GAWFA

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GAWFA
GAMBIA MICROFINANCE INDUSTRY
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Background
Benin
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HISTORICAL OVERVIEW OF THE MICROFINANCE SYSTEM IN
THE GAMBIA

• Prior to the adoption of the World Bank IMF
  supported Economic Recovery Programme, the basic
  trust of the Government policy towards rural
  finance was to provide cheap and readily
  available , agricultural inputs and credit to
  farmers. This was done primarily through the
  Gambia Comercial and Development bank (GCDB), the
  Indiginious Business Advisory Services (IBAS),
  the Agricultural Development bank (ADB), and the
  Gambia Cooperative Union (GCU). All of these
  Institutions were supported by funding from
  either the Government , and /or Multilateral
  Institutions (MLIs).
• Due to a vareity of reasons, including poor
  crops, malfeasance, inadequate credit approval
  and monitoring systems, little contact with
  the-end user, the perception that loans did not
  need to be repaid, and political interference
  9including the rural debt moratorium in 1982),
  most of these programmes had poor repayment
  records, and subsequently failed. Mainly as a
  results of these events, the

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• availability of credit to the rural sector
  contracted, with the ratio of rural credit to
  rural GDP declining from 30 40 in the early
  1980s to 7 - 8 in the 1990s. Gambias history
  of rural credit is therefore, not conducive to
  another supply led rural finance programme,
  particularly one which, in the eyes of the
  beneficiaries, will be associated with the
  Government or a parastatal organisation.
• Recognising that supply led intervention in rural
  credit has failed, and in line with a more open
  market policy, the government has changed its
  approach to rural financial services. Rather than
  being a provider of financial services itself, it
  is now concentrating on creating an enabling
  economic and regulatory environment in which
  independent rural finance institutions can
  flourish. To this end, the Central Bank of The
  Gambia (CBG) has now established a set of
  regulatory requirements under which rural credit
  institutions can operate, and various government
  departments (funded by external donors) and Non
  Governmental Organisations (NGOs), have started a
  variety of schemes. This has resulted in a
  multitude of small projects operating in all
  Divisions of the Country, which have achieved
  only a limited outreach and impact to date.

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DEMAND FOR MICRO CREDIT
As noted above, the provision of credit to the
agricultural sector has declined sharply from
levels existing in the early 1980s. As a rough
indicator of potential rural credit demand, to
return the availability of rural credit to the
level that was extended at that time (a medium of
35 of agricultural GDP) would require credit
availability totaling D230,000,000 per annum in
both short and long term credit facilities, based
on the statistics for 1994 ( the most recent that
are available). This far exceeds the total amount
of loans made by the commercial banking sector
for agricultural purposes (D 57,000,000 as at
30/6/1996). Based on these statistics, therefore,
there is an overall potential rural demand for
credit from the financial sector that is not
being met of D 173,000,000 per annum.
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CURRENT PROVIDERS OF MICROFINANCE SERVICES

• In the Gambia micro financial services are
  primarily supplied by the non bank financial
  sector,since the commercial banks maintain only
  three branches outside of the Greater Banjul
  region. Of these, the main providers of financial
  services in the rural areas are as follows
• Gambia Womens Finance Association (GAWFA)
• The VISACAs
• The Credit Unions

