Tag Archive for: Small and Medium Enterprises

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Rwanda’s Zamukana Ubuziranenge: Boosting Small Businesses

Rwanda’s Zamukana UbuziranengeIn October 2025, Rwanda hosted the International Organization for Standardization (ISO) Annual Meeting in Kigali, spotlighting the nation’s emergence as a continental leader in “quality infrastructure.” Central to this economic success is Rwanda’s Zamukana Ubuziranenge program, a strategic initiative translated as “Grow With Standards.” By providing technical assistance to small businesses, the program bridges the gap between local production and international safety requirements, fostering a new era of inclusive industrial growth.

The Standards Maturity Model

The implementation of Rwanda’s Zamukana Ubuziranenge utilizes what experts refer to as a “maturity model.” Rather than imposing unreachable global mandates on small entrepreneurs, the Rwanda Standards Board (RSB) provides a tiered trajectory for micro, small and medium enterprises (MSMEs) to progress incrementally. This approach first adapts international standards to suit local realities.

Then it aligns them with global markets as the institutions mature. The program begins with a gap assessment to benchmark current business practices against applicable standards. Following this, the RSB offers customized training and “handholding” support to help staff implement systems that promote consistent quality.

This hands-on guidance prepares businesses for a final assessment and the eventual initiation of the formal certification process. Through this supportive framework, the government ensures that small producers can match their technical ambition with their actual capacity.

Removing Financial Barriers To Growth

A significant political development occurred in January 2025, when the government announced that all quality services under Rwanda’s Zamukana Ubuziranenge would be provided free of charge to MSMEs. These services include technical assistance, testing, calibration and certification. By removing these costs, the state eliminated a significant financial barrier for low-income entrepreneurs, particularly those without access to funding from external development partners or nongovernmental organizations.

Quantifiable Impact on Local Industries

The measurable success of Rwanda’s Zamukana Ubuziranenge is evident in the diverse range of businesses it has supported. By June 2025, the program reached approximately 988 MSMEs and cooperatives. This group comprises 368 enterprises operating in food value chains and 226 businesses in the chemical industry, producing essential items such as soaps and detergents.

The program also supported 94 businesses in the textile and leather sectors and trained 33 cooperatives in transparent grant management practices. Sector-specific results highlight the practical outcomes of these certifications. For instance, the RSB has successfully certified 14 honey products from 12 different companies against international food safety management systems.

These certifications allow Rwandan honey to access wider regional and global markets, increasing the income of rural beekeepers. Similarly, the certification of locally made machinery and mechanical tools reduces field failure rates. It provides a powerful marketing tool for exports.

Fostering an Inclusive Quality Culture

The long-term impact of Rwanda’s Zamukana Ubuziranenge extends beyond technical compliance to social empowerment. The program specifically focuses on MSMEs established by women, young people and individuals with disabilities. By equipping these marginalized groups with the skills to produce high-quality goods, the initiative fosters a culture of self-sufficiency.

Residents in areas like Cyanika have noted that the availability of affordable, quality local products reduces the need for community members to seek supplies across borders.

A Regional Leadership Strategy

Rwanda’s hosting of the ISO Annual Meeting 2025, themed “United for Impact,” reflects its position as a regional hub for innovation and trade. The country has developed and adopted more than 2,250 international standards to date, which support socioeconomic activities and open doors for Rwandan products in global markets. The global community recognizes this commitment to quality infrastructure as a “hidden foundation of prosperity” that helps developing nations escape the cycle of low-quality production.

The future of Rwanda’s Zamukana Ubuziranenge appears promising as it continues to integrate local businesses into the formal economy. Indeed, by prioritizing standards as a tool of industrial policy, Rwanda is demonstrating how technical excellence can drive sustainable development and poverty reduction. As more MSMEs achieve certification, the nation moves closer to its goal of achieving self-reliance and global competitiveness, proving that standards serve as a springboard for inclusive growth.

– Elena Cárdenas

Elena Cárdenas is based in Monterrey, México and focuses on Global Health and Politics for The Borgen Project.

