VGF Bank of the Poor: Micro Credit Effectiveness in Reducing Poverty and Enhancing Livelihood

VGF Bank of the Poor will work towards reducing poverty and enhancing livelihood for those of poor and vulnerable communities.

About You

Organization: Voice of Grace Foundation Cameroon Visit websitemore ↓↑ hide↑ hide

About You

First Name

Ndonwi

Last Name

Wilfred

About Your Organization

Organization Name

Voice of Grace Foundation Cameroon

Organization Country

Cameroon, SOU, Limbe

Country where this project is creating social impact

Cameroon, XX

Is your organization a

Non‐profit/NGO/citizen sector organization

How long has your organization been operating?

1‐5 years

Has the organization received awards or honors? Please tell us about them

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Innovation

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Select the stage that best applies to your solution

Start-Up (a pilot that has just begun operating)

How long have you been in operation?

Operating for 1‐5 years

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two

Access, Equity.

The Need: What problem are you trying to solve?

The poor form a substantial large portion of the pyramid of every population that has been largely restricted access to financial services by financial institutions and suffer great exploitation from ‘private money lenders’This has render them helpless with no opportunity of advancing their ideas, improving their health nor even education their children. Hence, have resorted to force and early marriages of their daughters to secure bride price as a means of livelihood; indulging into into traditional practices like breast ironing, Female genital mutilation as means of securing fast income. In addition rural exodus is at the peak favouring prostitution , violence, increase crime wave and conurbation in the cities and contributing to the continue spread of HIV/AIDS.

The Solution: What is your solution? Be specific!

The creation of microenterprise finance(MEF) for the poor women. This will permit the very poor , women groups, to gain revolving funds at little or no interest (rates <5% per annum) to finance their micro projects. This micro enterprise finance- termed ‘VGF Bank for the Poor’ will serve those excluded and so much in need. This will permit them to be able to save as low as 500frs = $1 a day through daliy mobile collection agents (Social Fund Collectors). This scheme is intended to raise their erratic disposable household income from 15%- 65% in one year. The scheme will enable them escape the ‘private bankers’exploitaion’ commonly known as ‘10 born 3’ which means for every 10,000frs borrow from them, one pays 3,000frs as interest (30%) that is 300frs is paid per 1,000frs; and 3,000frs for each 10,000frs. This is extracted from our baseline survey study; Poverty and Misery,( Ndonwi 2010). And increase of micro insurance to the poor which enables them to prepare for contingencies.

The Model: Walk us through a specific example of how your solution makes a difference; include your primary activities

VGF Bank for the Poor is an initiative that has left a land mark from groups to individuals, we lend at money to those in need at 2.5% rate per anum. This has enabled many young adolescent mother start up small micro businesses, other have secured sowing machines and zigzag machines, and some grops have purchase for themselves grinding mills. All is aimed at promoting self employment at the rural based community. This is the lamp light we have introduced into our communities of intervention.

The Marketplace: Who are your peers and competitors? Identify others also working to address the needs you are and what differentiates you from them. What challenges could these players pose to your success or growth?

Our main competitors are the existing microfinances, cooperatives credit unions, private money lenders who through their long existence guarantee the population that they can never wind up. Eventhough, they used this a check against us, we are still making it through because of the swiftness and non-complicated process in addressing the need of our audiences or target. The sceptical attitude of the population because of poor intervention of some of the civil society organisations or social enterprise with similar activity is our main challenge. But we have developed ways to cope and are winning the population confidence.

Social Impact

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Founding Story: We want to hear about your "Aha!" moment. Share the story of where and when the founder(s) saw this solution's potential to change the world.

The organization was started by Dr. Ndonwi Wilfred. Driven by the Director’s passion to assist single teenage mothers( youths) and women who often lack the opportunity to participate in life processes that affect their own life the organization was set up in fulfilment of this purpose. This was as a result of the untold misery and tattered appearance exhibited by the numerous rural and urban poor women population.(especially those discriminated against). This passion grew more when the Director within a day counseled forty-five(45) bartered and disfigured women by their rude less husbands.(victims of violence and assaults) , some , just for the fact that they requested for food money or hospital bills either for themselves or their children.

