The Use of Micro financing

Amongst Senegalese women

McNair Chapter: University of Cincinnati
PhD. Guy-Lucien Whembolua
Assietou Ly

Keywords: micro finance, Senegal, Social capital,

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Introduction
The nation of Senegal is situated in West Africa. Senegal has an
estimated population of 13 million people (United Nations, 2013). Colonized by
France starting from the 15th century, Senegal is a French speaking country with
close ties to its former colonizer (Robinson, 2014). In 1960, Senegal peacefully
attained its independence (Darboe, 2010).

Senegal is a predominantly Muslim nation; over 90% of Senegalese

nationals are Sunni Muslims (Lang, 2010). Senegal has been applauded for
having one of the best democracies in Africa (World bank, 2012). The income
level of Senegal would be ranked as lower middle income. As of 2014, roughly
46.7 % of the population lives under the poverty line (World Bank, 2013). Like
most of the African continent, Senegal faces many challenges (Zobre, 2013).
There are roughly ten ethnic groups present in Senegal. Of the ten, The Wolof
(41%), Serer (14%), and the Fulani (12%) make up the majority. Demographics
such as locations are factors in poverty levels. Many of the ethnic groups live in
rural villages miles away from a developed city. Since 57% of the population of
Senegal lives in rural areas, these people, specifically women are targeted by
Micro finance agencies (Dobel, 2013).

Economics
Senegal is a nation with limited natural resources (USAID, 2012).
Senegals economy gains from foreign exchanges and its booming tourist
industry (World Travel and tourism council, 2013). The economy is based largely
on the agricultural sector. Periods of drought in Senegal can strongly affect the
economy (African development bank group, 2013). Senegal is currently indebted
1.88 billion dollars to the United States. All though Senegal has seen impressive
political and economic stability, the nation relies heavily on international financial
assistance (International monetary fund, 2013).

Women
Women make up 50.9 % of the total population of Senegal. Less than 45
% of the labor force in Senegal is made up of women. (United Nations, 2013).
Senegal has customs and traditions deeply engraved within the culture
(Robinson, 2014). In a traditional Senegalese household, the woman is
responsible for maintaining the home, children and cooking. Polygamy and
inheritance laws are seen as oppressive factors that create societal
discrimination (Lang, 2010). In recent years there has been an increase in
Senegalese women serving as secretaries and as maids in large Senegalese
cities. In rural Senegal, women often play a role in agricultural work (World
Health Organization, 2012). Due to the industrialization of many Senegalese
cities, young men are flocking to urban cities for work opportunities (Robinson,

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2013). This leaves many Senegalese women in rural areas with the responsibility
of village resource management and local development. In the cases of families
stricken by poverty, young females are often kept from going to school in order to
allow their male siblings to finish their education (Kane, 2010). In many cases, a
womans only chance of escaping poverty is by marrying a wealthy man (Diouf,
2009). Micro finance is often the solution for many poor Senegalese women
living in poverty (Kane, 2010).

Micro finance
Micro finance is a tool used to alleviate poverty in developing nations (Kiva,
2014). Micro financing offers the highest financial services to the poorest of
people (Crowe, 2012). Micro financing, also known as Micro crediting believes
that all people should have the opportunity to change their lifestyles by having
access to loans and other financial services (Yunus, 2011). These loans are
given out in order to generate income and build assets (Lend with care, 2013).
Although the concept of Micro finance is fairly new, the amount of Micro financing
banks and agencies have grown immensely in the last couple of years (Microbiz,
2014). Micro finance pioneers such as Muhammad Yunus helped spread the idea
of self-productivity and entrepreneurial spirit. Muhammad Yunus is the founder of
Grameen bank. This bank originated in Bangladesh and has since then gone
global. Grameen bank is unique in the sense that it removes the need for
collateral and is based on the idea of mutual trust (Grameen bank, 2014). Many

Micro finance supporters believe that collateral serves as a barrier for the poor to
receive financial services (Milder, 2008) .The idea of mutual trust between
borrowers, lenders and social capital makes Micro finance a popular program
across the world. This concept is crucial to the growth of character, the change in
lifestyle and the maximization of potential to thousands of people from the
poorest and smallest corners of the world. 80% of the time, women are the
greatest beneficiaries of Micro financing (Glass, 2013) As a young woman from a
third world country, the well-being and progression of poverty stricken women is
near and dear to my heart. The following paper examines the effectiveness of
Micro financing amongst women in Senegal, West Africa. This paper will analyze
the benefit of Micro financing to the African woman as well as the barriers to the
success of Micro finance.

