Breaking the cycle of poverty: Credit unions empower citizens in remote areas of Mauritania

January 14, 2014

By Kulsoom Rizvi

Villagers in the southern areas of Mauritania live in the most remote part of the country that is vulnerable to even the smallest changes in food prices brought on by  the onset of droughts.

These remote regions lacked access to financial services, essential for small scale agriculture production, storage, distribution and other income generating activities. Existing lending institutions based in Mauritania were hesitant in making investments in programs  to provide loans to community members, because of the high lending risk associated with extreme poverty and their lack of experience in rural areas.

Farmers and entrepreneurs in these villages were without capital needed to invest in the robust market-driven local food system and invest in income generating activities.

Communities were trapped in a cycle of poverty.

Through the Community Action, Nutrition and Livelihoods program (CANAL) funded by the U.S. Agency of International Development, Counterpart International built the institutional and technical capacity of its partner Caisse d’Epargne et Credit Djikké-Mutuel (CECD-M) to deliver microfinance services in sevenrural municipalities of Mauritania.

CECD-M delivered a total of 1,416 microloans worth $515,000, with the support of Counterpart. Beneficiaries included 6,259 women and 394 associations and groups. 94 percent of borrowers have kept up on payments.

The success of CECD-M resulted in the establishment of four new rural savings and credit cooperatives; providing services to communities in Gorgol, Guidmaka, Assaba and Hodh El Gharbi.

The four new institutions allowed the management of CECD-M to extend their lending services to a larger customer base by expanding from four to eleven credit cooperatives serving 120,000 people.

“This partnership between Counterpart International and CECD-M and the introduction of microfinance services to rural communities, brought about real change in the fight against poverty, improving household wealth and developing economic independence of communities,” Chief of Party Romain Kenfack said.

Starting from scratch

Hiring staff for the credit cooperatives proved to be a challenge. Most qualified personnel were reluctant to work in the isolated regions.

Counterpart helped CECD-M conduct several training sessions each year, including a coaching program that included practical hands-on training and monitoring.

“During the coaching sessions, we reviewed some selected loan applications that were already approved and found that only ten percent of the application met our new standards. We are now equipped to improve our work in reviewing loan applications,” Hadjiratou Samaba Sow, credit committee president of Foumgleita Saving and Credit Cooperative, said.

Kenfack said that the presence of savings and credit cooperatives in the rural areas improved living conditions through enabling population to save money, take out loans, and receive remittances.

“This is a critical factor for the sustainability of microfinance activities in the regions and illustrates the quality of services and interest of people in accessing microfinance services.”

Investing in women-led activities

Chaya Mint Mahamed is the president of the Emel Women Group in the village of Touil. Most of the women in the group are heads of their households, mothers who want something better for their children and families.

“We wanted to develop a business, but we needed money to start. There was no harvest because of the drought and we sold all our livestock. With the credit service, we were able to start our dying and dress making activity. We can now better provide for our families and the traders now trust in us as we are able to pay our debts,” Chaya Mint Mahamed said.

The credit services allows both men and women to initiate various income-generating activities and have new weekly markets to sell their products.

One of the most successful activities was the milling machine where a group of women received a loan to buy a milling machine and hired two others to manage it. They paid back  their loan and were able to open a shop and butchery.

Easy access to food during the lean period and drought are crucial in these communities. Mame Mint Hamoud who runs a small shop In Hel Abeidallah community doubled her capital in five months.

“We used to sell only small items in our shop. Now we are able to stock and sell any kind of good that is needed in the village. With these commodities, prices are stable in the village even during the raining season when prices usually increase. We do no longer depend on seasonal traders,” she said. “There is also more solidarity among the women in the village.”

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