Photo: Flickr

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COVID-19 and Poverty in Kyrgyzstan

COVID-19 and Poverty in Kyrgyzstan
Nestled in the mountains of Central Asia, Kyrgyzstan has long suffered from high poverty rates and underdevelopment, but the past decade saw Kyrgyzstan’s per capita GDP rise by nearly 50%. The COVID-19 pandemic has halted progress, however, with 700,000 people in Kyrgyzstan sliding into poverty from 2019 to 2020. COVID-19 and poverty in Kyrgyzstan are interlinked in several ways.

An Economy Based on Remittances

The World Bank classifies Kyrgyzstan as a lower middle-income country with a per capita GDP of about $1,200. Much of Kyrgyzstan’s national wealth comes from remittances, especially in rural areas, from which migrants move to work in Russia, Kazakhstan and Turkey. In 2019, citizens abroad sent back nearly $2.5 billion, or 30% of Kyrgyzstan’s GDP. Official statistics show that without remittances, Kyrgyzstan’s 2019 poverty rate would have increased by more than half.

At the beginning of the pandemic, many migrant workers returned home, cutting off remittance flows that kept rural families alive. Others stayed abroad but sent family home, increasing the burden on Kyrgyzstan’s rural residents. Due to the informality of their work, many migrants lost their jobs during the pandemic and did not qualify for the government aid that other more protected workers qualified for.

Rising Food Prices

In 2019, the World Food Programme (WFP) reported that 46% of the Kyrgyz population did not meet their daily calorie needs. From June 2019 to June 2020, food prices rose by 17%, pushing even more vulnerable households into food insecurity and highlighting the correlation between COVID-19 and poverty in Kyrgyzstan. During the same period, the price of flour increased by around 30%.

Kyrgyzstan’s poverty levels have close ties to food prices. According to the World Bank, when food prices rise, Kyrgyzstan’s poverty rate follows closely behind. Rising food prices use up savings of low and middle-class people, pushing them into vulnerability.

While faltering remittances largely affected rural populations, the rising food prices have mainly increased urban poverty in Kyrgyzstan. While those in rural areas have access to farms, urban residents in poverty require assistance to meet their basic food needs. Food imports that fed urban populations fell due to Kyrgyzstan’s weakening currency, hurting low- and middle-income people in cities.

In March 2020, to combat food insecurity, the government instituted price caps, took legal action against companies raising prices and handed out food to vulnerable citizens in urban areas. In April 2020, nearly 95% of households in Bishkek received aid from the government, while in rural areas, 26% received aid. The government’s efforts mitigated the worst of Kyrgyzstan’s increased food insecurity.

Informal Labor

Before the pandemic, informal employment accounted for 71% of all employment in Kyrgyzstan, a large cause of poverty. Informal workers, usually in the construction, trade or industry sectors, usually have no contracts with their employer, increasing their risk of exploitation. During the pandemic, as unemployment rose, informal employees found themselves without the same social protection systems and labor rights as formal employees.

The construction industry, one of the largest sectors of the Kyrgyz economy, employs an especially large amount of informal labor. Due to falling investment and government restrictions, the construction sector has suffered particularly badly, with business owners reporting major drops in employment.

The Government and World Bank Assists

Since the beginning of the pandemic, the World Bank has created three assistance programs totaling $88 million to combat the effects of COVID-19 and poverty in Kyrgyzstan. The programs target both urban and rural poverty, focusing on food insecurity, the environment and low wages.

One of the programs, the Emergency Support for Micro, Small and Medium Enterprises, is providing $25 million in microloans to small and medium-sized businesses suffering from the effects of the pandemic. With a focus on entrepreneurs, this World Bank program aims to help modernize Kyrgyzstan’s economy and workforce.

The World Bank also implemented the Social Protection Emergency Response and Delivery Systems to protect those most at risk of sliding into poverty. This response includes grants for vulnerable families with children and enhanced unemployment insurance for workers across all economic sectors. In the long run, this program will focus on developing income-generating skills in order to make the benefits of relief sustainable after the pandemic has passed.

