Small Loan Scheme for Women Entrepreneurs

FONAA has designed this program to assist women who are extremely poor and cannot meet the minimum standards to qualify for a loan from a microfinance company or the government’s MASLOC program.

Usually a loan from a micro-finance company requires collateral and guarantors. However, the poor in Ghana have neither the collateral nor guarantees making it almost impossible to get financial assistance from financial institutions.

FONAA has step in to help women who fall into this category, by scoring below the minimum standards of micro-finance companies. FONAA works with those who have been rejected by micro-finance companies and others those under extenuating circumstances. If a woman is single, has children and lacks high school education, then FONAA can assist such a woman if the she can learn to sell cooked food at a retail stand or sell food in the market.

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FONAA will capitalize a woman in this situation with $100 for the woman to start selling onions, plantains or cooked rice. The idea is to provide the woman an income of about three dollars a day by buying food, cooking the food and selling the food at a retail stand. At the end of the day, this woman has sold the food prepared and her $100 is back together and she takes the profit.


This process repeats daily as the woman is taught how to budget and save when she has a little more than her daily needs.

A woman could go to the market and buy a bag of onions for $30 and then go into the neighborhoods and sell the onions at retail in small bags at $1 each. At the end of the day, the bag of onions are sold and the seller has realized a profit of $3. The next day this woman goes out and buys another big sack bag of onions and the process starts all over again.

The application process for this loan program is simplified and the woman can apply via voicemail since the woman in this situation most likely lacks high school education. The woman will call and express an interest in the FONAA loan program. The lady is interviewed over the phone and asked to provide five individuals for character reference. The references are contacted to ascertain information collected so far.  At the end of the interview, this woman is asked to send a picture via mobile phone.

FONAA collects all the information needed for the application process over the phone and verifies that the applicant has a registered phone number, an identity card or some receipt from a service that she paid. FONAA accepts a doctor’s office receipt as proof of identification since some woman might not have funds to apply for government health insurance id.

FONAA employee discusses with the woman the type of business interested and the plan to pay back the loan. FONAA will review the information collected for truthfulness and then decides to lend or not to lend. If the information provided is accurate and the woman agrees to get some training on budgeting, the woman is approved and $100 is sent via mobile money to the woman.

The woman agrees to send a text message daily to FONAA showing the cost of items purchased daily and amount of daily sales. FONAA collects this info and develops a daily log to monitor progress and sustainability of specific loans.

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The table shows that extreme poverty is still exists in many parts of Africa and it is the hope that this program initiated by FONAA will get additional funding to support more vulnerable women across Africa.

It is important to realize that the definition of poverty varies among nations. In the rich nations, the level marked as poor could be way better than in Africa.

Nevertheless, the levels of poverty are way too high across Africa and poverty in Africa demands a new focus and attention for African countries to benefit from Africa’s push for democratic reforms. According to the World Bank, unless major interventions are initiated, 90% of the world’s poor will live in Africa by 2050.

This means that the impact of Covid-19 cannot be measured solely in the number of deaths as Africa has seen much more lower numbers. However, Covid-19 has exacerbated the plight of the poor in Africa.

In 2015, the WB defined international poverty line as $1.90 per day.

Ghana has a minimum wage of about $2/day, effective January 2020.

Poverty dynamics show that people who are poor might not even be born into families below the poverty line but descends into poverty later.

This is the goal of FONAA to help families above the international poverty line.