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Microcredit program in Sohag

Sohag is a rural area located in Upper Egypt. In this area, poverty levels are very high, discrimination of women is widespread, female illiteracy is elevated and access to secondary and high school for girls lower than for males. MAIS is presently one of the few international NGOs working in that area with a Community Development Program in collaboration with the local CDAs in different targeted villages.

MAIS supports CDAs to develop sustainable community structures and to deliver services to vulnerable groups, in particular children and women, combining the provision of economic support with services such as gender awareness. The program engages in a whole range of welfare activities and consciousness-raising programs and targets mainly women head of households, widows, divorced and abandoned women. The women are given advice regarding gender awareness, such as family planning, first aid, personal and community hygiene and so on. It also offers a microcredit scheme with the main objective of avoiding a minimalist approach because, from the NGO perspective, it is limited to credit provision and, in this way, it inhibits the opportunity to reach an effective social empowerment.
The microcredit program carried out by MAIS in Sohag, started in March 2004 in two CDAs and, after six months, it has been expanded to a total of six CDAs: Es-Sawama’a, Bani Zaar, Siflaq, El-Khiyyam, Sohag and Hawawish. Currently the program added four villages' Edfa, Juhaina, Gerga and Elmonsha.
Purpose of credit program is to create a mechanism that provides targeted beneficiaries with sustained access to small loans, thereby improving their potential to engage in economic activities and improve their standard of living and that of their families.
Loans are given to women, in general, who are:
- Heads of their households
- Have the Egyptian Nationality.
- Are permanent residents in the villages covered by the project
- With an age between 21 and 50.
- Has no access to other credit program.
- Willing to start or expand an income-generating business and who would work full time (neither a public nor private sector employee).
- having a guarantor who knows the woman, relatives, friends or neighbours)
- Has an official document (ID)
Loans are disbursed only after investigation in the applicant's village about their reliability and trustworthiness, and after the analysis of their project by the Board of the program. The women then have to sign notes payable correlated to each payment amount plus the interest, according to the agreed repayment schedule. Also the guarantor has to co-sign the loan contract.
The program relies on a grant from the Italian Cooperation to finance the portfolio of about 380,000 EGP from Debt Swap. The program relies on two bank accounts, one for the principal and one for the interest.
The economic activities financed by the program are:
- Animal husbandry
- Commercial
- Handicrafts
The first activity is the one in which beneficiaries are mostly involved (82%), while commercial activities cover a percentage of 15% and 3% finances handicrafts.
Number of beneficiaries according to last update in June 2013 is 2271 women.
MAIS used to evaluate the impact of the program on the beneficiaries through questionnaires and focus groups discussion. It is important to perceive the feelings and satisfaction of the beneficiaries towards the program, also in order to be able to tailor it according to the needs they express. The factors influence the loan use, such as the initial resource base of the client, the number of the family members and their ages, the health of the household members, the type of business chosen, the woman power in the decision making, the amount of the loan, and the period of time participating in the program. All these aspects, in some way or another, can affect impact, creating different results.
For example, the length of time in the program affects the outcome. For almost all significant impacts, the magnitude of impact is positively related to the length of time that clients have been in the program. Obviously the impact on the women’s life is different. In general, after the loan, it has been noticed that, in some extent, the woman’s role in decision making has changed: now she has something to say at home, she brings income like her husband does. Therefore, she decides by herself how to spend the money without asking any permission to her husband. The big change is related to the possibility of the woman to contribute to the family expenses and necessities, satisfying concretely her children needs.