In Ethiopia, a project is experimenting with savings groups as a way to give women more financial clout and an alternative income when crops fail.
By Elias Gebreselassie (Thomson Reuters Foundation)
GANTA KANACHAMA, Ethiopia – Workinesh Denda, a stocky middle-aged woman, arranges hand-made stoves in a neat line in a small shop in Ganta Kanachama village, in southern Ethiopia.
“Before we had these (stoves) we could barely get by,” she said. “Endless drought would destroy our corn and teff harvests, leaving us with nothing to (sell) at the market or even feed our family.”
Increasingly erratic rain and recurring dry spells have slashed harvests and killed livestock in swathes of Ethiopia, raising fears of increased food insecurity.
Women often bear the brunt of such climate pressures, experts say, particularly as they usually have less power over their lives and are chiefly responsible for feeding their families.
“In Ethiopia’s rural areas, which are dominated by patriarchal attitudes, women rarely have a say in household finances,” explained Sintayehu Tsegaye, microfinance specialist at Mercy Corps, a charity.
To remedy this, a project is experimenting with savings groups as a way to give women more financial clout and an alternative income when crops fail.
Village Banks
Workinesh’s business was set up through one of over 300 village savings and loan associations (VSLAs) across Ethiopia, which aim to help members – most of whom are women – become more economically stable and independent.
The initiative, led by aid agencies Farm Africa and Mercy Corps, is part of the Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED) program, funded by the UK Department for International Development.
The groups meet weekly to pool their money, with the savings used to provide loans ranging from 300 to 3,000 Ethiopian birr ($11-110) to group members, at an interest rate of 10 percent if repaid within three months.
Requests for larger loans are referred to partner microfinance institutions in the area.
“Poor rural communities have little to no access to financial institutions like banks to build a cushion against climate extremes such as drought,” Tsegaye said.
“So we aim for the savings groups to act as an emergency fund in case of bad weather or other needs, such as if a woman needs to give birth in hospital due to complications,” he told the Thomson Reuters Foundation.
Read the complete story at Thomson Reuters Foundation
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