The World Bank’s third program, the CASA-1000 Community Support Project, will fund small infrastructure projects across Kyrgyzstan. Community members will define and carry out the projects so that each locality has its needs met. The program will support projects in every sub-district, ensuring widespread impact.

The World Bank also supplied emergency funding for Kyrgyzstan’s healthcare system, with $12 million delivered as of March 2021. The funding helped the country acquire 266 hospital beds, 26 ambulances and 342 sets of breathing support equipment, along with funding for medicine, PPE and other supplies necessary for combating the pandemic.

Progress and the Road Ahead

As of July 2021, more than 2,000 Kyrgyz had died of COVID-19 and more than half a million have entered into poverty. The government, in partnership with the World Bank, has taken action to fight both the health and economic effects of the pandemic. New legislation and World Bank programs aim to bring Kyrgyzstan through the pandemic with a stronger economy and a less vulnerable population.

– Justin Morgan
Photo: Flickr

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Fighting Poverty with Cobots in Developing Countries

cobots in developing countriesAutomation has often been discussed as the enemy of progress, taking jobs and resources away from low-skilled workers. However, recent reports suggest that cobots offer a compromise for small- and medium-sized enterprises (SMEs), particularly in the developing world. Though the effects of widespread use remain to be seen, the use of cobots in developing countries has already had positive effects, according to leading Danish robotics company Universal Robotics (UR).

What Are Cobots?

The first cobot (collaborative robot) was invented in 1996 by J. Edward Colgate and Michael Peshkin, both professors at Northwestern University. At the time, the invention was called a “programmable constraint machine.” Since then, human beings in companies across the world have been working alongside cobots, using the machines’ superior strength and accuracy to enhance processes from surgery to crop harvesting. Cobots differ from robots mainly in that they are not dangerous; they are much smaller and lighter and can work in close proximity to people. They are also not pre-programmed, and they can be trained to complete a process repetitively and even refine their abilities, improving as they go.

Cobots represent a growing industry worldwide, having generated $580.8 million in 2018. This growing industry, UR says, is expected to be worth over $9 billion by 2024. The industry is also relevant in developing nations such as Malaysia, where experts expect the use of cobots to increase.

Challenges to Manufacturing in Developing Nations

Emergent economies often struggle to match already-developed areas of the world in terms of productivity. Human labor alone cannot exceed the work done by human-cobot teams because of the advantages in strength and accuracy that cobots offer. Many poorer nations are not prepared to front the ever-increasing cost of feedstock, while also using devalued currencies to invest in technological solutions. On the other hand, they cannot afford to keep doing things the same way, says UR. Cobots offer crucial innovation that doesn’t empty the coffers.

From “Dull, Dirty, Dangerous and Dear” to Dynamic Careers

Popular culture often presents robots as adversaries; movies and books narrate universal fears of robots taking over human life and livelihood. But many of the jobs lost to automation, such as jobs in mining and sewage, fall into categories that are sometimes referred to using the four D’s: dirty, dangerous, dull (demeaning) and dear (expensive).”

Cobots can help reduce workplace injuries involving heavy and repetitive lifting, for example. And since cobots specifically require a human partner in order to be effective, using cobots does not necessarily result in the loss of a job. In fact, it could mean just the opposite: training people to operate cobots frees them from mundane tasks, making them more qualified, a phenomenon known as “upskilling.” This results in a more knowledgeable workforce whose lives are enriched by more fulfilling careers. In this way, cobots in developing countries can be part of the solution, not the problem.

Darrell Adams, the director of UR in Southeast Asia and Oceania, said of cobots: “Tomorrow’s workplaces will be run by highly skilled workers assisted by intelligent devices. Cobots help to automate and streamline repetitive and potentially unsafe processes, thus ensuring a safe work environment while increasing productivity and efficiency.”

The Successes of Cobots in Developing Countries

Cobots in developing countries have already had a degree of success. For example, in India, one automobile parts manufacturer, Craft and Technik Industries (CATI), saw the urgent need for more precision in its operations. A workforce deficit meant that manual work often resulted in errors and waste. However, after the addition of a UR cobot used to perform quality control, the company stopped experiencing these errors. At the same time, production jumped by 15-20%.

