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From: Microenterprise – Footsteps 35

Ideas and advice for developing successful small businesses

A recent report by Professors Hulme and Mosley studied the work of 13 micro-credit institutions in seven different countries who provide small amounts of credit to help micro enterprise. Their findings are very clear and are likely to have a large influence on groups who provide credit in the future. They make three important conclusions:

These findings are not encouraging for people trying to rise above the poverty line and who may find it even harder to obtain credit in the future as a result of this research. However, there are still positive steps to take. Recent visits by the Editor to rural people’s groups in Uganda and Ghana have shown that active groups with members who meet regularly and often work together, can run very successful simple credit schemes with no outside help. Members agree to contribute a small amount of money each week and take it in turns to benefit as one member takes all the money for that week. Most use the money for clothes, school fees or small income generating activities. Groups need to be well established so that members trust each other to make regular contributions.

Finance Against Poverty by David Hulme and Paul Mosley was published by Routledge, London in 1996. The summary of the book’s findings was taken from Focus No 5 published by CGAP, 1818 H Street NW, Room G4115, Washington DC 20433, USA.

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