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Barclays has begun working with traditional banking agents in Ghana as
part of a new programme to loan small sums to poor people.
The UK-based bank is working with local entrepreneurs, known as Susu collectors, to provide loans to market traders and small business owners.
In the Susu system, which has existed in Africa for 400 years, collectors charge a small commission on daily cash deposits made by individual savers. They then return the money to customers at the end of the month as a lump sum.
As part of the pilot project, Barclays Ghana is providing bank accounts for Susu collectors, enabling them to keep the collected money secure. In addition, Barclays is loaning money to collectors to lend on to their clients.
‘Traditionally [in Africa] Barclays has targeted big business and few people, but the logic behind this is that we wanted to start moving downwards and work within the traditional financial system,’ said William Derban, Barclays’ financial inclusion manager.
Barclays is also committing £150,000 ($260,000) for training and awareness-raising. Working with the Susu collectors’ national association and the Ghana Microfinance Institutions Network, the bank is supporting one-day education workshops for low-income savers and is training Susu collectors to manage credit risk. At present, the project involves 100 collectors.
‘The financial inclusion aspect of the programme is the most important part, because it involves changing people’s attitudes,’ said Derban. ‘That’s why financial awareness and capacity building are key.’
James Laing, a development specialist with London-based consultancy Africa Practice, said the scheme is an example of ‘leapfrog development’ because it has applied lessons learned from UK microfinance projects.
‘It would be interesting to see them develop this into a process where they take micro-entrepreneurs and grow them into small enterprises,’ he said.
An estimated four in every five people in Africa have no access to banking services. Ghana’s Susu system is operated by about 4000 collectors, who collect £75million in savings a year.
The UK-based bank is working with local entrepreneurs, known as Susu collectors, to provide loans to market traders and small business owners.
In the Susu system, which has existed in Africa for 400 years, collectors charge a small commission on daily cash deposits made by individual savers. They then return the money to customers at the end of the month as a lump sum.
As part of the pilot project, Barclays Ghana is providing bank accounts for Susu collectors, enabling them to keep the collected money secure. In addition, Barclays is loaning money to collectors to lend on to their clients.
‘Traditionally [in Africa] Barclays has targeted big business and few people, but the logic behind this is that we wanted to start moving downwards and work within the traditional financial system,’ said William Derban, Barclays’ financial inclusion manager.
Barclays is also committing £150,000 ($260,000) for training and awareness-raising. Working with the Susu collectors’ national association and the Ghana Microfinance Institutions Network, the bank is supporting one-day education workshops for low-income savers and is training Susu collectors to manage credit risk. At present, the project involves 100 collectors.
‘The financial inclusion aspect of the programme is the most important part, because it involves changing people’s attitudes,’ said Derban. ‘That’s why financial awareness and capacity building are key.’
James Laing, a development specialist with London-based consultancy Africa Practice, said the scheme is an example of ‘leapfrog development’ because it has applied lessons learned from UK microfinance projects.
‘It would be interesting to see them develop this into a process where they take micro-entrepreneurs and grow them into small enterprises,’ he said.
An estimated four in every five people in Africa have no access to banking services. Ghana’s Susu system is operated by about 4000 collectors, who collect £75million in savings a year.
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