UR believes that cobots could offer up to a 30% boost in manufacturing output of SMEs in developing countries such as Malaysia. According to UR, as of 2020, most Malaysian companies automate less than half of their operations. This could be because industrial robots are simply too expensive for SMEs to afford.

Smaller, more practical cobots in developing countries make better financial and logistical sense because they are easy to put to immediate use, without causing invasive stoppages in production for installation. “With the assistance of cobots, local manufacturers can achieve higher levels of efficiency and rapid productivity gains,” said Adams.

According to UR, companies that have opted to automate their processes using cobots can slash production errors while boosting productivity by as much as 300%. For SMEs in the developing world, though, the most compelling evidence is in return on investment (ROI). Companies who have recently signed on to cobot technology can achieve ROI in about a year.

Automation and Policymaking

It is clear that developing nations will have to confront how to “upskill” workers in a way that accounts for socioeconomic differences and the gaps in access those differences can cause. In some countries such as Thailand, policymakers have already convened to form organizations dedicated to developing automation industries while equipping workers with the skills needed to keep up with those advances. But some economists are skeptical that this would be the norm in most countries, and propose a government-provided basic income for those who have lost employment. Whatever the case, with robots already here to stay, it seems clear that cobots in developing countries offer the happy medium that these countries need to compete in an increasingly automated world.

– Andrea Kruger
Photo: Flickr

Economic Growth Increases Credit Access In Uzbekistan

credit access in Uzbekistan
Uzbekistan is setting strong economic precedents for the European and Central Asian region. New supportive legislative policies have increased government spending on education and training programs. Global economists argue this is one of the main reasons Uzbekistan’s GDP has increased by more than eight percent the past three years.

Recent economic success is also attributed to growing economic freedom allowed by a currently changing Soviet-style economy. Uzbekistan has the most diversified economy in Central Asia. This provides an increase in GDP per capita, which has been increasing steadily over the past three years as well. Improvements in GDP per capita are strong indicators of improvement in personal living standards.

At present, the service sector accounts for about 45 percent of GDP. Examples of common Uzbekistan services include car repairs, the medical industry, teaching and the food industry. Not far behind services lies industry and agriculture. Uzbekistan is the world’s fifth-leading cotton exporter and seventh-leading producer.

Economic projections for the private sector show a steady increase over the next few years. Fiscal space in the government budget allows the economy to increase stimulus without increasing public debt. This leaves the public to continue growing in wealth while working simultaneously to steadily boost GDP.

The Banking System

Credit access in Uzbekistan is likely to increase due to recent banking growth. More money circulating through the Uzbekistan economy raises banking lending power. In the past, Uzbekistan banking systems limited access to foreign investments due to governmental regulations. Almost all money contributed had come from the domestic system.

Exclusive banking provided benefits such as domestic accountability. An increase in Uzbekistan credit access relied on loans by the population. Other past pros to this system included resilience to global financial crises. Banks proved most effective in 2014 when domestic capital injections provided immunity from failing global counterparts.

This, however, has changed in 2018. Total banking capital increased 26 percent in 2014, and this year banking directors met to discuss boosting central bank interdependence with foreign allies to target foreseen inflation rates.

Banking directors continue to emphasize the importance of regulation to create and maintain a newly inclusive baking system. The new system would include an interactive global policy regarding foreign loans and cooperation.

Personal Credit Access in Uzbekistan

Smaller banking also influences credit access in Uzbekistan. A closer look reveals smaller economic changes, some of which include assistance from the International Finance Corporation (IFC). The IFC is a member of the World Bank and works to improve business in the private sectors of developing countries.

Private sector investments from the IFC have improved credit access in Uzbekistan in several ways. For example, the financial Markets Infrastructure Program (2009 to present) aims to create and improve credit information sharing. Members of the public can now receive an accurate prediction of loan repayment possibilities.