Please describe the goal of your initiative; outline what you are trying to achieve

The Voice of Grace Foundation Women Bank for the Poor which aims at reducing poverty and enhancing livelihood amongst rural and urban poor women, single teenage mothers and destitute youths through sustainable financial services as well as vocational and entrepreneurial skills training. Through the project, this VGF Women Bank Forthe Poor (micro-enterprise finance) will serve 22,100,000 women and 700,000 single teenage mothers as direct beneficiaries of the program.

Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,.

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:

For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

Single teenage mothers, destitute youths, girl child, rural and urban poor women.

Could your solution work in other geographies or regions? If so, where?

Less developed countries should be the countries of replication as they all have similar characteristics/ problems.

If your solution is dramatically successful, how will things be different in 10 years?

The only way to make poverty a history is to help the poor make money. Therefore, success will mean that economic dependence is decrease from 85% to 15% in three years, all can easily gain access to financial services at the most cheapest cost and convenient way, just economic in which the poor are greatly empowered for self development and advancement of their own communities.

What will have had to have changed to make this happen?

Increased Resources (material and finances) is the only catalyst to achieving this.

What has been the impact of your solution to date?

In our 9months of operations we have demonstrated that the only handicap to goals attainment is finances. Through VGF Bank for the poor, we can evidently count up to 5,000 beneficiaries, 500 customers who have registered in the daily mobile collection, 1500 scale businesses, 50 micro enterprises launched with funds from us. This compelling statistics indicate that success is inevitable. The quality of the innovation is seen in the improved lifestyles of the population, family can now afford for basic, secondary and post secondary education, pay accommodation, improved health and afford for social facilities, some have acquired skills needed for employability. The quality of our service impact is inestimable.

What is your projected impact over the next five years?

We envisioned that within the next three 03 years(2015) we would have empowered 8,100,000 women, 1,000,000 youths , 2,00,000 girls economically and on skill enhancement. This means by this year our program would have systematically improved the life of half the country’s total populations(50%) in all the eight areas of the millennium development goals.

What barriers might hinder the success of your project? How do you plan to overcome them?

The main hindrance might be non available and adequate resources to enable us attain our goals. Therefore, fundraising(resource mobilisation) is one of the activity we must embark on to succeed.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

Increase resource mobilisation, target beneficiaries and carry out impact assessment

Identify three major tasks you will have to complete to reach your six-month milestone

Task 1

Fundraise to increase resource portfolio

Task 2

Make important contacts at local/int'l levels to raise partnerships/customer portfolios

Task 3

Reorganize and facilitate local workshops/seminars for informative purposes and advocacy

Now think bigger! Identify your 12-month impact milestone

Gain global partnerships, see tangible impact of project participation and expand VGF services

Identify three major tasks you will have to complete to reach your 12-month milestone

Task 1

Achieve global network of collaborators

Task 2

Increase income level 15-45% for women in the project communities

Task 3

Launch VGF multipurpose training institute and cooperative house

Sustainability

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Tell us about your partnerships

Community Based organizations, Common initiative Groups, Self Help Groups, Women Empowerment Centres, Vocational Training and Employments institutions, Network of Allies with similar objectives, Donors looking for social entrepreneurs(Schwab Foundation, Starbuck Foundation, Ashonka, Exxonmobil), Youth Network Evaluation Fund, National Endowment Democracy, United Nation trust Voluntary fund for ending modern form of slavery.

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?

Rural and urban poor communities of Cameroon not just a particular political class since poverty is not just a women issue but affecting all stakeholders. Women are the target due to the fact that they constitute the largest proportion of any given population. Our scope is international even though for now we are only at national level

What type of operating environment and internal organizational factors make your innovation successful?

We have a scheme that has an unbeatable advantage over all the microfinancial services. For example, our micro savings and micro insurance programs allow our clients or beneficiaries to register with five hundred francs which is less than $1 a day enabling the ultra poor to participate. Where as the other MFI has as minimum 10,000-15,000 FRS which the ultra poor savings for a year, thereby excluding them from benefiting from such services. With our minimum being $1we are able to make as many clients as possible help themselves, launch their micro programs, increase access to girl child, build and enhance capacity and skills on entrepreneurship.

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

We are researching a lot into ‘why’ poor people hardly break the cycle of poverty. We offer opportunity for individuals as well as groups to invest and donate or collaborate with us to support our mission.

82 weeks ago Ndonwi Wilfred submitted this idea.