By Nicki Goh, KF9 Senegal

Now that I am well into my second month here in Senegal, I thought it was worth sharing a little background on the MFI where I am working.

Senegal Ecovillage Microfinance was set up in 2004 by an American volunteer, John Fay, who was carrying out an economic assessment of the village of Louly Ngogom in Senegal. Following interviews with the villagers, John decided to set up a small micro-loan pilot programme to meet the demand for financial services in otherwise un-served communities. In that first year of 2004, he lent fifteen families just $30 each to purchase peanut seed and received 100% back in repayments. Since then, and with the help of Kiva – whose timely launch in late 2005 saw SEM taken on as Kiva’s 4th ever partner – SEM has succeeded in providing financing to groups in nearly 40 villages.

SEM is the microfinance arm of GENSEN, the Global Ecovillage Network here in Senegal.  The Global Ecovillage Network’s mission, as expressed on its website includes: “contributing to the worldwide transformation toward sustainability, by supporting ecovillages, joining with like-minded partners, and expanding education and demonstration programs in sustainable living.” Sustainable living as described by GEN is not only a lifestyle dedicated to the preservation of the natural environment, but also a way of life that protects the society and its traditions in an economically viable way.

As one of these “like-minded partners” SEM’s policy is to finance only those clients who are members of a GEN-SEN accredited ecovillage. As such SEM would describe itself as an MFI with a very strong social mission: not only does it operate in rural areas of the country with no other access to financial services, but it is working with a network that encourages sustainable rural development

So what is an ecovillage? And what does being a member of one entail? How does this affect the kinds of business activities that the entrepreneurs can take on with the loan from SEM (and Kiva)? Does this mean that all of the business activities of SEM’s clients are wonderfully eco-friendly, accepting of traditional values and socially beneficial in every possible way?

Unfortunately not. Looking through the list of SEM’s clients and their business activities, I admit I was a little disappointed at first to find that this was not the case. There are of course excellent innovative exceptions of groups that are trying to protect the environment or to preserve social traditions. There’s the group that makes ropes, doormats and placemats from waste plastic in their village in an attempt to clean up the area. There are groups that have invested in other worthwhile causes such as mobile libraries or health clinics to benefit entire communities or departments. But the great majority of the borrower activities tell the story of any other MFI – people operating small businesses to generate household income and to create employment for themselves, and hopefully others too. And so the hundreds of loans for petty commerce, fishing, arts and crafts or farming weren’t exactly what I had been expecting and didn’t fulfil all 4 of the ecovillage ‘sustainability’ criteria (that is to say, socially, environmentally, culturally and economically sustainable) at all. What a shame.

However, the more I thought about this, the more I started to feel guilty about judging these loans on their ‘sustainability’ and their supposed value to the community.  Because, actually, who are we in the West to judge any the eco-friendliness of a business in the developing world when we are from societies and countries most responsible for the damage to the natural environment? The lower-risk option for these entrepreneurs is to follow well-known business models rather than to take a chance on something entirely new. And when your priority is putting food on the table or sending the kids to school – isn’t that the most important consideration? As a consequence, the most economically viable business may be, in some cases, less environmentally-friendly: the disposal of waste water from cheaper, chemical tie-dyeing products, for instance, is currently not controlled and is, in fact damaging to the environment.

SEM’s policy is to help those people who are affiliated to an ecovillage network, whose very existence works to undertake community projects and raise awareness of ways to improve the working way of life. And I think I agree that SEM’s policy with respect to the loan programme should not seek to be too prescriptive about the kinds of business that these people should be undertaking and the exact way that they should doing it. The borrowers have the right to make the most sensible decision for their current situation and if that means prioritising financial sustainability above environmental sustainability in the short term then, really, who are we to judge?!

And there are plenty of positives to take from the idea of lending to ecovillage communities. What the villages seem to have in common is a desire to collaborate for positive action and to share ideas for better ways of living. In one village I visited a group of men and women who, thanks to GEN subsidies, have manufactured solar ovens and have started training other people from their village to use them.  I have also heard of a mangrove restoration project in another village, which has been undertaken by the ecovillage committee. The subsidy and the collective action have eliminated the risk factor here: people are much more likely to involve themselves in these projects. However, my personal hope is that experience of these larger group projects will in turn encourage other small groups of borrowers to undertake training and, eventually, adopt more sustainable approaches to their own personal business activities as well. As they say here, “ndank ndank” (one step at a time!)

So, it’s definitely not all environmental doom and gloom when it comes to SEM’s microfinance programme.  Quite the opposite: it is certainly a time for hope and change. Alongside their support for the ecovillage network members, the SEM team  (supported by two contractors with climate change/ finance backgrounds) are about to launch a pilot project to provide villages with solar panels for electricity provision and energy-efficient, low smoke emission cooking equipment. They hope to offer borrowers these products in the form of a loan and expect that the technology can eventually be incorporated into SEM clients’ business activities to increase efficiency, lower cost and reduce the damaging effects on the environment. With any luck this initiative will be rolling out later this year and we will soon start to see impact of cleaner technologies on the village environment and profitability.

For a small MFI, SEM definitely has big ambitions.  The ecovillage network provides them with a client base which is extremely open to the need for sustainable development and, which, with the combined support of SEM and GEN, will hopefully be able to make informed decisions about the business activities that they lead in the future.

SEM Senegal now employs just 4 full-time staff members who, between them, cover the microfinance programme and manage the accounts. A team of investors and volunteers in the USA works together with the Dakar-based team to provide additional loan capital throughout the year. SEM issues less than 10 loans through Kiva per month, but is actively looking for more funding to meet an extremely high level of demand for loans throughout the country. To support more loans from SEM, check out their currently fundraising loans or, if you don’t manage to find one of their 10 or so loans, join the “Supporters of Senegal” lending team to get an update when the new loans are added.

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