The current program also educates possible loan participants on formal risk factors associated with taking a loan. The certification for financial institution employees is the most prevalent in this project, as it allows job creation while creating a more knowledgeable private sector.

The Mortgage Market Development Project also instituted public credit access in Uzbekistan by improving mortgage lending procedures in local banks, made possible through set lending practices. Both programs continue today, allowing the general public higher access to jobs, loans and savings options.

Strong Projections

Expansion into the global economic sphere is a huge step for Uzbekistan, as previous years of Soviet-style economics would not have allowed this type of growth. Compared to its European-Asian counterparts, the Uzbekistan economy is at the forefront of balance and diversity.

The shift from exclusive banking to possibly inclusive is a prime example of the forward economic thinking propelling the country forward. Further improvements to liberalize the Uzbekistan economy, establish rule of law, social safety, constructive foreign policy and personal banking are also paving the way for success in the coming years.

– Logan Moore
Photo: Flickr

Three Companies That Use Franchising to Fight Poverty

franchising to fight povertyThe concept of franchising is not new. But for most people, the word “franchising” only brings up images of fast food restaurants. This is not a surprise; food giants like McDonald’s remind consumers of how impactful franchising can be. But the impact of franchising stretches beyond the food industry. Franchising has worked for countless industries, ranging from pet supplies to hair salons.

With the benefits that franchising provides, it is not hard to see why. The training and resources that franchisors offer make starting a business much easier. A complete business model helps offset the risk of failure. For many, this makes the dream of entrepreneurship a reality.

In the developing world, franchising can be a powerful force as well. The business systems that franchising provides are a framework for success. With more citizens owning businesses, empowerment is inevitable. For these three businesses, the usefulness of franchising to fight poverty is clear.

Jibu Uses Franchising to Fight Poverty

In Kenya, Rwanda and Uganda, Jibu uses franchising to increase water access. The company establishes storefronts in communities that lack adequate clean water. The storefronts use filtration to produce and provide water to those that need it.

In addition, the stores provide a path to entrepreneurship. Franchisees start off with a micro-franchise business. These businesses distribute (but do not produce) clean water. This allows the franchisee to become accustomed to running the business.

Throughout the process, Jibu provides training and support. If successful, a full franchise with on-site filtration is set up. Franchise owners can then produce and distribute clean water. Despite the greater effort, allowing business owners to become accustomed to running a store is a key part of its strategy. And since the average Jibu business owner breaks even in three months, the effort is worth it. With the Jibu model, using franchising to fight poverty is a reality.

Fan Milk Limited

The model of franchising in developing nations is not new to Fan Milk Limited. Established more than 50 years ago, this company sells ice cream products in Ghana.

Business owners set out on a bike each day and distribute product throughout the country. The vendors bike to a central depot to pick up the product. After this, they bike around various routes in their region to sell the ice cream treats.

In the case of Fan Milk Limited, biking is profitable. With this business, the average franchisee breaks even in about two weeks. This provides a lifestyle benefit, as well as a clear use of franchising to fight poverty.

Like Jibu, the franchisee can expand. Vendors can fund their own depots with greater investment. This provides a host of opportunity for Fan Milk Limited business owners.

Mr. Bigg’s

In the case of Mr. Bigg’s, the benefit provided by franchising is less direct. This Nigerian fast food chain, owned by UAC Restaurants, is a favorite in the country. With the franchising model, this company has managed to expand to more than 150 locations.

The effects of Mr. Bigg’s are far-reaching. The franchised restaurants provide meaningful employment to 6,000 Nigerians. Having income helps to lift Nigerians out of poverty and improves their quality of life.

On top of this, the restaurant owners receive extensive training to help them succeed. These tools aim to ensure that the businesses thrive. The average Mr. Bigg’s restaurant owner breaks even between 24 and 30 months after opening. And when businesses succeed, the country as a whole does, too. With its model, Mr. Bigg’s uses franchising to fight poverty.

Whether with water, ice cream or fast food, franchising brings results. Franchising implements a system of support that helps business owners find success. In developing nations, this concept can drive concrete change. Jibu, Fan Milk Limited and Mr. Bigg’s show exactly that. For these companies, franchising is more than smart business. It is the right thing to do.

