Yashua Abubakar Dikkwa’s poultry business collapsed in 2017, leaving the 43-year-old mother of six anxious about being able to pay her children’s school fees. “I didn’t have the business knowledge, this is where I put the blame. When the business fell through I thought I had lost it all”. Dikkwa spent months at home unemployed. In September 2018, she joined the FAO’s savings and loan association in Maiduguri, and by October, requested her first loan. NGN 10 000 (USD 30) was all she needed to start a food business. “I have been selling fried yam, jollof rice and kunu (local grain based custard)”. Dikka now makes a weekly profit averaging NGN 4 000-5 000 (USD 12-15) and fully paid back the initial loan. “Now I can send my children to school and I’m even able to support my neighbour’s children”, she shared.
In 2018, more than 72 savings and loan associations were formed by FAO in the North-East. Altogether, the groups have funded 800 microbusinesses from a total of 900 loans dispersed. Comprising about 1 900 people, membership is almost split evenly between the genders. The associations, who have trained business development facilitators and who meet biweekly, also received training on entrepreneurship and bookkeeping.
Financial services, both formal and informal, have been severely uprooted by the decade-long crisis in northeastern Nigeria. At the village level, many of these activities were dissolved as households were pushed off ancestral lands and forced to abandon livelihoods and traditional schemes like the adashe, an informal village savings club practiced for generations.
Zainab Ibrahim lost her husband five years ago. His death left the 42-year-old widow and her two school-aged children impoverished. Ibrahim said she found it difficult to meet even the most basic of needs and her children’s nutrition suffered. Shortly after joining FAO’s savings and loan association, Ibrahim requested a loan of NGN 7 000 (USD 20). She invested in fruit, vegetable and spice selling and makes a profit of over NGN 3 000 (USD 10) every week. “This has changed my life. My kids are doing much better. The other day I bought my son new school uniforms and my daughter received new schoolbooks. I am proud I was able to do this, even though I am a widow”.
25-year-old shopkeeper and father of five, Salisu Momodu joined the Dawa savings and loan association in October 2018. From a store in Gungolong, a small village a few kilometers outside of Maiduguri, he sells food items. “I had this business for a few years but it wasn’t this big until I collected NGN 10 000 (USD 30). “With the money I am making a weekly profit of more than NGN 2 500 and I have used it to make little improvements to my shop”. Momodu said he was very excited about the savings and loan association because it allowed him to expand his shed and build a shade for his customers.
FAO’s savings and loan associations in northeastern Nigeria are supported by Norway and the European Union. Though only active in Borno State, FAO plans to extend this model across Adamawa and Yobe, and is open to partnerships to boost access to small loans and financial literacy among households in need. FAO’s promotion of the savings and loan association approach in Nigeria is embedded in the caisses de résilience (CdR), an integrated community-centred approach, linking social, technical and financial elements of livelihood support in a mutually reinforcing way. Through CdR, FAO aims to enable communities and groups to diversify and accumulate assets while leveraging their existing capacities to better manage risks and shocks during crises.
Some key facts regarding FAO’s savings and loan association approach are as follows:
- These associations are voluntary, self-selecting community-based groups that save money together. Small loans to start income-generating activities can be accessed for a fee. After the end of an agreed cycle, the total savings and profits generated on loans are typically shared among members. The concept has an in-built social insurance fund which members utilize in cases of personal emergencies such as death or injury, or in the development of joint ventures.
- Women and men are targeted equally, and include internally displaced people, returnees and members of host communities across Adamawa, Borno and Yobe States.
- Savings and loan associations offer the following three main benefits to members: (i) business management training; (ii) individual and group livelihood project development; and (iii) group financial services (lending).
- Benefits of savings and loan associations in northeastern Nigeria are as follows: (i) empower communities to initiate and manage their own development processes; (ii) effective in increasing household livelihood security (assets, options and welfare); (iii) boost household and community ownership and participation, resulting in higher levels of sustainability and continuity; (iv) enhance social cohesion, and build social capital among members while reducing dependency on humanitarian assistance; and (v) an effective way of assessing community member vulnerability status, capacities and abilities.
Source : Fao
