Village bankers : the experience of Fandène (Senegal)

Village bankers: The experience of IK Notes Fandène (Senegal) andène, a Serere and Wolof village From culture to agriculture F located six kilometers from Thiès, Senegal in the country’s peanut- For the first fifteen years of its exist- growing region, is the seat of a locally- ence, the AJF concentrated on sponsor- created credit and savings institution ing cultural events that would interest with a remarkable career. It now covers young people in sticking with, or re- 34 villages throughout the region, has turning to, their home community and amassed over thirty million francs CFA would provide, at the same time, a way of capital (around $60,000) and of reasserting cultural identity. Little granted more than 1500 loans to was done with development projects, people in those communities. Yet the but AJF activities did lead to several structure grew essentially from local well-educated young adults taking up responses to the problems of drought residence again in the village and be- and diminishing farm fertility experi- ginning to constitute themselves as a enced throughout central Senegal. sort of “modern” (and critical) peas- Fandène itself is the product of antry. This group grew gradually dis- historical interaction between Serrere satisfied with an AJF program limited and Wolof ethnic groups. The village is to cultural events and with leadership largely Christian and was for years the principally exercised by outsiders. site of a Catholic mission and commu- In 1987, therefore, the Association nity center (“Maison Familiale started on a new tack. Concerned by Rurale”), but it shares the dwindling the cyclical recurrence of food short- resources of the neighboring valley ages in the area, members of the Asso- and seasonal river beds with Islamic ciation began a series of “action-re- No. 6 and animist communities of several March 1999 different ethnic groups. Recent local development initiatives stem in part IK Notes reports periodically on Indig- from the reaction of emigrants from enous Knowledge (IK) initiatives in Fandène to the trauma of the great Sub-Saharan Africa. It is published by the Africa Region’s Knowledge and Sahelian drought of the early 1970s. Learning Center as part of an evolving In an effort to help their home IK partnership between the World Bank, communities, NGOs, develop- community find solutions to the crisis ment institutions and multilateral orga- and to avoid a complete depletion of nizations. The views expressed in this the population, young people who had article are those of the authors and should not be attributed to the World World Bank left for school or work took part in Bank Group or its partners in this ini- creating, in 1972, the “Association des tiative. A webpage on IK is available at http://www.worldbank.org/aftdr/ik/ Jeunes de Fandène” (AJF) — The default.htm Fandène Young People’s Association. 2 search” inquiries with other population groups in the vicinity Resolving the bottleneck of credit in order to better understand the nature of the problem and of possible remedies. Three findings of this locally-conducted The decision was to address these problems by establishing study stood out: some sort of nonformal local savings and loan institution. The beginnings were modest, to say the least: association • The group noted that there were already in fact a host of members each contributed 250 FCFA (about $1 at the time) small initiatives afoot, undertaken by peasant groups them- to a common fund and started making small loans to villagers selves — initiatives which had great promise for diversifying with worthwhile projects, charging the equivalent of 15 per- the local economy and improving the natural resource base, cent interest per annum., while seeking other ways to de- but that had all been hampered by inadequate access to velop their capital endowment. One of these was to expand credit and resources for developing their potential. membership to new communities in the immediate region. • Lack of credit stemmed in good part from lack of collateral Not much marketing was required. The initiative met such a and of an institutional structure that would give the local sorely-felt need that inhabitants of other villages soon got people credibility and clout. wind of what was going on and began themselves inquiring • At the same time, the AJC members studied the nature and about taking part. results of recent NGO-sponsored projects in the same region, In this manner, the savings and loan network gradually concluding that most failed because they were designed else- spread to all 34 communities of the Fandène region and where and were not based on the existing efforts of the local became increasingly well structured. Each branch of the population. institution — 19 in all — was outfitted with a women’s section and a men’s section, and leaders of each were trained in simple accounting, credit worthiness assessment IK Notes would be of interest to: and loan management. Inhabitants of the communities involved were encouraged to make written applications for credit through their local section officials, and leadership of the institution gradually trained itself in carrying out formal Name feasibility assessment of proposed loans and providing would-be borrowers with technical assistance in ensuring Institution the credit worthiness of their ventures. Eventually an assessment team was created to help local savings and loan Address committees learn the ropes of evaluating loan applications and of identifying and brokering responses to the technical needs of small entrepreneurs. Supporting local economic innovation Letters, comments, and requests for publications should be addressed to: The enlarged savings and loan association placed particular Editor: IK Notes emphasis on supporting farmers and small businesses with Knowledge and Learning Center innovative approaches to the revitalization of agriculture and Africa Region, World Bank 1818 H Street, N.W., Room J5-171 the marketing of local products. The following are examples Washington, D.C. 20433 of ventures underwritten in the first five years of operations: E-mail: pmohan@worldbank.org • Women’s producer groups were assisted in developing mar-  3 keting schemes for bypassing middlemen and selling bissap Weaving a new social and economic fabric fruit harvested from nearby forests and baskets made from local plants directly on the Dakar market as well as to other Most impressive, though, were the institution-building village associations of the region. By 1995 a thousand bas- results of these activities and the new horizontal linkages kets a week were being produced in this manner. among Senegalese communities and varied population • The Association granted loans to farmers interested in re- groups that they nurtured. The thirty-four villages of the introducing the cultivation and sale of manioc to the area Fandène area are Christian, Islamic and animist in religious and expanding planting and use of cowpeas. orientation and of varied ethnic composition (Serere, Wolof, • Credit was extended to women’s groups for establishment Bambara, Fulani..). Yet they have worked together very of a soap-manufacturing cooperative and sale of its products. successfully in the creation of new savings and loans institu- • The savings and loans institutions made numerous loans tions and shared governance of their activities and re- for boring of wells, development of irrigated gardening and sources. Women and men’s branches of the association have sale of the produce. exercised equal weight throughout. In addition, the association has developed marketing As activities developed and capital endowment grew, the arrangements with peasant federations in other regions of size and volume of loans also increased. Over the first five Senegal whereby many of their products are sold and many years of operation, average yearly outlays fell into the of their inputs are acquired by this sort of lateral exchange. following categories: Perhaps most interestingly, the Fandène association has created technical teams to provide support to nascent Livestock development and marketing — 5,600,000 FCFA groups in poor neighborhoods of the nearby city of Thiès and the national capital, Dakar that wish to begin their own Small commerce and industry — 2,800,000 FCFA savings and loan programs — reverse technical assistance Improved farming — 500,000 FCFA from rural to urban areas! Well drilling — 500,000 FCFA. Yearly profits from loan administration likewise rose from less than 100,000 FCFA in 1991 to over 700,000 in 1994 and by 1998 the capital endowment of the intervillage savings and loan association had risen to more than 30 million FCFA, or nearly $60,000. This article is based on research conducted by Senegalese researchers with the support and technical supervision of Peter Easton, Associate Professor, Graduate Studies in Adult Education, Florida State University, and with the active collaboration of the concerned African communities. The research was carried out under the joint aegis of the Club du Sahel/OECD, the CILSS and the Association for the Development of Education in Africa (ADEA). 4