Methodology
A total of fifteen articles on the topic of micro finance in Senegal were
collected and analyzed. These articles include peer reviews and scholarly
articles. Publications and Internet sources from international agencies were
sourced. The scholarly articles were divided into three groups. The groups were
labeled economy, women and micro finance. Relevant information from the
articles were identified for each subheading. Each heading represents the
collective thoughts of scholars and researchers from all of the articles.

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Interview
A face-to-face interview with a former micro finance beneficiary was
included in the study. Dieyenaba Wane is a mother of four that has been a
beneficiary of several popular micro credit organizations throughout Dakar. Most
recently she has received a loan of $900,000 CFA ($2000 USD) from credit
mutual. Wane used the funds to purchase Gambian wax material to make
fashionable skirts in a small tailoring salon.

The interview took place in Wanes shop in Scat Urbam, Dakar. A total of
seven open-ended questions were asked. The interview took roughly 45 minutes
and was conducted in Wolof and later translated into English. The interview
questions are listed below.

1)
2)
3)
4)
5)
6)
7)

What micro finance agency did you work with?

Was there a need for collateral and if to what extent
What was the interest rate charged
Did you feel supported by the agency
Did you feel supported by your family and community
How has receiving this loan impacted you
What is the repayment process like for you
Results

Of the articles reviewed, a strong emphasis was placed on the values and
traditions of Senegalese women. An in depth article written by Professor Kane of

Florida University suggests that Micro finance is a great tool to the Senegalese
woman. The article goes on to explain that in recent years Senegalese women
are contributing to their households by generating income. Although women in
the workforce are becoming more common in Senegal, It comes with much
criticism. The article also states that widows and divorced women are turning to
micro finance as their only means of providing for their children. For centuries,
Senegal has been accustomed to the idea of women staying home with the
children. The presence of micro finance has reached many African nations.

Senegal is a Patriarchy and has its very traditional gender roles set in place. A
potential challenge to Micro finance in Senegal is the values or acceptance of
this program into the rural villages. In article one an interview between a
journalist and a Senegalese Micro finance client is documented. The young
woman who had recently started her business admits that her husband was
reluctant to allow her to take the loan. The family was in a serious financial
problem yet the husband was hesitant that the community would look down upon
him, the views and culture that is engraved in Senegalese communities can also
be seen as a barrier to allowing women to find their entrepreneurial spirit and aid
their families ( Perry, 2012). Articles 5, 6 and 7 states that Social capital is a huge
element to the success of Micro finance. The idea is that family members and
community members of these women are their greatest network and asset. In
most of the Senegalese villages the market is not concrete. In order to be
successful these women need the support from those around them to serve as

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clientele. These supporters are also needed to promote these newfound

businesses by word of mouth, In these villages, marketing is limited so the
community members are needed to help grow and keep the businesses going
(Dobel, 2011).

In the interview with Dieynaba Wane, Seven open-ended questions were

posed. The responses that madame wane provided was pretty positive in terms
of her overall experience with micro finance. Wane admitted to using the funds
for her start up and the remainder on her household. She stated that she found it
hard to not use the funds for the immediate needs of her family. She is thankful
for her supportive husband who encouraged her to seek help from credit mutual.
She has gained a sense of self-independence and loves that she can contribute
to her family. Wane has received a total of three micro credit loans for various
projects. Her current project involves buying Gambian material to make
traditional skirts for sell. She has then since opened her own tailoring shop in
Dakar, Senegal. Her last loan was for approximately $2000 USD and has been
the largest loan that she has received. She is most thankful for the no-Collateral
policy. In order to receive the loan she needed to have a co-signer on her
paperwork. She is making regular payments towards repaying her loan. Since
receiving a micro credit loan Wane admits to feeling financially independent and
hopeful for the future of her family.

Conclusion

Future research can measure the interactions between agency and

beneficiary. A strong relationship and the support of the agency may affect how
well an entrepreneur performs. Future research can examine and address the
issues of using the loan for household needs. If not successful, this can cause
the entrepreneur to default on their loan. In a nation where government
assistance is low, Micro finance is seen as the next big thing. These women
often use these loans to better their lives and the lives of their families. Micro
finance proves to be a challenge in Senegal because it is a powerful tool and
opposes many gender roles of the Senegalese womans success. Lastly further
research should look into how important social groups are to the success of a
newly found venture is in Senegal. Micro finance is essential to the progression
of women and to the Senegalese economy

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