Grameen principles
The WDB Trust is a Public Benefit Organisation, led and managed by women, that aims to eliminate poverty through financial inclusion initiatives by bringing financial services to the doorsteps of the poor in the most isolated villages of SA.
This is achieved by linking the poorest households in rural areas to finance and development services, as well as training and enterprise opportunities to build productive and sustainable livelihoods for their families and communities. The Grameen principles The WDB Trust is modelled on the principles developed by Nobel Peace prize winner and founder of the Grameen Bank of Bangladesh, Prof Muhammad Yunus. Yunus has dedicated most of his working life to eliminating poverty following his realisation that providing minimal loans, without the backing of collateral, could make an enormous difference in the lives of the poor. This led to the establishment of the Grameen Bank (meaning village or rural in the Bangla language) in Bangladesh. Core to the Grameen principles is the belief that poor people don’t need handouts — but they do need opportunities and access to human rights in order to end the cycle of poverty.
“One of the primary principles of the Grameen system is the concept of group lending,” says Futhi Mtoba, chair of the WDB Trust. In this system, peer support and pressure within the centre plays a major role in the management and repayment of loans within the groups of women who make up the clients of the trust.
The first Grameen Bank project was established in 1976, funded privately by Yunus. The loans are provided to small groups of women. Each woman in the centre is responsible for her part of the repayment of the loan, based on the understanding that, until the loan has been repaid in full, the centre will not be eligible for further loans.
Lending, however, cannot take place in a vacuum and must be accompanied by the transfer of skills in terms of understanding the concept of micro lending, how to use and account for the money, investing it and ultimately paying it back. Then there is also much to be learnt about managing the group, delinquency management, conflict resolution, avoiding gossip, group cohesion, relationship building and impact maximisation.
Mtoba explains how the Grameen process works in the context of the trust, pointing out that the focus solely on rural women has to do with the fact that while there are poverty-stricken communities all over the country, the poor in SA’s rural areas are particularly hard hit. They have no access to infrastructure, phones, ID documents and the like, which makes their situation even more challenging.
“Once a woman has decided to apply for credit, she is encouraged to enlist as many like-minded women from her village (not family, but people who she has known well for two years or more) to form a villagebased centre,” says Mtoba. Each centre consists of up to 25 members and each person is responsible for the approval of the loan activity, the loan amount and ultimately the