USAID / Guinea - Success Stories

C3 Reaching the Rural Poor with Micro-credit: A sustainable village-based program offers micro-credit to those most in need

Experience has shown that properly designed income-generating activities support rational natural resource management. However, development of these activities in the rural areas in Guinea has been constrained by the lack of access to credit by resource-poor villagers. To address the problem, the Expanded Natural Resource Management (ENRM) activity has developed a network of mutual Community Savings and Loans Associations called "C3.."

Each C3 represents a savings and loan association established in targeted rural areas by members of the villages themselves, with the initial technical assistance provided by the ENRM activity. The objective of this approach is to increase the ability and motivation of rural people to mobilize their own resources for their own economic well being. The credit provided by the C3 is primarily for individuals and village-based groups involved in agricultural production, transformation and commercialization, and off-farm micro-enterprise activities.

The C3 approach develops a sense of ownership among participating villagers and enhances long-term sustainability. It starts with a group of villagers who pool their savings to create a loan fund that members of the group can borrow to finance their income-generating activities.

The local community is responsible for providing an existing building structure to house the C3. Representatives of the community then work together with the project agents on the renovation the building to ensure adequate security (metal doors and iron bars on windows), and to convey the right image. Given the level of poverty in most project intervention zones, the project has to underwrite 25-45% of the renovation costs.

The C3 is managed by a committee, which is democratically elected by the members of the group. Each C3 has two cashiers who are selected by the General Assembly. The by-laws and statutes for the C3, which have been developed with the assistance of the project, give detailed descriptions of the roles and responsibilities of not only the committee members and the cashier but also of the general assembly and individual members of the C3. The project agents train the management committee and the cashiers in financial management, bookkeeping, literacy, and numeracy to develop and strengthen their capacity in managing the savings and loan accounts.

In order to ensure the participation of women in C3 activities, the project has encouraged the local communities to include women as members of the management committees. Female members make up 38% of all memberships of the C3 network as of September 30, 2001.

The C3 program has been well received by the rural population-after one year of operation, 28 community savings and loans associations have been created and are operational. As of September 30, 2001, the C3 network had 2,565 members who had mobilized a total of $110,534. The program has disbursed 1,154 group and individual loans with a total value of $44,912. With a reimbursement rate of 98%, the program is proving the credit-worthiness of its poor rural clients while at the same time helping them to buy improved seeds, to market and commercialize their produce and to establish micro-enterprises such as soap making, cloth dyeing, beekeeping, improved wood burning stove construction and petty commerce. By helping resource-poor villagers increase their family income through access to credit and the development of productive activities, the C3 network contributes to improved food security and poverty alleviation, helping reduce pressure on the natural resource base in the rural areas.

Mrs. Damayé Camara, from Manikaya, has become a member of the C3 in her neighborhood and received a loan of $70 in the spring of 2001. The loan allowed Damayé Camara to purchase inputs necessary to product peanuts on a small piece of land (about .5 ha.) near her home. Sales from her peanut harvest generated over $500 in profits, permitting her to repay her loan to the C3 and providing her with $100 additional working capital from the C3 that she needed to initiate a new off-farm business activity-selling metal kitchen utensils to other women in her neighborhood at the weekly market. Through the success of the on-farm and off-farm income generating activities, Mrs. Camara has been able to increase her working capital to $300. She has also been able to save $175 in less than six months, which has allowed her to make a larger contribution to her family income.

Mr. Issiaga Dramé, from Kolente Center received a loan with the C3 to buy inputs such as improved seeds to produce groundnuts and rice. After successfully repaying his loan, he was also able to double the amount in his savings account while at the same time undertake certain activities he'd always wanted to do for his household-suddenly he had enough income.

Madame Thierno Djiba Sysavane, a restaurant owner in the village of Linsan II, had been completely discouraged about undertaking micro-enterprise activities when she lost her money due to the closing of a French government-sponsored micro-finance institution called Mutual Credit. When a C3 opened in her village she was hesitant at first but finally decided to become a member, opening a passbook savings account. With her restaurant business, Madame Sysavane has been able to save a total of $2,300 in less than 5 months and she has been able to make substantially larger contributions to her household income. Her membership at the C3 also allowed her to double her revolving funds to a total of $1,500, which in turn enabled her to expand her activities and hire three new employees for her restaurant.

USAID/ Guinea- Success Stories