Micro-leasing: Empowering women entrepreneurs
VPWA’s Micro-leasing scheme empowers no-collateral-but-creditworthy entrepreneurs to lease productive cash-generating assets.
Sobre tu organización
Nombre de la organización
Volunteer Partnerships for West Africa
Sitio web de la organización
País de la organización
Ghana, GA, Pokuase - Accra
Países en donde este proyecto está creando impacto social
Ghana, GA, Fise, Amasaman - Accra
Tu organización es
¿Cuánto tiempo ha estado operando la organización?
¿Tu organización ha recibido premios y/u honores? Cuéntanos sobre ellos.
1. In 2010 & 2011 respectively, VPWA Volunteers was selected for the prestigious United Nations Volunteers award.
2. VPWA Green Ghana project was finalist in 2011 Project Inspire and MasterCard Project Inspire program in Singapore
3. In 2012, VPWA founder Hayford Siaw was selected Playmaker by Playing for Change to work on an idea to help improve life for children.
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Selecciona la fase que describa mejor el momento en el que se encuentra tu emprendimiento
Inicio (iniciativa piloto que acaba de empezar a ponerse en práctica)
¿Cuánto tiempo se lleva poniendo en práctica tu iniciativa?
Operando menos de un año
¿Cuál de las siguientes describe mejor la(s) barrera(s)s a la que da respuesta tu innovación? Elige hasta dos.
La necesidad: ¿Cuál es el problema que tratas de solucionar?
According to a recent survey conducted by FINSCOPE, 30% of Ghanaian adults in the urban areas of Accra are still completely unbanked. This demonstrates the need for growth in the microfinance sector to foster investments and thus, economic development at the micro-enterprise level.
However, giving out cash loans presents some issues: it is not uncommon that the money kept in the house is being used for non-business purposes like school fees, funeral rites, etc. Moreover, the money loaned tends to be used for working capital needs and not invested in productive equipment due to low business planning ability and financial literacy of the beneficiaries.
La solución: ¿Cuál es tu solución? Sé específico.
The solution is a Microfinance Institution (MFI) that enters into leasing contracts with its beneficiaries instead than giving out loans. The target of VPWA’s micro-leasing program is women entrepreneurs with no assets for collateral and therefore, no possibility of accessing the formal banking system.
Money is used to purchase and lease productive equipment instead of being directly lent to avoid it being be taken away or turned into cash to pay for unbudgeted expenses not related to the business. Women must define the equipment to be purchased and leased as part of a business plan, which is a prerequisite for the lease.
An adequate level of financial literacy and business planning is reached through business classes and weekly visits by the VPWA’s staff to the beneficiaries’ business places.
El Modelo: Muéstranos a través de un ejemplo específico cómo tu solución hace una diferencia, incluye tus actividades primarias
Here is the success story of a micro-lease. Mrs. Grace Laar sells red red (beans and fried plantains) and rice and stew as her business. She originally used charcoal as cooking fuel, for a weekly cost of 34 GHC (17 USD). In November 2011, VPWA helped Mrs. Laar purchase a gas cylinder and a stove within the micro-leasing scheme, allowing her to cut down on her energy expenses to 20 GHC (10 USD) per week. The extra 14 GHC (7 USD) has gone to family and business savings and other expenses. Widely satisfied with the greater efficiency attained, Mrs. Laar invested her extra income in expanding her menu choices, which now also include banku, and was able to repay all her installments even earlier than the due date.
Like Mrs. Laar, hundreds of retailers, tailors, hairdressers, and other women entrepreneurs are in need of productive equipment to be more efficient, earn higher profits, and thus contribute to the sustainable development of their families and communities. The pilot phase of VPWA’s project, which centered on the easier to implement micro-loans, has shown that even in the absence of collateral, such entrepreneurs are creditworthy, with an almost 100% repayment rate, if they are given access credit.
El mercado: ¿Quiénes son tus pares y competidores? Identifica a otros que también estén trabajando para dar respuesta a las necesidades que tú abordas y en qué te diferencias de ellos. ¿Cuáles son los desafíos que estos jugadores podrían representar para tu éxito o crecimiento?
