A ‘win-win’ to fighting African poverty
A micro-credit foundation teams up with the EU bank so that small Africa women microfinance loans can help lift rural people out of poverty.
When Eric Campos thinks about Africa, he takes a long pause before starting to talk. “Africa’s future could be a success or a terrible failure,” he says.
Campos is managing director of the Grameen Crédit Agricole Foundation, a specialist in microfinance for the poorest regions of the world. The foundation believes that small loans are one of the best ways to fight poverty, improve the economy and give women equal rights in developing countries. The foundation does more than 80% of its business in rural Africa.
The Grameen Foundation was created in 2008 by the French bank Crédit Agricole Group and Grameen Trust, a non-profit organisation started by Muhammad Yunus, a Bangladeshi social entrepreneur who shared the 2006 Nobel Peace Prize with Grameen Bank for pioneering the concept of microcredit for the poor.
Improving health care, water supplies and sanitation services is great for rural communities in Africa, Campos says. But his organisation is showing that giving small loans at good rates to women and farmers is one of the best ways to make rural areas sustainable. Small loans help women and children lead healthier lives. Financing for farmers helps a whole community, he says.
“I’m a banker, so I’m showing that we can be economically sustainable about the fight against poverty,” says Campos, who has been working in African finance and development since the start of his career in the early 1990s.
The European Investment Bank approved a €12 million loan for the Grameen Crédit Agricole Foundation. This money will finance loans to microfinance institutions in West Africa. The foundation is active in 38 countries and has granted over €200 million in loans to nearly 90 microfinance institutions worldwide. A large majority of the beneficiaries live in rural areas.
“Our work is deeply geared towards the human dimension, its environment and the sustainable development of economies,” Campos says. “By lending to local institutions, which distribute the money in the heart of their territories, we promote the economic independence of individuals.”
Microfinance must keep growing in Africa and other parts of the world, Campos says, and multilateral institutions need to step up their work. He tries to be optimistic, but “I have to admit that our work is very difficult. We need to increase our means to help.”
The foundation and the EIB are facing the challenge by working together. The European Investment Bank supplies long-term financing at good rates and in local currencies, which is a big advantage for local lenders.
“It’s a win-win partnership,” Campos says. “The European Investment Bank understands what we are doing in sustainable finance, yet they are too big to do the small loans. We can handle the small part, so we need each other.”