USAID / Guinea - Success Stories

Micro-finance branch managers trained in conflict mitigation techniques are helping protect investments, and keeping repayment rates high.
Oumou Baldé is a branch manager par excellence-thanks to the training she received from PRIDE/Finance, a USAID-sponsored micro-finance institution (MFI), she is able to give good business advice, promote good relations and mitigate conflict among her business clients in Mamou, in Middle Guinea. "It's not easy to handle credit," says Madame Baldé. "It's up to the person who gives out the loan to really listen to the clients, and to read between the lines of what they're saying. You must make them responsible, explain the importance of taking out a loan, and motivate them to pay back the loan while still maintaining good relationships with them."

"Last week," says Madame Baldé, "a woman came into my office with the leader of her loan group to complain about a woman who traveled on their reimbursement day, and didn't pay her portion of the loan. They wanted to pay a taxi to go find her, so I said, 'Why don't you send her a message? If someone pays to go without knowing what the problem is, you'll be wasting money unnecessarily.' They decided to try to find her, and to cover for her payment until they knew what was wrong. Finally they located her, and found out that her loan money had been stolen from her house while she was working at the market, and she was too ashamed to face the others in her group so she went back to her village. There she was able to cultivate and sell rice-the only option she had to make money. The woman has now caught up financially, has paid back the members of her group, and is also paying back her loans. The group members said to me later, 'You were right-going to her village wasn't the answer. By calling her, we didn't spend our loan money, and we resolved the problem among us until she was able to catch up.'"

According to PRIDE/Finance Director Tidiane Barry, conflict resolution on the ground, particularly among clients receiving group loans, is a crucial factor in the success of the MFI. Says Barry, "Good conflict mitigation is directly linked to loan repayment, and is an important part of our strategy. It's very important for our managers to understand how a problem arose, and for clients to learn to be transparent in talking about problems when they arise."

PRIDE branch managers are chosen for their ability to communicate well, particularly with people in rural areas. They then undergo in-house and field training for four months in which they learn to listen to clients, make measured analyses of clients' business projects, and bring people toward finding their own solutions to problems. Branch managers learn how to help clients in rural areas escape from what Director Barry calls "the vicious cycle of poverty;" the good counsel they give not only helps to resolve immediate conflict among business entrepreneurs, but it can also help clients resolve other long-term social and economic problems.

PRIDE/Finance's current overall payback rate is 96%. In spite of suffering a number of setbacks in 2001 due to cross-border attacks in the Forest Region of Guinea, the MFI has stayed within its indicators set by USAID, and expects to be financially independent by December 2003. To ensure the MFI's continued success, conflict mitigation at all levels is essential.

Madame Baldé, whose latest branch repayment rates were 99%, says that her business entrepreneurs' financial connections are fluid, and that the clients themselves usually know what will work best in their situation. Her role is simply to guide them toward their own creative solutions to their problems. "We tell them, faced with this situation, what do you propose? If they don't come up with the solution that seems logical to us, we ask them to come up with another idea. In the end, the clients themselves will come up with the best solution."

USAID/ Guinea- Success Stories