The self-provision of micro-credit schemes by women’s group in Chókwè: processes, challenges and outcomes.

Abstract

The majority of poor people in Mozambique have been excluded from getting loans, even from traditional financial institutions since they do not have valuable assets or credit histories to enable them to be legible from those loans. As a means for facilitating alternative financing, a growing number of Non-Government Organizations (NGOs) in Mozambique have engaged in micro-credit projects in partnership with poor Community Based Groups (CBGs). This allows poor communities to meet some of their basic needs. This dissertation focused on the self-provision of micro-credits by the community grouping from the 4th Neighbourhood in Chókwè district as the selected case study. The aim of this study was to examine and evaluate the effectiveness of micro-credit schemes in alleviating poverty as incorporated with the principles of community development. The study found that the principles of community development are crucial in enhancing the self-provision of micro-credit schemes. The beneficiaries were empowered through small business training to better manage their micro-enterprises. They also participated in the decision-making process since the rules and modalities for the functioning of the micro-credit process and the group administrative structure were established by them. The available local resources enabled a comparative advantage to micro-enterprises process. Although the enterprises run by the beneficiaries are at the micro level, the study found that they are not disassociated with environmental problems. This includes cases such as the destruction of vegetation, erosion of the land and elimination of fish species. The internal and inter district business relations have been favourable to micro-enterprises since the trading partners have equal power relations. The study also found that although the beneficiaries of the micro-credit schemes engaged in the survivalist type of micro-enterprise, they generate an income that satisfies their basic needs in a sustainable manner. Nevertheless, those beneficiaries that ran established fledging micro-enterprises had upwards shift of their household socio-economic status when compared to others. This has resulted in their households to move to horizontal social mobility.