“It’s a matter of trust. We live in the same place and know each other very well,” said Alimata. Trust and thorough knowledge of each other, she said, are the key to the success of their microcredit system.

“Everyone pays back with interests, except when some serious private problems have occurred,” Alimata said.

Positivity and pride

Researchers and development professionals are often puzzled by the way poor people report about positive initiatives that generate additional income. The poor are believed to often hide positive news, because, it is assumed, reporting the good news would chase potential funders away. From this perspective, the Nankouloubou association’s internal and self-initiated system is a special case.

The women did not complain one single time about being poor. Instead, they were proud about their achievements, showing the stocks of goods and items purchased with the latest loan, and estimating the profits they will make within a month. Diasso Yago Nana, a mother of nine and a grandmother of one, was excited to take me to her home to tell me her story.

“In April I secured a 100.000 francs cfa (€153) loan to buy plastic buckets,” she said. She went on to show a firewood-saving cooker she bought with the 25,000 franc cfa (€39) profit she had made.

“I will use it to process shea nuts into butter,” she added.

From previous loans, Nana said, she had purchased large cooking pots for shea nut processing and a TV antenna to be able to watch the national television station.

Enhancing homegrown initiatives

The Nankouloubou association’s self-initiated and self-run initiative shows that microcredit is, indeed, one important way to eradicate poverty. Unlike the bank-based microcredit counterpart, this completely homegrown solution presents a number of challenges. The association-based microcredit is manually managed, which raises issues of accuracy and exposes the entire process to calculation errors. Idayatou, the treasurer, trusts her three notebooks – one for contributions, one for loans, and one for reimbursements – and her own calculation skills. From the three notebooks and the manual calculations of the percentage of all the reimbursed and still-running loans, she managed to estimate the entire amount in circulation.

“The amount the women mentioned is erroneous,” said Tagnan Matias, a micro-economist assisting shea nut-collecting women’s associations within their umbrella federation, Nununa. Checking from his own notebook, he said: “Instead of €850, it is rather €722 in terms of capital accumulated from contributions.”

One of Matias’ tasks at the Nununa Federation level is to set up similar internal microcredit systems within all 103 associations in the federation. So far, only 49 have been running similar funds, managing them manually. As a consequence, the associations might be working with inaccurate figures, as they can’t accurately figure out how much money is available for new loans.

The Hague-based International Institute for Communication and Development (IICD), for which I work as country manager for Burkina Faso, is planning to look into ways in which it can enhance that internal microcredit system using information and communications technology (ICT). IICD already supports the Nununa Federation, to which shea nut-collecting women associations belong, with ICT.

This article was first published in UNIDO’s Making It magazine.