Women in rural areas are seen as the backbone of their communities, but they often need a helping hand, writes Jane Steinacker

 

Gladys Sigcau started her business two years ago with her last R20. The resident of Flagstaff in the Eastern Cape was battling to make ends meet.

“I was struggling, I didn’t even have money for church,” says Gladys, who at the time did not qualify for a government pension and was living off “sometimes about R200” that her daughter who lives and works in Durban sent her. She told herself, “I must start something”.

Gladys, who supports another three members in her household, chose to take action. She took her last R20 and bought 1kg of cake and 1kg of chips. She sold these for a small profit and gradually began building a shop in her home.

“I sell lots of cake, chips and airtime, but also some groceries and vegetables.”

She now enjoys a turnover of between R4 000 and R5 000 a month and has to take the 10km taxi route twice a week to the wholesaler to keep up with demand. She spends R40 a week on taxi fare.

“I am so busy,” says Gladys, 60. “Sometimes I get about 30 customers a day.”

Like many businesses, Gladys needed a cash injection to increase her stock levels to attract more customers.

But as a pensioner with no credit history, going to a bank for a loan was not an option. She was able to obtain a R1 000 loan from the Women’s Development Bank (WDB), which, thanks to a generous R12 million donation from Trinco Tea, opened its doors in Flagstaff earlier this month.

Gladys will need to pay back R296 a month for four months, including the 25% interest charged by the WDB.

“They have helped me so much with this money,” says Gladys. “I can now buy more groceries and vegetables and sell them to more customers. My business is now very good.”

Gladys’s next goal is to buy herself a car.

 

 

Gladys is one of the 135 customers of the WDB Flagstaff branch, which has already given out an estimated R59 600 in loans. The bank, pioneered by former first lady Zanele Mbeki in 1991, started with micro loans in Mpumalanga and now has more than 27 branches in total with 35600 clients. The bank operates in Limpopo, Mpumalanga, KwaZulu-Natal and the Eastern Cape. It works on the Grameen banking philosophy, which originated in India and is now seen as a leader in the fight against poverty in the developing world.

The bank only lends to poor women in rural areas, and according to the Eastern Cape’s regional manager, Hezekiel Chiloqive, who has worked with the bank for the last two years, this does make some men unhappy.

But, as Hezekiel points out: “Women pay back, and men don’t. Sometimes when you go to a man to ask for the money they try and bully you.” With a 98-99% repayment rate on loans, it appears this statement is correct.

“We don’t just give out loans,” says Hezekiel. “First we verify the business and the SEP or socio-economic profile of the candidate.” All candidates need to be below the poverty line. The bank then helps the women organise themselves into groups of five. Each member of the group signs surety for the others, so if one defaults on payment, the rest are liable.

The bank then completes a training programme with the women, explaining in detail how the loan works, what the interest amount is, and the terms for paying the loan back. They are also taught basic financial management and business skills to put them on a stronger business footing.

Each branch also has a training facility where the women are taught basic literacy.

The branch uses what they call development assistants to provide further support to their clients. There are six of these per branch and their function is to visit villages in the area of operation and introduce the WDB micro-credit concept. They identify the poorest households who need credit and encourage the women to join the WDB credit programme.

They are called development assistants because they are more than loan officers — their role is to promote the integrated development of their clients.

 

 

The bank extends loans of between R300 and R10000, which are repayable over four, six, nine and 12 months. People with a monthly income below R1068 are eligible for a poverty alleviation loan. This ranges from R300 to R3499. If an applicant has no existing business, then a loan of R500 is disbursed.

The second range of loans are called enterprise loans and these are given to higher-income women who are in the LSM (Living Standards Measure) 3-4 bracket. These loans range from R3500 to R10000.