– Robert Stephen

Photo: Google

Credit Access In Burkina Faso Is Slowly But Steadily Improving

credit access in Burkina Faso

In Burkina Faso, a landlocked country in West Africa, access to credit is very limited. Around 44 percent of the population lives on less than $1.90 a day, only 15 percent of the population has access to a checking account and a mere seven percent of the population has access to banking services.

But the scarcity of credit access in Burkina Faso is more reflective of the country’s socioeconomic structural barriers rather than a systemic lack of capital. The banking system is regulated by the Centrale des États de l’Afrique de l’Ouest (BCEAO) and is comprised of 12 commercial banks and five specialized credit institutions, and as of June 2011, the majority of these banks met the new capital regional requirement of CFAF five billion.

But credit access is generally concentrated to a few large clients, with collateral requirements and high interest rates of 10-12 percent, preventing the majority of small and medium sized borrowers from participation. Pervasive gender inequality especially exacerbates these high barriers of access for women. Women are typically confined to lower paid informal sector jobs (such as subsistence agriculture) and there is no legislation prohibiting discrimination in access to credit based on gender or marital status.

However, the recent implementation of microcredit initiatives has helped lower these barriers to credit access in Burkina Faso, especially for women in rural areas. One of these programs is part of the Victory Against Malnutrition Project (VIM) that works with 200 villages in the Sanmatenga province and is funded by USAID’s Office of Food for Peace, implemented by ACDI/VOCA, Save the Children and three local NGOs. For example, in 2015 through a partnership with the microfinance institution Caisse Populaire, VIM brought financial agents to the village of Ouintokouliga and offered education and access to financing options.

For village resident Nobila Koroga, access to this additional capital allowed her to buy more animals on her farm which, in turn, generated enough extra produce and additional income to create food security for her household, pay her children’s school fees and cover unexpected issues such as family medical visits. This is especially significant considering that Burkina Faso’s human development index ranking is one of the lowest globally and the country is especially challenged by low levels of education and healthcare.

As Koroga’s experience demonstrates, credit access is a crucial asset in socioeconomic development and empowerment. The government of Burkina Faso has recognized this and is making financial inclusion a priority, as outlined in a recent IMF report.

One of the goals of the government’s four-year National Plan For Economic And Social Development, which went into effect in 2016, is to bring broader banking service utilization rates to 35 percent by 2020. This will begin to be implemented in 2018 through the national inclusion financial strategy, which, alongside further expanding microcredit initiatives, also emphasizes mobile banking and the reduction of administrative barriers.

Additionally, on March 14, the IMF approved a three-year arrangement with Burkina Faso under its extended credit authority, totaling $157.6 million in support of these initiatives. While credit access in Burkina Faso, and banking more broadly, still has a long way to go in terms of inclusion, the success of these international collaborative microfinance initiatives and the country’s broader long-term strategy demonstrate it is embarking on a path toward success.

– Emily Bender

Photo: Flickr

Continued Progress for Credit Access in Bolivia

Credit access in BoliviaCredit access is considered a key driver of economic growth and poverty alleviation, capable of granting the poor and small businesses the funding necessary to invest in their future. In the past, credit access in Bolivia has seen an expansion through innovative commercial initiatives and through recently imposed laws, Bolivia’s government has sought to encourage the expansion of credit in the country and to direct it toward productive and socially useful sectors.

In one respect, the story of credit access in Bolivia has been particularly influential: commercial microfinance. When BancoSol, originally a charity sponsored by Acción Internacional, transformed itself into a microfinance commercial bank in 1992, it became the first chartered microfinance bank in the world.

The transition showed the country that microfinance could function without the largesse of nongovernmental organizations and within a commercial environment. Significantly, by proving this model was feasible, it provided a meaningful lesson for international observers.

Since then, the country has continued to burnish its legacy of credit initiatives in microfinance and beyond. It has consistently ranked highly in the annual Global Microscope, a report prepared by the Economist Intelligence Unit (EIU) that assesses the regulatory environment for financial inclusion in 55 countries.

