportation Authority will soon pave the road that passes through her village. This path will become a major route from Ho to Accra (two main Ghanaian cities), so there will be a large increase of traffic flowing through the village. Edith plans to capitalize on this flow of new potential customers, marketing her food to travelers.

With this increase in customers, Edith hopes to be able to expand even further. She plans to take out a second loan with VEG once the first is repaid. She wants to eventually start buying supplies to make banku and fufu, Ghanaian food staples made out of corn, yam, and cassava. Edith learned how to make these foods from a short time she spent working in her sister’s business. These foods are very popular with Ghanaians, so she hopes she will be able to offer some kind of food to even the pickiest eaters.

In the long term, Edith wants to be able to hire a few employees to help her make all of the food. As long as the volume of customers is high, Edith should be able to achieve her goal. She works hard, but it all would not be possible without continued financial support through microfinance loans.

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Ada-who? (adventure at the beach: Ghana style)

Don’t worry, it’s not all work and no play here in Ghana. As with any other job, you are free to do whatever you would like during the weekends. And since I happen to be in Ghana, that free time will of course involve exploring this beautiful country.

Our destination this past weekend was the small port town of Ada-foah. Ghana has a huge coastline, so if you were looking just to sit on a beach, there are plenty of options to choose from. But Ada-foah was special because of its amazing location: it overlooks the spot where the Volta River empties out in the Atlantic Ocean.

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The meeting of these two tremendous bodies of water makes for an entertaining water show. Currents clash from each side, making the water twist and tumble, creating wave shapes I have never seen in my life.

Our hotel (if you would even call it that) was located on the small sliver of land that separates the final stretches of the Volta River from the Atlantic Ocean. You could literally walk from riverside to the ocean in less than two minutes.

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The “hotel” was just a few reed huts spread out on the beach. The floors are no different than the outside: it’s all sand. And the rooms themselves weren’t much to gawk at. A bedframe, a mattress, a mosquito bed net, and nothing else. There weren’t even any sheets for the bed, and continued pestering of the staff for some led absolutely nowhere. But we only paid $8 per night per head, so I guess we can’t expect too much. We didn’t spend too much time in the hut, so we just ignored it.

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The beach was wonderful, well both of them. It was fun to go read a book by the ocean, and then walk over to the river to jump in the water. The ocean is too rough to swim in because of its super strong riptides, but the Volta makes for some great “swimming.” Take the word swimming lightly, because the water is so shallow along the coast that it hardly reaches your knees.

The guidebooks give plenty of warning about parasites that live in fresh water. The main one to watch out for is the particularly nasty bilharzia. The microscopic parasites live primarily in snail shells in fresh water. When you wade past them, the parasites can dissolve into your skin. They then make their way to your liver, where they reproduce endlessly for the rest of their lives. It is easy to treat, but unfortunately you don’t usually feel any symptoms until six weeks after exposure.

The local Ghanaian guys at the hotel told us that the water was “bilharzia-free” because the parasites can’t live in places where fresh river water is mixed with salt water from the ocean. It is hard to know how true their information is, but we saw plenty of both Ghanaians and foreigners enjoying the water, so we weren’t too stressed about getting infected. The water was too nice to resist anyway.

On Saturday evening, we took a walk down to the very edge where the water meets the ocean. There we ran into a school group from Accra celebrating their end of exams. They had come to enjoy the beach, and as one girl told us, “We are required to have fun.”

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A few of the girls from the group started to talk to us as we walked to the hotel. I was pleased to find that one of the girls planned to go to college and eventually become a doctor. So many Ghanaian girls do not develop the self-esteem or confidence to try to make it to the top of their chosen field. Most Ghanaian girls would just want to become nurses, but this girl had her mind set on the top. I love that the new generation is starting to break the pattern of gender segregated workplaces.

I think that was my longest post yet. If you skipped to the end and just want the summary: the whole weekend was extremely relaxing and interesting. Just chilling Ghana style.

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Village Visit

Last week, I had the amazing opportunity to visit three villages in rural areas around the city of Ho. The visit was part of the weekly excursion for the purpose of collecting repayments for loans. It was eye opening to have contact with the borrowers and finally see microfinance at its most basic level. It is easy to watch people in the office talk about different borrowers and analyze repayment data, but when you see the process of collecting repayments occur in real life, it is a totally different experience.

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The partners (borrowers) in each village are organized into a single group. They are responsible for electing a leader to look over the finances of the group as a whole. If one group member defaults on their loan, the others are responsible for pressuring the defaulting member to make the repayment. Meanwhile, the other members are required to pool money to pay for that week’s repayment, with the promise that they will get paid back over the next week.

