Village banks: a little goes a long way in Senegal

At a village bank in Djiguinoune, women line up with account booklets and monthly savings that help secure fresh loans to fuel their small businesses. Photo by R. Nyberg, USAID

Sitting outside in a large circle, the women of Djiguinoune quietly await their turn. There is no haggling or hectic hustling here. These enterprising villagers have learned that patience and planning pay off. Under the shade of a large tree, the village bank in this remote, dusty settlement in Senegal’s southern Casamance region is open for business.

One by one, the women step up to the table and turn over their safely-guarded account booklets and cash they have saved up during the past month. A microfinance helper from USAID’s partner in the region, Catholic Relief Services (CRS), carefully records a new entry with the amount of savings, and stamps the woman’s fingerprint next to it in blue ink. Once all 50 customers get their turn, the bank issues new loans from a red plastic bowl. Based on the need and track record in loan repayment, women can take out $50, $100, $200, or more in local CFA currency. Simple as is seems, the USAID-backed village bank scheme really works.

Astou Tamba, a mother of four girls and two boys ranging in age from seven to 27, has been visiting the village bank since 2001. “Before I didn’t save five francs,” she said. “Now I have real savings.” She needs them to expand her small garden where she cultivates egg plant, tomatoes, and okra for market. “I’m saving for hard times,” she said, recalling nearby skirmishes between government soldiers and separatist rebels some years ago. And of course, she saves for her children’s education.

Tamba is one of more than 4,700 people in the Casamance to have benefited from small loans like those doled out at the village banks. Others use their loans to make and sell soap or dyed fabric, set up pottery businesses, sew clothing, and run village kiosks or other small shops.

Fatou Diatta is another who has developed a robust business with a small loan. A member of the Santhiaba Mosque village bank in Ziguinchor, Diatta sells firewood and more recently, imports stylish Malian cloth much sought after by women in Senegal. With it she covers her costs and has earned enough to build a new house. Having saved 2.4 million FCFA over time (about $4,600), she has been able to send her son to school and travel back to Mali to restock her shop. This successful merchant is sold on USAID microfinance.

The results of this USAID activity have been impressive. To date, 33,839 loans totaling 345 million FCFA (about $663,000) have been given out. These loans have generated over 2.3 billion FCFA (about $4.4 million) in profits for the small entrepreneurs. And the loan fund keeps growing, as over 390 million FCFA (more than $750,000) is currently in circulation.

Those red plastic bowls continue to improve lives and livelihoods in rural Senegal.