Bolivia
Project Description
Five Talents' partnership in Bolivia began after two sisters attended a Five Talents training course on how to establish community managed savings and credit groups. For four years, Eva and Sara Mamani promoted the creation of rotating savings groups in their local community in Tarija, southcentral Bolivia. In 2008, Five Talents approved a partnership with the project which is now called 'Semillas de Bendicion' meaning "Seeds of Hope". Five Talents is now supporting this initiative, aimed at helping people with no access to financial services, due to the lack of microfinance availability in the area. Semillas de Bendicion is supporting savings and credit groups in the town of Tarija, as well as groups in rural communities in the surrounding regions of El Puente, Entre Rios, Calamuchita and Valle Concepcion.
As they travel to visit communities and train them on how to set up their own rotating savings groups, Eva and Sarah also teach women how to dry leaves that are commonly available in the area, ground them into flour and turn them into noodles. In this way, they demonstrate to people in the community how they could practically establish their own micro-business.
Community Description
The project targets financially excluded communities in the Andean valleys of southcentral Bolivia. Rural poverty in Bolivia is concentrated in the high plains and in valleys, where it is estimated that poverty affects as many as 2 million people, 1.6 million of whom live in extreme poverty conditions. The majority of these rural inhabitants are of indigenous origin. The social groups that evidence the greatest levels of poverty and vulnerability are indigenous communities, women, and young people living in rural areas.
The majority of rural women work on family farms but their work does not receive sufficient economic or social recognition - therefore their access to capacity, credit, and technical assistance is limited. Their access to health and education services is also limited. The average number of years of schooling for rural women is only 2.5 years, while it is 4.7 years for men. Seasonal migration among men is very high in some regions of the country, which leaves women, in many cases, as heads of the household.
Target
Through this programme, Five Talents expects clients to gain business skills as well as the habits of saving and borrowing, which will enable them to participate in enterprise development. By the end of 2008, the 10 groups in Tarija, and 3 groups in the rural locations had been formed. These groups are made up of people living in poverty, half of whom have small businesses and half of whom rely on seasonal labour opportunities.
It is estimated that as many as 50 new small businesses will be created along with up to 25 new jobs in existing businesses, increasing incomes for more than 400 adults and children.
Invitation
Five Talents plans to grant £3,000 to the Bolivia project in 2010. Please consider making a donation here.
Community Based Mechanisms for Financial Services: An Overview
Rotating Savings and Credit Associations (ROSCA)exist all over the world and have in various forms for generations. The typical ROSCA will have members join together to meet and save a fixed amount of money on a regular basis. At each meeting one member will receive the contributions of the group that day. The group determines in advance the amount of savings and the order in which it is given out. The process continues until each member has received their share. While this method meets the needs of some groups in an efficient, transparent and cost effective way it does not allow for flexibility.
The Area Savings and Credit Association (ASCA) method takes the ROSCA format and adds flexibility to an efficient, tansparent and cost effective user owned and manged organisation. In this adaption, the group members create a fund from which group members borrow at predetermined interest rates and terms. The interest, fees and any fines in addition to member savings sustain and grow the loan fund. These organisations exist for a fixed period of time or can be on going; in ether case the return on the members' savings remains in the community. On the first day of the ASCA's formation it is sustainable because members manage the activities and profits benefit the members and stay in the local community.
More Information
Click here to read the latest programme summary on this project.