nuruWomen - Microloans

4 min read

Women are starting to invest in ETFs, funding their own companies and are becoming more demanding in asking for an adequate salary in their jobs. However, we still have a long way to go to close the gender gap, especially in companies leading positions. But let's look beyond the box. NuruWomen e.V is already doing this since 2020, with their campaign to build a bridge between Ethiopia and Germany. They want to show that women everywhere have the same visions and that one can achieve them through mutual support. Their goal is to give women in Ethiopia a perspective. Self-employment strengthens women in their self-esteem, their identity and in their ability to solve problems themselves. Women around the world should have the same opportunities to build an independent, self-determined existence. But how can one achieve this in third world countries? The founders Sarah and Sali Nuru have found the solution - micro-loans.

A micro-loan is a loan that is used to start your own business. Especially for widowed or divorced women in Ethiopia, a loan is the only way to start a business in order to secure an income and thus the survival of their family. Before applying for loan the women are invited to events in the village to understand what a mirco-loan is and how it works. After that they receive a five-days training course on bookkeeping, the legal framework for microcredit groups, instalment payments, interest and how to create a business plan.

The women are also trained in improving their handcrafts to enable them to sell their goods at higher prices. Teaching women in Ethiopia how to improve their handcrafts is very important since 75% of secondary school age girls do not attend secondary school. Mostly because of the 11.6 million School-aged girls in Ethiopia 40% are married as children. Meaning most do not have a higher education degree or were trained in handcrafts by professionals.

Skills, potential, business ideas, financial plans and chances of success are discussed together. The women are given extensive knowledge so that they can successfully put their business ideas into reality. NuruWomen want to encourage the women to develop a feeling for saving, that is why, even before the loans are granted, the women begin to put some Ethiopian birr (ETB, national currency) aside.

Savings groups are formed with a maximum of ten members. At regular meetings, they support each other in implementing their business ideas. With the help of the local authorities, it is checked whether the women are already included in other groups and whether they still have to pay off other loans.

Up to one hundred of these groups form a microcredit association, a so-called SACCO (saving and credit cooperative). The women elect a chairwoman, a secretary and a cashier for the association. Each association receives its own name, a bank account and a stamp. The exchange and solidarity among the women help them start their business and ensure that the loans are repaid. The loans are granted based on the intended economic activities of the women and must also be approved by the entire group. The loan amounts are between 4,000 and 10,000 ETB, the equivalent of around 120 to 295 EUR (as of the exchange rate: April 2020). With the repaid loans, new and higher loans can then again be granted. In this way, the women support each other sustainably and generate healthy growth.

Micro-loans for women are not only an economic instrument, they also help to build a society with equal rights. The emergence of associations that consist exclusively of women also contributes to emancipation. The opportunity to run a small business and make money benefits all family members.