Credit-Led Micro Finance in Tamale,

8/8/2019 Credit-Led Micro Finance in Tamale,

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Z U H R A A B H A R FA U S T I N A A L I M AT U B R A I M A H

N I C H O L E C H R I S T E N S E NM O H A M M E D D AW U D A M I R I A M S O P I N - V I L M É

Fara Pong:Tamale, Ghana

Credit-ledMicrofinance



Table of Contents

y Backgroundy Project Designy Village Bank Methodology y Operation of MFIy Project Feasibility y Program Reach and Growthy Project Costs and Budgetingy Expected Outcomes

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8-910

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ProjectLocation:

Tamale,

Ghana

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Background: Tamale, Ghana

y Area of focus: Tamale, Ghanay Population: 360,579y Population Density: 318.6/sq Kmy Urban/Peri-Uban ± 67%

y

Trade: Farming (60 % agriculture)y Community development :

U nique feature: Education Ridge ± in the suburbof the city, there are over 20 schools concentrated in this small area(elementary to college programs)

y NGOs operating in region: CRS, CARE, ActionAid, World Visiony Major Religions:

Islam 84%Catholics 6%

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Project Design

Office Location : Opposite TamaleCentral Market

Model : Credit-Led Micro-financeTargeted Outreach : 21,000 peopleProject Objectives:y Extend microcredit to at least 20,000

small business owners over 4 yearsy Provide enterprise development skills

to economically active poorinhabitants of the Tamale Metropolis

Project Products:y C redit & savingsy Entrepreneurship skills trainingy Business development and

management skills training

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Village Bank Methodology

Village Bank ExecutivesChair Person

Vice Chair personTreasurerOrganizer

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Operation of the MFI

MFI

VILLAGE BANK CREDIT

OFFICER

SOLIDARITY GROU PS IN

VILLAGE BANK

Loans/Training

Savings

Loans Savings

Loans Savings

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Project Feasibility

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Desired Client Mix Composition:80% women and 20%men

Economic Activity of Potential ClientsTrading

Food VendingTailoring & Dress MakingBasket WeavingShea Butter Processing ArtisansShoe Making

Current Financing Options Available toPotential Clients:

Money lendersFamily membersSusu collectors



Project Feasibility

Competitors :y Bonzali Rural Bank y World Visiony Management aidy

Mata-N-Tuduy OIC InternationalLiteracy rate: about 60%

Access to financial servicesy About 100,000 are poor people

Potential Partners :y Freedom from Hungery KIVA International

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Program and Growth Plan

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Strategy and growth Year 1 Year 2 Year 3 Year 4original 10 officers/ number of banks per officer 9 12 15 18

Total Number of banks 90 120 150 180Total Number of clients 3600 4800 6000 7200Cumulative growth 3600 8400 14400 21600% of client loans per year (70%, 80%, 90%, 90%) 2520 3840 5400 6480Average loan per person 100.00$ 200.00$ 300.00$ 300.00$

Interest rate 12% 12% 12% 12%

Total interest income 30,240$ 92,160$ 194,400$ 233,280$



Program and Growth Plan

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# of workers

Base Ye arlySalary Ye ar 1 Ye ar 2 Ye ar 3 Ye ar 4

C d O : 300 10 3600 36 000$ 37 440$ 38 938$ $ 40 495

d M S d d:300 3 3600 10 800$ 11 232$ 11 681$ $ 12 149S : 400 1 4800 4 800$ 4 992$ 5 192$ $ 5 399

: 450 2 5400 10 800$ 11 232$ 11 681$ $ 12 149S : 200 1 2400 2 400$ 2 496$ 2 596$ $ 2 700D : 600 1 7200 7 200$ 7 488$ 7 788$ $ 8 099S 1 1800 1 800$ 1 872$ 1 947$ $ 2 025Tot al 73,800$ 76,752$ 79 ,822$ $ 83,01 5



Program Costs ± Startup Costs

S ta tup C sts Numb C st To talComputers 9 350 3,150$Copier/fax 1 500 500$printer 1 170 170$office furniture 700 700$Generator ( ackup generator ) 100 100$Safe 2 100 200$Motor Bikes 10 500 5,000$To tal 9

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Total Program Costs

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Total Co sts:Total Op rati n osts 82,510$ 85,642$ 88,892$ 92,265$

ost of apital 196,560$ 599,040$ 1,263,600$ 1,516,320$ ost of Losses 15,725$ 47,923$ 101,088$ 121,306$ ost of Inf latio n 52,920$ 161,280$ 340,200$ 408,240$

Total osts 347,715$ 893,885$ 1,793,780$ 2,138,131$ Finan ial Suff iciency (inte rest income ) 88,833$ 270,729$ 571,069$ 685,283$ Surplus/De f icit (258,882 )$ (623,156 )$ (1,222,711 )$ (1,452,847 )$ Loa n apital ran ted to Program this yea r 1,020,000 1,020,000 1,020,000 1,020,000

rant Funding Req u ired 1,108,833 1,290,729 1,591,069 1,705,283

C lativ e grant 1,108,833 1,290,729 1,591,069 1,705,283



Expected Outcomes after 4 years

y Extend microcredit to 20,000 small businessowners

y Provide Business Skill and Management Trainingto C lients

y Provide Entrepreneurial Skill Training to C lients

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Credit-Led Micro Finance in Tamale,

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