2. Democratic Republic of the Congo: Local bank reaps local benefits (Syfia Grands Lacs)

| June 29, 2009

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Standing in her field of groundnuts, Marie-Rose Bakatuimina recalls that her village used to have many problems. Food was scarce. Housing was poor – in fact, some people were so exposed to the elements that it was practically like sleeping outdoors. The necessities of life were hard to come by. But her rural community has worked together to improve their lives.

Ms. Bakatuimina explains that Fonsdev made all the difference in Dibaya, her community in central Democratic Republic of the Congo. Fonsdev stands for “solidarity funds for development in Dibaya.” It is a bank run for and by rural people. The bank issues small loans, typically to purchase seed or invest in small business.

Mukenge Nsumpi grows taro in Dibaya. She says that locals mistrusted banks in nearby cities. It was difficult for rural people to access loans, even from microfinance institutions. People in Dibaya prefer to collect and manage their own money.

Fonsdev managers are trusted members of the community. Before giving a loan, they assess the reason for the loan and the ability to re-pay. While traditional banks aim to make money, Fonsdev’s primary goal is development.

One of the bank’s goals has already been reached – improving the local food supply. Farmers now have access to the money they need to invest in their crops. As a result, maize, cassava, taro, and groundnuts are abundant at local markets. Since food is abundant, prices have dropped, and food is more affordable. But this hasn’t prevented farmers from earning money.

One couple stressed that Fonsdev has enhanced the status of farmers like themselves. They credit Fonsdev for allowing them to earn a better income. This made their new home of sheet metal and brick possible.

Some villagers have used the loans to start small businesses. One man is now makes and sells hoes, machetes, and spades. He earns a profit, and local farmers also benefit.

Fonsdev was established two years ago. It now has more than 470 members. Leader Kabamba is the treasurer. He explains that Fonsdev tries to be fair when collecting payment, as well as when offering loans. Interest is never higher than 10 per cent. If there’s a problem with re-payment, they try to resolve it amicably.