In 2016, Bolivia ranked thirteenth of 55 and sixth of the 21 Latin American and Caribbean countries included, and in its 2015 report, the EIU highlighted the country’s Financial Services Law (FSL) as a key in moving toward greater financial inclusion. Whether the FSL, enacted in 2013, will achieve all its goals is yet to be determined, but evidence to date suggests the government’s initiatives have had their intended effect.

The law, among other objectives, mandates credit quotas and interest rate caps to encourage lending to designated productive sectors and social housing. This requires banks and other financial institutions to extend a minimum share of their credit toward these objectives at an affordable rate. A 2015 report by the International Monetary Fund (IMF) found that the requirements were spurring progress: total credit reached almost 46 percent of GDP in 2015 from 35 percent in the mid-2000s, and credit directed to the productive sectors and social housing increased 26 percent in the year leading to June 2015.

In combination with elements of the law improving deposit insurance and consumer protection measures, the FSL has laid the groundwork for furthering the expansion of credit access in Bolivia. As the IMF report emphasizes, the Bolivian financial system is fundamentally sound, but the methods employed to increase credit access do not come without risks.

In attempting to lower borrowing costs, interest rate caps can ultimately limit access to credit and hurt bank profitability, while credit quotas can lead to banks’ portfolios becoming over-concentrated and designated borrowers becoming over-indebted, as credit is extended disproportionately to certain sectors. The report stresses that managing these risks will be vital for the country to ensure its expansion of credit is healthy and sustainable.

Overall, from BancoSol’s breakthrough in the 1990s to modern regulatory initiatives, credit access in Bolivia has continued to expand. Given the capability of financial inclusion to economically empower the poor, it is likely to remain an important goal in the country for the foreseeable future.

– Mark Fitzpatrick

Photo: Flickr

Credit Access in Uganda a Success Story in Africa

Credit Access in UgandaThe ability to access credit in various countries is not often a topic of discussion. This issue usually tends to fall by the wayside when discussing various problems of countries around the world, despite the issue being of great importance when it comes to both the financial literacy and economic growth of a country.

In Uganda, credit access is not a pressing issue. The country is among the top six nations in Africa in regards to accessing credit. Credit access in Uganda is very important to sustaining economic growth and helping to alleviate poverty in the country. The increase in financial services for poorer communities can have a huge impact on eliminating poverty in those areas, which will improve the economy of the whole country and help improve financial literacy among the citizens.

Uganda has 24 banks, four credit institutions, a Social Security Fund, 60 private retirement benefit schemes and seven mobile money providers throughout the country. The abundance of credit access in Uganda has helped improve the economic status of the country as a whole, especially for those in impoverished neighborhoods. Financial services are immensely important when trying to improve the economy of a country, and that is what is happening in Uganda. The accessibility of financial services to poor citizens allow them to save money and help both them and the country grow economically.

The security of financial institutions allows the impoverished citizens of the country to feel safe entrusting their money to a bank and allows them to save more money than they would without a financial institution so easily accessible to them. This allows both citizens and businesses to balance their income and manage any financial shocks they may experience in the future.

Uganda is slowly but surely improving economically. The country saw a GDP growth of 4.8 percent in 2016, which is an improvement for the country as a whole. Although not as high as some neighboring countries, it is still progress for Uganda, and hopefully, it will continue to grow.

Currently, the most popular form of credit access in Uganda is mobile banking, with more than seven million users. This is because of the increased popularity and use of technology in the country. More than half of Ugandans now have access to a financial institution. This is a vast increase from 28 percent in 2009. This shows that both financial literacy and economic stability are increasing in Uganda.

As the economy grows, so does the financial literacy of the country. The accessibility of financial institutions makes it easier for citizens to become more financially literate and manage their money better than they have previously. This will continue to benefit both the citizens and the country in the long run, as Uganda become more economically stable because of the number of easily accessible financial institutions that are now operating in the country.

