Providing Access to Credit for Women

United Nations ESCAP
HRD Section

Providing Access to Credit to Women

Reaching a remote area of Papua New Guinea

The Kui Amps Association Credit Scheme was established in 1989 in the Mount Hagen area of the Western Highlands. This scheme is closely associated with the women's movement in Papua New Guinea, and especially the Western Highlands Provincial Council of Women of which it is a member.

The Association is in itself a Women's Association, with some 100 village women's groups constituting its members, with each of those groups having between 20 and 30 members. While not untypical of developments in many parts of Papua New Guinea, the Kui Amps Association Credit Scheme is widely regarded as among the most successful of such schemes.

The Kui Amps Credit Scheme represents in effect a scheme operated by local women for local women and their families. It is a relatively small but very effective scheme, employing no paid workers and operating with virtually no overheads. It is thus a good example of what can be done by a People's Organization provided with a relatively small grant for credit purposes.

While the Kui Amps Credit Scheme was effectively launched with foreign aid money, the Women's District Councils in this province had been receiving some Government money, which some groups had elected to use in credit schemes. The Kui District was one district which elected to focus on credit, and it sent two of its women to a workshop on credit schemes. That opportunity was critically important in helping the group, to plan its scheme. The credit scheme operates through local women groups, which must operate a savings account into which all members are obliged to make regular contributions.

The local women's groups have been able to establish and operate various community facilities, including at times pre-schools. Such projects are entirely at the initiative of the women, who are responsible for planning, funding and administering the facilities so developed. They raise money for the projects from a community with minimal cash income, borrow the balance and ensure repayments. Most of the loans, however, go to individual group members for income-generation purposes, but the success of these and the structure of the loan scheme ensures that the community as a whole benefit from all projects.

The Scheme got under way in 1990 when the Australian aid agency, Community Aid Abroad, provided them with a K3,000 (4500 US$) grant. This was followed up in 1991 with a further grant of K5,000 (7500 US$). The Association set up a loan committee of ten members who play a vital role in the operation of the Scheme. It established also a Dispute Settlement Authority of four members to resolve any disputes arising.

The basic function of the Scheme, although in effect it does more, is to provide loans to members of its affiliated groups. The loans vary from a maximum of K500 (750 US$) to a minimum of K100 (150 US$) , and are subjected to an interest rate of 25 per cent during their six to 12 month duration.

Initially loans were available only for group projects but this proved to be a financially and socially unsound strategy. The loan scheme was changed to enable individual women to receive loans, provided that they were active members of one of the Association's groups and that 10 per cent of the proceeds went into the group's savings account.

The Scheme provides for loan approvals to be based on a careful market assessment of the project proposed, for diligent supervision of the implementation of funded projects, and for protection against default. In addition, the borrower's membership of a local group represents a local source of support and pressure to repay loans, thus enhancing greatly the effectiveness of the Scheme. Finally, the availability of training workshops for borrowers helps to ensure effective utilisation of their loans. Each of these elements of the scheme is an important contribution to its success.

It is also important to note that the Association was not concerned narrowly with empowering women in a male-dominated social structure. It was very aware of the need to involve the men, despite the fact that the women were the loan recipients and were seen to have the greater capacity to increase the family's cash income. The Association was conscious also of the need to have broad community support, and to this end it ran general community awareness workshops and meetings. These enhanced community awareness and, at the same time, represented a way of educating the male section of participating communities. Second, the Association saw the projects funded as family projects, likely to involve men and often children.

The Kui Amps Association is in effect using a credit scheme of relatively small proportions to achieve a number of ends. First, the scheme draws women together in village groups which constitute an organizational base for awareness-raising, knowledge-building and the initiation of projects. Second, it provides loans to individual women members of these groups and supervises them closely. The supervision process is a supportive and community-building process in itself, while the loan is instrumental in improving the well-being of the family in question.

Thirdly, the successful completion of a range of village projects, enhancing overall well-being. Finally, the scheme generates knowledge and confidence at all levels, which increases greatly the potential of individuals, families and communities, who are not directly part of the scheme, to access and utilize effectively resources and opportunities available to them.

Taken from the publication: “Making an Impact: Innovative HRD Approaches to Poverty Alleviation”, ESCAP, 1997