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THE ROLE OF MICROFINANCE
Micro finance should be a key component of any
comprehensive anti poverty strategy. It comes
toady as a powerful anti poverty instrument
broadening the role and impact credit has on
economic activities, especially on the poor.
Credit has been used in the past to finance
income generating activities, assists households
to get basic services like water sanitation and
home improvement and allow the private sector to
finance local public infrastructure.
Micro finance can target and have a profound
impact on the livelihoods of the poorest of the
poor because it encompasses all type of financial
services from deposit mobilization to savings and
credit in poor areas.
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Financial intermediation is the underlying
principle of micro finance. It is the process
that allows specific institutions (financial
intermediaries) to bring together supply and
demand of funds. The capital importance of
financial intermediation in steering the economic
process in a country was recognized more than two
decades ago. Since then, the role of savings and
credit in bringing about growth has been
demonstrated, together with the importance of
healthy and profitable financial institutions.
Micro finance calls for a fresh look at the
financial situation at the local level. Here the
MFIs, who are mostly NGOs, play a special role
as elements of local financial infrastructures
providing financial services to the poor and the
poorest. As micro finance institutions we should
first aim at developing our financial
infrastructure so that we can better serve the
poor.
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This calls for a national network-oriented
approach, which would enhance horizontal linkages
between banks and MFIs operating in the same
local financial network. MFIs face several intern
al and external challenges. Internal challenges
relate to the need to understand and
conceptualize micro finance further, especially
in relation to areas closely related to poverty
(e.g. peace-keeping, disaster mitigation,
reconstruction) and in areas critical to the
development process (e.g. environment empowerment
of women etc). Internal challenges relate also to
the need to strengthen the MFIs own capacity and
adapt procedures. External challenges relate to
the strengthening of cooperation between MFIs and
other Government projects involved in micro
finance or assisting MFIs involved in micro
finance, and also the development of public
awareness, about the use of micro finance to
fight unemployment and social exclusion.
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BACKGROUND OF GAWFA
Gambia Womens Finance Association (GAWFA) was
established in 1987 CORE BUSINESS Provision of
financial services to small and micro
entrepreneurs, low income women farmers and women
engaged in any economic activity.
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LEGAL STATUS

• Gambia Womens Finance Association is
• Registered under the companies Act 1955 and
  limited by guarantee
  
• Regulated and supervised by The Central
  Bank of The Gambia as a Non Bank Financial
  Institution (NBFI)
  
• Registered with the NGO Affairs as a National
  NGO.
  

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MISSION STATEMENT
To serve as a financial Intermediary to enhance
the Entrepreneurship development of women as a
means of alleviating their poverty. It also
serves as a vehicle for mainstreaming women in
National Development Processes.
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VISION
GAWFAs vision is the transformation of the
economic and social systems of the Gambia towards
an equitable distribution of resources and
power.
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OWNERSHIP
Owned by over 43,000 women members and the 23
founder members.

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OBJECTIVES

• To promote GAWFAs financial and operational self
  sufficiency
  
• To build GAWFAs human and material resource
  base
  
• To maintain a sound governance structure,
  organizational vision and culture reflecting the
  principles of service, sustainability and
  growth
• To implement a cost effective savings and credit
  programme for low income women in the rural and
  urban areas
  
• To enhance the competitiveness and profitability
  of enterprise operated by low income women
  entrepreneurs
  
• To advocate for the formulation of government
  policies and legislation which are favourable to
  women entrepreneurs and micro and small
  enterprises.

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COMPARATIVE ADVANTAGE

• Nationwide Coverage
• A loyal, stable customer base of over 43,000
  depositors and 20,000 borrowers.
  
• A highly qualified professional Board of
  Directors
  
• A highly qualified management team and staff
• A strong Organizational Culture built on values.

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ACHIEVEMENTS TO DATE

• Membership of more than 3500 village base womens
  groups and 3500 individual members.
  
• Provided financial services to more than 50,000
  women.
  
• Provided business advice and management training
  to more than 10,000 women
  
• Achieved both operational and financial
  self-sufficiency in 2001.
  
• Recognized as a leader in the Micro finance
  Industry in The Gambia .
  

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Portfolio by sector year 2002
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OPERATIONAL AND FINANCIAL SELF SUFFICIENCY
INDICATORS
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CUSTOMER SCREENING
1ST Loan Application Customer personal Detail
s are sought at account openings.
A very detailed interview is carried out to
establish the clients character.
Repeat customer records are available at the
touch of a button thus only a brief appraisal is
done to confirm status Quo.
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LOAN APPLICATION

• Simple to fill out
• Contain only relevant details about clients and
  their businesses
  
• standardized

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LAON APPRAISAL

• Take into account size of business or firm etc
• Savings level of the client
• Purpose of the loan
• Loan term
• Type of repayment preferred e.g. monthly or
  block
  
• Nature of the business/activity engaged in.

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LOAN ANALYSIS

• A simplified loan appraisal system
• Faster decision making process
• Analysis for repeat customers is mainly based on
  their past repayment records.
  

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LOAN APPROVAL

• Approval authority has been centralized for
  standardization and consistency
  
• This makes the decision on loans fairly
  consistent.
  