As of yet, there are no sizeable formal or semi-formal financial institutions operating in the vicinity of Amasaman, where the VPWA main project office is located and currently operates. The majority of the local population is still severely underbanked. VPWA Microfinance’s main local competitors are informal money lenders. Given that the informal sector does not generally constitute a reliable resource of financial services, VPWA has not had and does not anticipate much competition in its microfinance product offering.
Furthermore, VPWA’s leasing scheme is a completely distinct offering from the micro-loans other MFIs offer in the West Municipality of Greater Accra.
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Historia de la fundación: Queremos saber acerca del momento en el que hiciste "¡Ajá!". Comparte la historia de dónde y cuándo el/los fundador(es) vio (vieron) el potencial de esta solución para cambiar el mundo.
In operating microfinance program as part of organizational initiatives since 2009, I have been trying to find solutions to some of the perennial worry of the micro entrepreneurs. In 2011 I gathered through informal interaction with beneficiaries that often some of the recipients did not use the money in any way related to the growth of their business, although sound financial literacy two weeks prior to administering loan had been provided. It was obvious that there had been some change their minds on receipt of loan. In the quest to still support women entrepreneurs I came up with the idea of leasing asset which the beneficiaries can use to improve their business and own such assets after repaying the equivalent value of the item and the interest.
Por favor, describe el objetivo de tu iniciativa: un resumen de lo que están tratando de lograr
Backed by the success of the micro-loans, VPWA has decided to expand its offerings to include micro-leasing or financing productive assets. The goal of micro-leasing is to ensure that money that is given to the micro-entrepreneurs to generate development is actually used for productive purposes and not wasted due to misallocation of resources.
Beneficiaries’ level of wealth is increased by being given possession of a cash flow-generating asset, without running the risk of cash loans being used for personal expenditures.
Beneficiaries’ access to credit is improved: once the initial investment and the interests are repaid to VPWA, the beneficiary becomes the owner of the asset than can then be used as collateral to access further credit.
¿A qué barrera(s) a la inclusión financiera tu solución busca dirigirse? (selecciona todas las pertinenetes)
Físicas y otros obstáculos de accesibilidad que impiden que los servicios financieros lleguen a las comunidades, Falta de productos financieros asequibles adaptados a las necesidades de las comunidades marginadas y excluidas.
Si ha seleccionado "otro", por favor especificar qué otras barreras a la inclusión financiera tu solución busca dirigirse
¿Para qué comunidades marginadas o excluidas tu solución creará un acceso a servicios financieros valiosos, asequibles, seguros e integrales?
The target of the VPWA microfinance projects is the women entrepreneurs of Amasaman, where the office is located, and Fise, a nearby village, both in the West Municipality of the Greater Accra region.
The lively business community of this area is made up of small scale businesses, typically street vendors, retail workers, food stalls, saloons, and craftsmen. Most of these businesses generate just enough to get by. Savings for emergencies, children’s education, or to improve their businesses are not common. Access to credit for investments is very limited: Formal financial services require collateral, which these entrepreneurs lack, and informal financial services are not reliable. There are tremendous opportunities for MFIs, offering semi-formal financial services, to help alleviate poverty and support entrepreneurial ventures.
¿Tu solución podría operar en otros conextos o regiones? Si así fuera, ¿en dónde?
The micro-leasing scheme is easily applicable anywhere - that is, wherever there are people who do not have access to credit. From the poorest to the wealthiest regions of the world, credit is everyone’s right, and the leasing of a 134 GHC (67 USD) gas stove can change the life of a Ghanaian red red vendor as well as a French crepe chef.
Si tu solución tuviera un éxito espectacular, ¿cómo serían las cosas diferentes en 10 años?
If micro-leasing expanded at a pace of 288 beneficiaries the first year, 378 the second, and 550 in the third, as devised in our business plan, in 10 years all of the businesses of the West Municipality of Greater Accra in need of productive equipment will have the possibility to lease it. This will lead to an increased productivity of businesses, greater profits to be reinvested, stalls turning into shops, economic stability for the beneficiaries, and improved wealth and well-being for the entire community.
Through business and financial classes, made part of the leasing process, business awareness and financial literacy will spread in the area, which will foster a more efficient and productive use of resources.
¿Qué tendría que haber cambiado para que esto sucediera?
