When asked where she had gotten her stock, (you can see her shelves are packed with items for sale) she picked up some fabric and recounted how she had gone by local bus from Senegal, across West Africa and on to Cameroon and Chad to buy the fabric in bulk- traveling for days each way to amass inventory that would diversify her stall’s stock of goods.
Digging deeper into her inventory as her story piqued my interest, I learned she had buckets of incenses from Saudi Arabia (which she bought during her recent Muslim Hajj trip) and piles of high quality fabric and clothing from Mali, Burkina Faso and Togo. Noel said she had also once been to China to buy beauty and body products to then resell in this market stall in Kaolack.
Adding up the cost of travel, shipping, and logistics it would take to run this kind of business, and making a rough estimation of the value of her inventory, I realized that the cash flow going through this small market stall was likely in the thousands of dollars.
Yet Noel is financing the growth of her business from an microfinance institution (MFI) like CAURIE which has an average loan size available for local entrepreneurs of just $200. CAURIE is stretched to offer any business loans greater than $1000. Additionally, CAURIE needs all loans to be repaid within six months.
Why is Noel borrowing from CAURIE when she has enough collateral to certainly back a much larger loan from a larger formal bank? When asked why she wasn’t borrowing from a bank, Noel said she actually had gone through the requirements once to take a loan from a formal bank through a special business loan fund specifically for small and medium enterprises. However, the bank was so unprepared to work with small-scale businesses that it actually required 200 Kaolack women to apply together for a single bank business loan- the group ended up with a loan among them of about $58,000 of which for Noel meant business capital of just $500. To make it worse, she said the loan was more expensive than CAURIE and certainly more difficult to apply for.
Noel said she doesn’t save any longer because, “why would I save when I know the money in my account could be making me a 30% profit being used to buy stock in my shop?”
CAURIE is a Senegalese NGO offering start-up capital to rural women micro-entrepreneurs, but is now finding itself as one of the few financial service resources for the region’s rural business sector and for very small scale businesses. Unfortunately, CAURIE is only rarely offered the quantities of loan capital necessary to serve more than the most basic rural business clients with very small amounts of business capital.
This is a lesson on how detached the mainstream financial services sector remains from the population in this community (and many others- and in many other countries besides Senegal) when a woman running a high value and sophisticated commerce business has borrowed and repaid business loans successfully 5 times but still cannot access sufficient business finance to grow apart from the loans of a grassroots village banking program like CAURIE.