Ethiopia: A Closer Look at Value-Added Microcredit

In recent years, microcredit has been touted as a revolutionary means for helping poor people - even as a solution for global poverty, period. Indeed, the practice of lending the poor (those unable to join commercial banks) low - or no - interest loans to start their own businesses has transformed untold lives, freeing huge numbers of people from poverty. As the effectiveness of microcredit becomes more publicized, the number of agencies offering the poor lending services increases. This is good - and it would be great if all agencies operated with the highest possible standards.

What is the best form of microcredit for the poor? We believe that loans can do much, much more if they are paired with social support. For example, this is how our Ethiopian colleagues describe the support that they offer to women who join their credit groups:

• Basic Business Skill Training: Covering income generating activities, money management, marketing assessment and other skills relating to small scale business.
  
• Literacy program: Arranged for those women who can not read and write in order to make them literate and help them to calculate basic mathematics and work effectively their business calculations.
• Self esteem training: This is a training to direct the thinking of the women so that they can develop positive attitude about themselves and value them selves accordingly.
• Nutrition training: This training basically focuses on the use of different food items and how to cook a healthy and nutritious food. Moreover personal hygiene/reproductive health training was also given for the ladies.

We know that these women will feel equipped to become great successes. We know that the outcomes for these women will be overwhelmingly positive. The extra support that they receive is well worth our investment. It ensures that the loan money itself will be given the best possible conditions for transforming lives.