The whole process of collecting repayments in each village only takes about 15 minutes. Felix, the credit officer, collects money from each partner and enters the information in both VEG’s books and the group’s books. Everyone gets a copy of the information so everyone knows that they are not being cheated. The partners are encouraged to give money towards their savings accounts in addition to the money they give for repayments. This solidifies partners’ habits of maintaining financial health.

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The rest of the visit is used to educate the borrowers on useful business and social topics that are relevant to them. Kofi, the social mission officer, gives a 45 minute talk on topics ranging from credit management to proper hand washing techniques (directed at people who have food sales businesses). This is the part that makes VEG a social microfinance institution. The organization tries to teach people the skills they need for both their businesses and their society to grow and expand, allowing them to effectively pull themselves out of poverty. This isn’t empty money loaning; this is confronting the problem of poverty in an ethical and compassionate way.

The women were grateful to see the volunteers come with Kofi and Felix to see their village. The loans have really helped them expand their businesses, so they are happy there are people willing to support organizations like VEG. The women were willing to answer any and all questions we had about their enterprises and the challenges they faced as entrepreneurs. It was hard to not to smile at their overwhelming kindness.

We will be going again to the villages on Thursday to collect even more repayments. Also, I am heading an effort to interview many of the partners in depth so VEG can post stories about their clients on different websites that solicit donations from online users (very much like Kiva, but for smaller organizations). It’s fun to combine some of the journalism skills with knowledge about microfinance. Should be a fun, little side project. I’ll post the first one up in a little bit.

This current cycle of loans is the first loan for all of these women, so many are just using the money to expand businesses that they already have. Many have plans to open up new businesses with future loans. This drive and vision of success is a great motivator for these women. They really see how microfinance can help them improve their quality of life.

As long as they are happy and are committed to the process, I’m happy helping out VEG.

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Keeping people honest: collateral in microfinance

~Note: This was supposed to be a “Before” post, but I never got around to posting it. I’ll be posting about my visit to the villages around Ho and our weekend beach adventure in a little bit. Meanwhile, enjoy this little story~

How do you make sure people pay back their loans?

The first time I tried to talk to my dad about microfinance, it didn’t go so well. We had sat down at a restaurant, just the two of us, for what I thought would be a nice relaxing meal (if you’re reading this Dad, I’m talking about Gatlinburg). Somewhere along the line, conversation drifted over to stuff I was working on and inevitably, microfinance came up. He had never fully understood the topic, so I explained the basics to him: impoverished people get access to credit, use the money to expand their businesses, and repay the money over time.

At that time, I thought that there was no way to argue against it. How could you have anything negative to say over helping people escape from poverty? My dad being…..well, my dad, he was able to immediately see a serious problem. What was the incentive for borrowers to repay their loans?

His question was spot-on, though because I wasn’t ready to admit it at first, it led to a lengthy debate. But I eventually realized he did have a good point. In a first world nation, if borrowers don’t pay back their loans on time, the bank can easily repossess their car or other belongings. But in third world nations, everything works a little differently. People don’t have many possessions, especially if they are in a position when they need a microloan. And the few possessions they have are often their only avenues to make money. For example, a family might rely on the profits earned from selling the milk of their only cow. You can’t ethically take away that cow when it is the only sustainable source of income for the family.

N'Dama cattle, a breed typical to Ghana

But on the flip side, you have to have some way of making sure people pay their loans back. If there’s no punishment, there’s no incentive. So how do we balance making sure loans are paid back with ethical considerations? We are trying to help people after all, not run them into debt.

The best way that microfinance institutions have found for keeping borrowers honest is making the borrower earn the lender’s trust. Borrowers will only receive small amounts of money at first, maybe $100-200, that has to be paid back in a short amount of time. When the borrower can show they are committed to repaying the loan, then they can apply for larger and larger loans. The borrower wants to get another loan, so the lender can use that incentive to keep the repayments flowing back.

And that strategy has been pretty effective. It is the way Kiva.org has kept their repayment rate at over 98%. Makes you think twice about how “risky” you might think loaning to people in third world nations might be.

Borrowers will pay their loans back. They just need the right incentives. And I need to stop arguing with my dad. Those Yale grads are smarter than you think.

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The Office

Yesterday, I got my first taste of a full day in the VEG (Village Exchange Ghana) office in downtown Ho. The office is shared by three sections: reproductive health and women’s empowerment education, microfinance, and a bead making and batiking (cloth dying and sewing) business.

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Even though each operation has their own separate part of the office, they are connected in every way (or are supposed to be, but more about that later). VEG focuses on helping disadvantaged women, so each of these areas plays a part in empowering them and pulling them out of poverty.

