Microfinance
Project overview
Volunteer Partnerships for West Africa (VPWA) operates a microfinance project in the GA West District of the Greater Accra Region in Ghana. This provides financial support to people who are unable to access mainstream banks. In particular, the VPWA microfinance project provides loans to low-income women in the district, allowing them to set up and to grow their small enterprises.
The project started in 2009 and to date more than 60 women have received microcredits. In addition to the provision of loans, VPWA supports the beneficiaries with essential business skills training, such as bookkeeping.
The aim of this project is to support the economic participation of women, promote gender equality and improve the welfare of the beneficiaries.
To grow the microfinance project VPWA would like to establish a network of donors, whether individuals, companies, donor agencies or trusts.
Why is this project important?
Ghana is burdened by extreme poverty and faces significant challenges as it tries to meet the Millennium Development Goals (MDGs). 44.8% of the population of 22 million is living on less than one dollar a day, whilst 78.5% of the population lives off less than two dollars a day.
Microfinance is proven to be an effective and efficient means to combat poverty. However, in Ghana only about 300,000 people are currently benefiting from microcredit. Many more people could benefit from this help and therefore it is important to expand microfinance programs in the country.
How does the VPWA's microfinance project work?
The VPWA's microfinance project uses a Group Lending Methodology (GLM). This requires beneficiaries to form a 'solidarity group' with a maximum of four people. The group then joins other groups to form a centre (with a maximum of 5 groups). By doing this the group members guarantee each other's loans (group guarantee scheme).
Volunteer credit officers provide all the beneficiaries with business skills training before they receive their first loan payment. The borrowers have to repay the loan within a four month period. Repayment begins on a weekly basis at our VPWA Microfinance Centre a fortnight after they have received the loan. The group are only able to receive new credit when all of the group has fully paid back their outstanding loans. The selection of beneficiaries who are eligible for microfinance credits is based on various economic and social criteria.
