Action Aid operate a very successful loan fund in the Gambia. The fund is not revolving, in that it has been given by supporters for relief work. So this credit scheme instead seeks to use this money imaginatively to build up communities. The objective is to build up savings within each community so that people eventually have their own capital to invest.
Groups of about ten households within a community are encouraged to come together and plan appropriate income generating activities within their village.
System One Groups
These are the new groups – at present there are 155. Applications are discussed by a Credit Committee and compared with available funding from a core fund – provided by Action Aid in 1993. Individuals must provide, up front, 10% of the amount requested themselves and this is paid into a trust fund account on their behalf. Repayments must be made within a given time but, instead of being paid back to a loan fund, they are paid back into the trust fund account. Loans are used for buying ploughs, ox carts and seed (eg: groundnuts).
System Two Groups
These groups will have saved initial capital in their trust fund accounts and so are able themselves to put forward 50% of the loan requested. They are able to access much larger amounts of credit. There are 29 groups at this level.
System Three Groups
These are the mature groups in terms of management capabilities. Their communities will usually have a basic infrastructure with primary health care, clinic and school as evidence of their maturity. It can take up to five years for a group to reach this stage. So far there are nine groups at this level, each having their own funds available from their savings accounts. Action Aid also provide funding for community improvements.
One such activity is at Ker Usman Boye village where 95% of the community are now involved in the group. They have built a Primary Health Centre which also provides a community centre for literacy work, meetings, mother and baby clinics etc. On a weekly basis the whole village is cleaned and household water containers are checked. The community buys rice and other food in bulk to resell at a profit.
Another village is involved in fattening rams and transporting them to markets elsewhere in the Gambia. Grants for buying in stock and transport have been given on condition that some of the best rams are kept for breeding.
A vegetable-growing group – the Mabali Koto Women’s Group – noticed that male members were mismanaging funds. The women stood up firmly to ensure that funds were handed over to the female members. ‘You are dragging our feet,’ they told the men! Now the group is progressing well with extensive growing and marketing of vegetables and fruit. Over half the mangoes in Bansang market come from this one group which the women continue to manage.
Churchill Bandeh works with Action Aid in the Gambia. His address is Action Aid, PO Box 725, Banjul, The Gambia.