– Simone Williams

Photo: Flickr

Credit Access in Liberia Improving Thanks to Efforts of Central Bank

Credit Access in LiberiaLiberia is a predominantly rural nation. Because of this, the financial literacy of its citizens and the country’s financial institutions are often put on the backburner. This has resulted in credit access in Liberia lagging behind when compared to other countries.

In the country of Liberia, there has not been an effective credit rating system, and many businesses lack the records needed for credit approval. In response to this, the Central Bank of Liberia (CBL) has established a credit reference system that contains credit history and derogatory information about certain creditors. The CBL focuses on delivering financial services to the communities in the country without any services available to them. These services allow these sections of the country to become integrated into the formal economy.

These services include increasing access to medium-term financing, creating an environment for private-sector job creation and improving and empowering the Liberian-owned business segment of the economy. This will help improve credit access in Liberia and allow more citizens and businesses to have up-to-date financial records. It will also improve the legitimacy of those businesses and their credit records.

The CBL has also begun to issue treasury bills in an effort to develop a capital market. This has allowed the country to expand its foreign market, which helps improve the economy of the country as a whole. With the help of the CBL, the financial system in Liberia is steadily improving. This is happening despite the Ebola crisis and external shocks from the fall in international commodities. Liberia is slowly becoming more financially stable, which is helping both citizens and businesses.

Throughout the country, there has been significant progress in strengthening the banking sector. This has included the adoption of a national corporate governance framework and increasing the regulatory capital adequacy ratio and the minimum capital requirements. These changes to Liberia’s banking system have helped improve the effectiveness of financial institutions throughout the country.

The CBL has recently implemented regulations for all licensed insurance companies operating in Liberia. The regulation sets the capital requirement for each class of insurance business. It also requires each company to maintain a minimum amount of capital. This has been implemented in the hopes of strengthening the insurance sector. These regulations have had a positive effect on credit access in Liberia. They help improve the economy of the country and strengthen its finances.

Despite a significant portion of the population still residing in rural areas, the financial institutions throughout the country are helping businesses become more credible and allowing them to maintain their financial records through banks. As a whole, Liberia has greatly improved its banking sector, and is well on its way to being a significant part of the formal economy.

– Simone Williams

Photo: Flickr

Solidarity Lending Benefits the Rural Poor

solidarity lendingFor too long, the plight of the urban poor had monopolized the concerns of those working to eradicate abject poverty. The millions of people in rural poverty have been forced to toil in silence, overshadowed by their urban counterparts and underrepresented by the advocates of economic development. Most are relegated to subsistence agriculture, making the best of what little they have. However, a renewed emphasis on the rural poor has facilitated new and innovative techniques to help, among them solidarity lending.

One such pioneer is SHARE Micro Finance Limited, which offers loans to rural women in India in an attempt to fund entrepreneurship among the rural poor. Recently, a number of studies have been conducted to assess the effectiveness of such programs, with some encouraging results. An article from the Stanford Graduate School of Business tells the story of Vinod Khosla, a venture capitalist from India. Khosla described solidarity lending as a “virtuous pyramid scheme” where groups of women are given modest loans from SHARE. This program differs from individual loans because “the group members are under strong social pressure not to default…and if one person does, the others have to make up for it”.

The program empowers women to invest the money in a stall at the local market or use it to invest in equipment which enables them to produce or transport their items more efficiently. To some, this may seem like only a marginal benefit, but Khosla reports that among nearly 200,000 clients, 77 percent saw reduced poverty.

To test the feasibility of such programs further, a study on solidarity lending was conducted in Mongolia, which compared the results to those of regular lending practices. Research showed that while repayment rates were similar, food consumption increased among group lenders, an encouraging sign to researchers.

Another study on group lending conducted by the African Growth Institute in Kenya revealed that “microcredit is an important entrepreneurial tool in alleviating poverty”. They also found that group lending was a way of achieving greater financial stability.

Because of innovative initiatives like solidarity lending, the rural poor are better equipped to prosper. By providing groups with much-needed access to financial capital, farmers from India to Mongolia to Kenya are no longer overlooked.

– Brendan Wade

Photo: Flickr