Not much is needed to get things started. An initial investment of 52,722 GHC (28,000 USD) is forecasted in our business plan in order to serve the beneficiaries mentioned above, which are 288 the first year, 378 the second, and 550 the third. However, these numbers can easily grow exponentially with greater funds. After the first year, the process will be self-sustaining, since the new equipment to be leased will be purchased through reinvestment of operating income.
As the number of beneficiaries grows, the teaching process will be institutionalized through hiring the appropriate personnel and renting the appropriate space.
¿Cuál ha sido el impacto de la solución hasta la fecha?
VPWA started a microfinance pilot project in 2009 with a group of 50 beneficiaries, offering a straightforward micro-loan product combined with basic financial literacy training. Since the start of the initiative, more than 120 micro-loans have been granted with a total volume of more than 19,000 GHC (9,744 USD).
The experience has been very positive so far. The small loans and subsequent training provided by VPWA Microfinance has substantially helped entrepreneurial women to launch or expand upon a small business and gain regular income. This has enabled these women to provide for their household, send their children to school, and minimize dependence on their husbands.
As for micro-leasing, the project is still in its start-up phase, so the only impact we are currently able to measure is the effect on Mrs. Grace Laar, mentioned above.
Cuál es tu impacto proyectado para los próximos 5 años?
Over the next five years, the project is expected to reach a volume of more than 4,000 beneficiaries (year-to-year numbers are detailed in the business plan). This means empowering more than 4,000 women by giving them the instruments to make the most efficient use of their time, increase quality standards and quantity of their production, and earn a sustainable living out from it. A knowledgeable business community will be created through the positive spillover effects of a trained set of beneficiaries.
¿Qué barreras pueden dificultar el éxito de tu proyecto? ¿Cómo planean superarlas?
The major obstacles we have been experiencing with the micro-loans are late repayments and laziness in bookkeeping of the beneficiaries, and we are likely to face the same problems with micro-leasing.
The difference comes from the fact that the leased product, which acts as collateral, and the initial 10% required deposit give an incentive to the beneficiary to pay on time. Moreover, once taught how to do bookkeeping during ad hoc classes, micro-leasing beneficiaries are more likely to have stable business places, where our personnel may more closely monitor and aid their businesses.
Las iniciativas ganadoras presentan un plan fuerte de cómo van a alcanzar y realizar un seguimiento del crecimiento. Identifica tus metas a seis meses para el crecimiento de tu impacto
By the sixth month of the project, 144 leasing contracts will have been signed for an amount of over 50,000 GHC.
Identifica tres grandes tareas que tendrás que completar para llegar a las metas de seis meses.
24 leasing contracts to be signed each month, of which 11 with a maturity of 6 months, 7 for 9 months, and 6 for 12 months
Collection of repayments and begin of reciprocal trust and respect relationship with the beneficiaries.
Begin of business and financial classes for the beneficiaries.
¡Ahora piensa en grande! Identifica tu meta de impacto a 12 meses.
288 leasing contracts signed, out of which 200 will still be outstanding. Leases will be financed by reinvested operating income
Identifica tres grandes tareas que tendrás que completar para llegar a tu meta de impacto a 12 meses
Keep the pace of 24 contracts to be signed per month, with the same structure as above.
Collection of repayments and enforcement of rules, while making sure not to break the trust and respect relationship built.
Accompany beneficiaries with business advice and bookkeeping help throughout the term of the lease.
Cuéntanos sobre tus alianzas.
VPWA Microfinance currently operates as an independent project under the Volunteer Partnerships for West Africa without any partners yet.
¿Actualmente te estás dirigiendo a otras poblaciones, lugares o los mercados para tu innovación? Si es así, ¿dónde y por qué?
¿Qué tipo de sistema operativo y factores internos de la organización hacen que tu innovación sea un éxito?
The success of the innovation depends on the fact that we build personal relationships with the community in which we are working: by going through the process of visiting, teaching and helping beneficiaries, problems are faced and solved together. It is a powerful instrument both for the beneficiaries, which are constantly followed, and for the organization, which is able to constantly improve thanks to the daily feedback received.
Por favor, pon en claro las necesidades u ofertas que hayas mencionado anteriormente y/o sugiere categorías de apoyo que no están especificadas en la lista
The current need we are facing is that of capital injection. According to our business plan, an initial investment of USD 28,000 is the minimum amount to start a self-sustaining program of micro-leases. However, the program can be easily implemented on a larger scale if the initial investment is bigger.