Mothers Microfinance rescues women from credit crunch

What began as a credit scheme 13 years ago has now transformed into a microfinance company. Ama Amankwah Baafi reports


Until now, the Christian Mothers Association Credit Scheme (CHRISMACS) was the financial wing of the Christian Mothers Association (CMA), a non-governmental Christian women organisation in the Catholic Church and was committed to empowering women.

It registered as a subsidiary of the mother organisation, targeted to grow into becoming CMA group of companies and operated under the supervision of the Department of Social Welfare and also under the umbrella organisation of Association for Financial NGOS.

Subsequently, by a Bank of Ghana (BoG) regulation of the activities in the microfinance sub-sector, CHRISMACS now known as the Mothers Microfinance Company Limited (MOMFIN) opted to operate under Tier 2, as part of its vision to become a mothers’ bank. By the regulation it has now moved from a financial (NGO) to microfinance.

The Programmes Manager of MOMFIN, Mr Edward Onyameba Boafo told the GRAPHIC BUSINESS that because of the vision that the mothers had for their economic empowerment programme, they deemed it more prudent to be a microfinance company than to remain where they were.

Now MOMFIN is mandated to mobilise savings, give loans, take collateral and register with the treasury at the BoG and does all these under the supervision of the BoG. It is also under the Ghana Association for Microfinance Companies.

“In the past, we gave out small loans but we are now strong enough to give bigger loans and to collect them back. Our main idea is to give regular and easy access to credit for all enterprising women in Ghana,” Mr Boafo explained.



STRATEGY

Numerous baseline surveys the group conducted gave an idea of how to engage the women and help them. A sponsorship from the BUSAC Fund enabled MOMFIN to research into the challenges facing enterprising women in their businesses.

It emerged the challenge of access to credit dominated and so through the NGO, MOMFIN trained such women to effectively manage credit, add value to whatever they produce, while it adopted a ‘know your client strategy’ to get closer to them.

MOMFIN took into consideration the available commodity in each area, put the women in groups and gave them loans which they are able to pay back.

Mr Boafo said “invariably the most outstanding hallmark has been that those who were down and had nothing can now justify that indeed the programme has brought life into their homes. Most of them who are single parents are now able to send their children to school and livelihoods have improved generally.”



IMPACT

Access to credit remains an issue to women in enterprises and that is what MOMFIN says it has worked at and continues to work on. Unlike other microfinance institutions, MOMFIN boasts of a regular and quality service. Even after a loan cycle ends clients are guaranteed a second amount which may be bigger.

“Everybody who has been with us will tell you the benefit that has come to them. People are flooding our office as a result. Some have gone through and now they tell us that they want to work with their own savings and they want to work with the capital that has,” he said.

MOMFIN is still among the least when it comes to interest charge. The ultimate among the CMA is that because of its holistic approach to women’s development in Ghana, the moment they go through economic empowerment, automatically they are also engaged for their civic rights to enable them take part in decision-making and political positions.

The oldest partner of the CMA has been the Konrad-Adinauer Stiftung (KAS) that has as part of its social development agenda, encouraged them to move beyond prayers and credit union activities to support in the delivery of civic rights, while KAS gave them resources to engage women, especially at the district level.



MOMFIN’S ASSOCIATION WITH EED

Church Development Service (Evangelischer Entwicklungsdienst - EED) is an association of the Protestant Churches in Germany. By means of financial contributions, personnel involvement, scholarships and consultancy services EED supports the development work of churches, Christian and secular organisations.

Therefore, for the CMA’s economic empowerment programme through MOMFIN, EED has been its main partner for the past nine years. However, since it set off on the path of sustainability, it has asked the EDD to show them how to “fish” and not give them fish.



CLIENTELE

The clientele base has increased from 5,000 to over 10,000 with 17 branches nationwide, except the three northern regions. It employs 46 full staff and six casuals.

“There is no MFI that has been formidable as ours. The structure is solid and we have engaged professionals to run affairs. We believe with support of the board we will be able to economically empower women in Ghana,” Mr Boafo said.

About five per cent of MOMFIN’s clientele are men and are marching the challenge very well, but then its focus is women and so cannot give higher amount to the men.



CHALLENGES

The management of MOMFIN welcomed the directive to mobilize savings and never envisaged the challenges it is facing. Unlike the Christian mothers who due to the faith and cohesion and group work pay back loans, ‘outside’ clients are different and put up tricks to avoid repayment.

Therefore, it does due diligence before it gives out loans though it is in to help women it is careful as to who to lend to.



EXISTING PRODUCTS

Formerly because it was a financial NGO it could only do compulsory savings, which acted as cash collateral for loan.

Other group products include the Mothers Product for enterprising mothers (members of the CMA), Semanhyia which moved them to another level where money was given to individuals in groups, Emuye (the sweetness of the pudding lies in the eating), through which they created jobs for other women and the small and medium enterprise product.



NEW PRODUCTS

Its Department for Monitoring and Evaluation after a research end of last year came out with new products.

These include Ketewa biaransua (little drops of water makes a mighty ocean). MOMFIN always pegs its rate up to three per cent over that of BoG’s baseline rate; Core savings account which within 24 hours a client can get his / her money back; Peykinkran a core account like the normal commercial bank interest given to them at BoG baseline rate; Hyehyeehye (a core savings account) which is an investment of a sort which gives two per cent on the treasury bill interest rate.

Some of MOMFIN’s loan products are Gyae suu, a funeral products that has brought a lot of people who are not Catholics on board; Menso metwi bi (car loan); Prosperity account mostly for wholesalers engaged in imports who make orders outside while MOMFIN’s contact person follows up to ensure that quality is not compromised. MOMFIN said within the shortest possible time these wholesalers see their margin and are able to pay back their money.



HOW MOMFIN STANDS OUT

Mr Boafo said anyone who wants to grow his / her business must come to MOMFIN. “Wherever every commercial bank or MFI ends that is where we start from. We believe in negotiation so whatever you have to invest we sit down with you, talk it over and do proper documentation so always the customer is gaining. Everybody must come to us for us loan because our conditionality is flexible,” he added.

Even when a person takes a loan from MOMFIN and passes away leaving outstanding amount, there is a package that caters for that and so MOMFIN does not demand from the family. Indeed, it makes a donation to the family.

Also, each client is given the chance to bring at most two relations on board such that if anything happens MOMFIN can show love.



FUTURE

It hopes establish branches in the three northern regions soon. By the year 2016, MOMFIN hopes to be a fully fledged savings and loans company and is working fervently to achieve this.