The young women are educated on the perils of teenage pregnancy and the prevention of STD’s, especially HIV. To allow the women to become even more independent, VEG can provide jobs to these women in the areas of batiking and bead making. Once they are financially self-sufficient, they gain self-esteem, becoming more proud of their purpose in life. No longer do they have to chase after men in order to put food on their children’s plates. Once they have useful vocational skills, the microfinance section can help them start their own businesses or expand already existing ones.

In theory, everyone would work together with the same people, passing them along to the next section of VEG as needed. But of course, this view is not universally accepted. In any organization, it is often hard to see the big picture. It is no different in Ghana. Hopefully, however, we can help pull everyone back together on the same page. You can’t have one piece without the other.

On Thursday, a few of us will go with Kofi, the social mission director, and Felix, the loan officer, to three villages just outside Ho. Every Thursday is repayment day for outstanding loans, so a trip must be made to each group in the villages to collect money from each partner that has taken out a loan. Felix will lead the collections as Kofi will give a presentation on useful business skills for entrepreneurs. This is a new system that VEG has just implemented this year, but hopefully it will increase the success of the small businesses that receive the loans.

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A warm welcome to Ho

July 18th, 2011

Today was filled with excitement. We got an early start, meeting up with Christiane, the founder of Village Exchange International/Ghana, and Felix, the main loan officer, in Accra at 8am. The ride to Ho took 3 hours, but once we entered the Volta Region, the views helped the time pass quickly. The land is lush and full of green at this time of year because the first rainy season is just ending. We passed plenty of palm trees, the nuts from which are sold in the market and used for traditional Ghanaian dishes like palm nut soup (I got to try it last night, and it was very spicy but delicious).

When we arrived in Ho, we went first to the VEG (Village Exchange Ghana) house located on the outskirts of town. The house is wonderful, a single floor building with four bedrooms, each housing one or two volunteers. There is plentiful electricity, and I was happily surprised to see that most homes in the area have been fully electrified. There is also plenty of water going to the house, but that is an uncommon luxury for Ho. Christiane talked of how there are often shortages of water, and the water will suddenly turn off for a day or two. She installed a large 300 liter storage tank that can be used as reserve during this time, so we should never be without water to shower and wash dishes as long as we conserve it properly.

There are three other volunteers staying in the house. One is Harriet, a British girl in her early 20’s and a college undergrad studying in Scotland. The other two are a father and son who are Spaniards but now live in Italy. The son is my age (17), so it will be a lot of fun to have a guy to hang out with for the three weeks. His father is an economics professor, so hopefully I’ll have time to sit down and pick his brain about game theory or something else cool like that.

After unpacking our stuff in our room, we met two Ghanaians who help out around the house, doing some cooking and cleaning. One of them has a very bright daughter, Wyram, who works with VEG making bead necklaces for the fair trade clothing line.

We had a nice Ghanaian lunch when the other volunteers came back from the office, and had the chance to introduce ourselves and get to know each other. It’s amazing how food can bring people together. Everyone is so friendly that it is hard not to smile wide and often.

Christiane then took all of us back to the office (a tight squeeze to fit 7 of us in a pickup truck, but we managed just fine). The office is located right near the city center. Both the reproductive health services and microfinance operations are housed there, as well as spaces for batiking (cloth dying) and seamstresses (who sew that cloth into clothes and bags to be exported worldwide). There are about 20 Ghanaians who work for the organization in all areas. It will be nice to work side by side with Ghanaian people. They know what their country needs most, and how to best serve other Ghanaians. And they are the most wonderfully friendly people in the world, so we’re sure to have a good time.

We got a nice tour of the office as well as a tour of town from Wyram. While walking around town, we walked through the main market. Lucky for us, it was market day (it happens every 4 days), so the market was filled with people from villages all over the area who had come to sell their goods. You could buy anything your heart desired, from cassava and yams (two food staples), to toothbrushes and underwear. The whole market is divided into different sections, so it’s (theoretically) easy to find exactly what you need. Of course that’s assuming don’t get lost in the maze of fruit stands and other shops.

Since it was our first day in town, we didn’t start any serious projects. We’ll save that for tomorrow. Instead we were able to go back to the house with everyone, wash up, and go out for a drink. There aren’t really any bars in Ghana. The equivalent is a lawn on the side of the street lined with tables and chairs. At the one we went to, there was even a projector with some Nigerian horror movies playing (not the best acting I’ve ever seen, to say the least). We returned for a quick dinner with everyone, and then it was off to bed.

Ghana is turning out to be quite a lovely country. The people are a joy to be around, the food is tasty, and I have the chance to volunteer for a great cause. These next few weeks are going to go fast. I can’t wait to see what’s in store for me tomorrow. I’m ready to start delving hands-on into microfinance.

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