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Benin: Village savings and loans groups struggle due to COVID-19

It’s almost 11 a.m. on a Wednesday in early July. The sky is darkening and rain is starting to fall. Véronique Ahissou is arranging tables, benches, and chairs in a circle under a makeshift shelter outside her home. She says, “Today not being a market day, the women of our group will be able to meet. Hopefully, the rain doesn’t add to the coronavirus to stand in the way of the meeting.”

The 50-year-old Mrs. Ahissou lives in Dangbo, a village 50 kilometres from Cotonou, the economic capital of Benin. She’s the president of Gbénonkpô, a village savings and loans group. It’s one of 2,000 such groups that are supported by the international NGO, CARE.

Since the coronavirus crisis began, only 10 of the 16 group members have been able to meet. The women in the association are no longer able to pay the tontines, or regular contribution, of 200 FCFA ($0.36 US) and the group is no longer providing members with loans. The women also struggle to contribute the 50 FCFA ($0.09 US) intended for the solidarity fund.

These village savings and loans groups function as a social and economic safety net. The women organize tontines that they can loan out. They use the loans to finance small business ventures, including purchasing rice, pasta, maize, and other products that they re-sell. With the proceeds, they can continue to pay the tontine and provide for their families.

Group loans are repaid after three months at a 5% monthly interest rate. The interest helps maintain the revolving loan process for the benefit of all members. And the solidarity fund allows the group to assist members in difficult situations.

But the coronavirus pandemic has slowed the women’s ability to earn income. Mrs. Ahissou explains: “Because of COVID-19, our businesses don’t make money like they used to. So we have reduced the size of loans from 15,000 FCFA ($27 US) to 5,000 FCFA ($9). Everyone takes the amount they can pay back. Before the crisis, the largest sum loaned was 40,000 FCFA ($72 US).”

The borrowed funds are pumped into small businesses, but the slump has prevented women from paying off their loans. They are reluctant to take more loans even though they need money to support their families and pay the tontines. It’s a precarious situation.

Emilienne Hounton is the secretary general of another savings and loans group called Mignonmidé. She says, “Last Friday, representatives from the NGO CARE came to question us. We told them that before COVID-19, we were doing it.” But she recognizes that everything is more difficult now and the group members can no longer pay the weekly fees.

CARE is staying in contact with the groups to support their activities and help them prevent the spread of COVID-19. The organization also donated materials for gardening and animal breeding.

Eudes Hougbenou works for CARE Benin-Togo. She says, “Women and children are the people most affected by this pandemic. They are better able to sensitize their family members and their peers on barrier [preventative] measures.”

She adds, “This decision-making is felt much more within their household. The couple must come to an understanding for better management of the family—food, raising the children.”

Masks adjusted, seats well-spaced, the women in the Mignomidé group have gathered this Wednesday at Dangbo. They take turns repeating the precautions needed to protect themselves and their families from COVID-19: “We must remain at a distance of one metre from others, wear a mask, and regularly wash our hands with water and soap.” These reminders are a regular part of their weekly meetings.

They are also starting a new enterprise making affordable, homemade handwashing devices. Faced with the scale of COVID-19, the groups of village women want to benefit from microloans that allow them to invest in their income-generating activities. This will help them cope with the consequences of the crisis.

This resource is undertaken with the financial support of the Government of Canada provided through Global Affairs Canada.