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LOAN DISBURSEMENT

• Undertaken by Credit Officers at door steps of
  clients Loan Disbursement
  
• Convenient and safer for the clients.

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LOAN TRACKING

• Tracking of all due loan installments
• Generate loan status reports.

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SAVINGS TRACKING

• Automatic calculation of interest due on savings
  deposits on a monthly basis
  
• Generate statements for individual savers.

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GAWFAs EXPERIENCE

• What Customers want
• Fast Loan approval
• Simple loan application
• Friendly Staff
• Continuous access
• Convenient repayment terms
• Reasonable interest rates
• Asset building financial procedures e.g. savings
• Knowledgeable staff
• Reputable institutions
• They want to be treated as clients and not
  passive recipients of credit
  
• Expert advices on basic business management
• Information on markets

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B. What Clients dont like

• Treated like beggars
• Dont like slow approval procedures
• Too high interest
• Dont like to be policed on how to invest their
  money
  
• Complicated loan application forms
• Dont want an Organization without a
  sustainability agenda

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COOPERATION FROM OTHER ORGANISATIONS
ICDF TAIWAN In July 1998 a memorandum of unders
tanding was signed between the International
Cooperation and Development Fund (ICDF) of the
Republic of China and The Gambia Womens Finance
Association (GAWFA) to provide the later with a
grant assistance of us110,000 to help the
Association build its capacity in three critical
areas. The areas covered under the grant assistan
ce was the construction of regional savings and
credit centers to help in the decentralisation
strategy, staff training and management
information systems. These areas covered by the I
CDF grant assistance were crucial to the survival
and sustainability of GAWFA at that period. The
support was received at the time when the
Organisation was relatively very young and
financially weak to carryout these necessary
investments.
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Under the grant GAWFA has been able to expand
rapidly into the rural areas of the Country due
to the establishment of these savings and credit
centers. The Organisation was also able to put in
place a computerised accounting system and a
savings management which had help greatly in
enhancing the timely production of management
reports. The investment in human resources throug
h training had also played a crucial role in
increasing staff productivity and moral. A number
of savings and credit officers had been trained
through the ICDF grant assistance as well as
middle level staff. GAWFA has continued to grow
and expand from 1998 largely due to the support
from the ICDF. Currently the organisation
operational self sufficiency stood at 146 as
30th June, 2003 compared to 30 on the 30th June,
1998. This has been made possible due to the
investment in training of staff, management
information systems and the establishment of
regional centers.
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AGENE FRANCAISE DE DEVELOPMENT AFD FRANCE

• In May 1999, the Government of the Gambia signed
  a grant agreement with the French Government
  through the Agree Francaise de Development (AFD)
  to the tune of 2.5 million French Francs to
  support the Gambia Government Poverty Alleviation
  Programme.
• This project had three components, namely
• Food Security
• Micro Credit
• Environment
• The Gambia Womens Finance Association was
  selected among other Organisations to implement
  the micro credit component which had three main
  areas.

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One component was to help build GAWFAs loan fund
so that we could make loans to larger number of
low income women. Another component was to help i
n paying direct operational costs of GAWFA
because at that time the organisation was not
fully sustaining. The third and final component w
as to complement the ICDF grant assistance to
financing the construction of more savings and
credit centers. All these had significantly
helped GAWFA in achieving the level of success it
has registered to date.
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WOMENS WORLD BANKING WWB - NEWYORK
This is an International not for profit NGO based
in Newyork USA. Its mission is to help building
and supporting women led organisation providng
micro finance services to poor and low income
mainly women clients. It has an affiliate network
of 43 Organisations in Africa, Latin America,
Asia and Eastern Europe. In January 2000, GAWFA b
enefited from the WWB Capitilisation facility
which is a grant of us350,000 given to
Affiliates meeting certain performance standards.
GAWFA was the 12th WWB Affiliate to meet these
set of performance standards in 1999 and rewarded
with this grant facility in 2000.
These funds are used mainly for lending to
clients and this has indeed help GAWFA built up
its capital base for lending
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CONCLUSIONS

• Clients want continuous access to finance on a
  long term basis
  
• They need information on markets
• They want assets building financial products e.g.
  savings, insurance etc
  
• They want financial services that their tailored
  to their needs and circumstances.
  
• Provide all these, particularly to women and they
  will change the way the world works
  

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THANK YOU