C… is for Credit!

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In this series of short blogs, we’re working through the alphabet to highlight the approaches – some more surprising than others – that we take at CHIPS to grassroots peacemaking!

In West Africa, it is still commonplace for poor rural villagers to go without any access to financial services.

However, right across the continent, savings and loan groups have been springing up in recent years and Ghana is no exception. One major international humanitarian organisation alone counts almost six million members among its groups in Africa – the majority of them women.

CHIPS savings and loans groups first emerged from our animal rearing project in 2013 when several women in the village of Lungni came together seeking ways to save and pool their hard-earned money.

Today the groups, locally known as susu, represent a successful and growing area of activity and one of our six key peacemaking projects in Ghana.

Practical peacemaking

For CHIPS, the building of relationships that the susu encourage is hugely important in a peacemaking context.

The groups bring women together from both sides of the ethnic conflict and help them to form new, positive friendships and practical relationships across villages and across opposing tribes in a society where 30 years of inter-ethnic conflict and tension has destroyed trust.

As Andrew, CHIPS Co-Director of Development, says: “Saving your money together with family and friends is one thing but having the trust to save together with former enemies is quite another”, he says. “I find the stories of the groups both inspiring and deeply challenging.”

Mutual support

There are currently six CHIPS savings and loan groups with around 450 members in total, and the CHIPS team provides a simple but effective infrastructure to make things happen.

Every week the members each bring their savings to the group, which the CHIPS team collects together and safely locks away, with the records carefully updated.

By following a regular savings plan, members are able to build up their emergency cash reserves, and they can also apply for small loans from the pooled resources when they need them.

Repayment rates are exceptionally good – perhaps in part because in these villages, everyone knows each other! The concept is similar to what we know in the UK as credit unions, and the expertise of one of our Ghana board members, who has founded a number of credit unions in the country, has been very useful.

Desmond Mpabe, our Ghana team leader, observes: “It’s fascinating to watch the women from the savings and loans groups arguing over who should be allowed to take their money first, but in the end a consensus is reached – and each person saves happily and returns home satisfied!”

CHIPS savings and loan groups in numbers

  • 450 members in 6 groups across 6 villages
  • GH¢229,553.10 (over £31,000) saved since 2013
  • 902 loans made worth GH¢103,436.50 (over £14,000)

Transforming lives

“We have seen peoples’ lives being changed through these groups,” says Desmond. Members save money and take loans for several reasons, he explains: “Many women have given testimonies of how they have been able to pay their medical bills and children’s school fees as a result.”

As well as education and medical costs, members often use the money to pay to purchase animals, to facilitate trade and to pay for family funeral costs. More generally, the money helps to reduce household exposure to financial shocks – for example when crops fail or unexpected expenditures arise.

Empowerment

In recent years, many villagers in the region, both male and female, had identified a need and opportunity for women to play a greater role in finance both at home and in village life.

The groups have made this a reality, empowering women and give them more control of their own lives and influence in their communities. As a result, their self-confidence and independence has improved – along with their leadership skills.

The project continues to expand, with new groups and members coming online and the CHIPS team providing training in areas such as bookkeeping, to allow groups to manage the process independently.

We’ve also come to realise that, while many members are successfully saving money, they may not always have enough money to trade as much as they’d like to with others. Recently, we supported two women by providing them with a larger loan so they can do more trade and build even stronger relationships for the future – and we expect this work to grow.

What better reasons to give credit its place in our A to Z of practical peacemaking?