The focus on coups, mercenaries and militant and other violence in Mali, Burkina Faso and neighboring countries is understandable. Armed attacks not only kill and harm people and destroy property. The destruction, insecurity and instability impedes economic development.
In the long run, such development is central to lasting solutions to political violence and all the suffering it causes.
Rural villages in Mali and Burkina Faso are making progress in improving output and incomes, and the increased social solidarity that creates. The key is access to capital.
Foreign investors are not setting up shop in these villages. Rather, communities must rely on themselves to build capital to invest in agricultural innovations and small businesses. This may sound impossible, given the poverty in these communities. But through savings and credit groups, it’s happening.
A savings and credit group is an initially small group of individuals and families. Each participant contributes a small amount each month. When enough capital is amassed, participants take out loans at low or no interest. These loans are invested in greenhouses, fish ponds to raise tilapia and catfish, better seeds and livestock and other improvements to raise output and profit. If there is a difficulty repaying a loan, a savings and credit group will work with a borrower on terms that work. Unlike loansharks or even banks, neighbors do not seize property or otherwise impose conditions that can make borrowers worse off than before they took out a loan.
In addition to making loans, savings and credit groups teach basic accounting and other financial knowledge.And since many members are often illiterate, these groups can teach reading and writing so members can understand financial education. Savings and credit groups are often the hub of a more comprehensive social and economic development effort.
One such effort in Burkina Faso and Mali has helped communities accumulate savings of just under $27,000, with hundreds of loans to members to fund agricultural innovations and start businesses.
$27,000 is an extraordinary amount of capital accumulated by families in rural villages in any country, and especially in Burkina Faso and Mali, which rank among the poorer countries in the world.
World Neighbors is the international development organization that works with communities in Mali and Burkina Faso to set up savings and credit groups and implement other low-cost solutions to help catalyze development.
