In Ghanaian communities such as those served by the Yonso Project, there are countless women who run small businesses selling goods that range from staple foods to textiles to soap and beauty products. Whether their storefront is a stall in a market square or simply a blanket spread on the ground near a busy street, female vendors are often the only source of income for a family. However, small entrepreneurs are typically unable to secure capital, as banks in the area charge prohibitively high interest rates. The Yonso Project provides female entrepreneurs in our partner communities with small extensions of credit called microloans that allow them to start or grow their own enterprises. The YP has issued a total of over $46,000 in capital to over 400 individual borrowers since the program’s inception in 2007, with a consistent, extremely high repayment rate of 99.9%.
The concept of microlending was pioneered by the visionary Grameen Bank in Bangladesh but are now used by hundreds of nonprofit and for-profit organizations across the developing world. The Yonso Project’s model is to issue microloans to a group of five women, beginning at $50 per person. The loans are due within a few months of the date of issue. After a client group has successfully repaid a loan, they become eligible for a larger one at a lower interest rate. We re-loan the money that was repaid, thus creating more client groups and expanding the program’s reach. Because almost 100% of our clients fully repay their loans on time, we are able to continuously re-lend capital to make new loans. As a result, 73% of all funds issued by the start of 2010 had been previously issued in 2009. Moreover, we carefully screen loan applicants and provide business training to lenders to maximize the impact the loan can have on their businesses.
In 2009, the YP’s microlending volume grew by over 200% from the previous year. We expanded our services to two additional towns and issued 337 loans for a total amount of $23,199 in loan capital in 2009. Currently, we have issued more than 400 women a loan and over $40,000 worth of loans. While the pace of microlending growth has been exciting, the increased demand has posed challenges in terms of both capitalization and logistics. We do not currently have the funds to meet the borrowing needs of women in our partner communities. To that end, our Private Investment Program began in 2009 with an initial investment of $5000 from an individual in the US. To address the logistical challenge posed by our growth, the YP Ghana staff has been working in collaboration with a US Peace Corps volunteer stationed in our communities. Together, they have reorganized our microlending books and our overall financial accounting systems to accommodate the program’s rapid growth.
In the coming year, we hope to further expand our microfinance services. The Yonso Project is in the process of developing a savings program that will allow borrowers a convenient way to budget and save. Saving can be difficult for individuals in rural African communities; personal bank accounts are a rarity, and keeping a large stash of unsecured cash in one’s home is asking for trouble. We will also be working to incorporate health insurance into our lending package in the coming year. In five years time, we hope to have expanded our client volume to 1,000 active borrowers, enabling us to offer a wider variety of products and services and to better partner with other microfinance organizations.
We are now actively looking for private investors in order to grow our operating capacity and serve more clients in the surrounding rural communities. If you are looking for a socially conscious investment that will provide real benefits to real people, consider putting your money into our microfinance program. Please refer to the detailed investment information packet available here for the program’s financials in the past, investment details and program information. For more details, please contact us at firstname.lastname@example.org.