INTRODUCING CHRISTIAN RURAL AID NETWORK (CRAN) WITH FOCUS ON ITS MICROFINANCE AND VILLAGE ENTERPRISES DEVELOPMENT PROGRAMMES.

INTRODUCING CHRISTIAN RURAL AID NETWORK (CRAN) WITH

FOCUS ON ITS MICROFINANCE AND VILLAGE ENTERPRISES

DEVELOPMENT PROGRAMMES

CRAN is:•A rural development NGO

established in 1993 with its seat in Cape Coast in the C/R of Ghana.

•Registered as an NGO (under the Companies Code 1963, Act 179) with (Reg. No: 56925), and also with the Department of Social Welfare (Reg. No. DSW/ 671).

CRAN is a member of:Ghana Association of Private

Voluntary Organisations in Development (GAPVOD)

Ghana Microfinance Institutions Network (GHAMFIN)

Association of Microfinance NGOs

Our Vision:To see a Ghanaian society in which, poverty and its concomitants including hunger, illiteracy, ignorance and squalor, which characterise the lives of majority of the country’s rural population are substantially reduced if not completely eradicated, leading to the attainment of social justice.

Our Mission:To work towards improvement in the quality of life for the rural poor and disadvantaged populations/ communities in a holistic manner (physically, socially, economically and spiritually) with emphasis on the economic and social empowerment of women as well as the right of children to quality formal basic education in a most professional and qualitative manner.

Our Main Objectives:• Contribute towards social and economic

development and improved quality of life for poor rural households & communities with emphasis on women and children within CRAN’s geographical scope of operation.

• Promote and provide access to quality formal basic education for children within deprived rural communities and by that contributing to bridging the urban-rural, gaps in basic education in Ghana and also as long-term means to poverty reduction.

CRAN’s Main Programme Areas:

a. Social Development Programme

b. Microfinance for Development

SOCIAL DEVELOPMENT PROGRAMME: Focuses mainly on the following areas:

a) Promotion of quality basic education

b) Promotion of vocational & entrepreneurial training for rural households especially

women towards self-employable skills acquisition;

c) Promotion of village micro-enterprises through the combination of appropriate technologies, entrepreneurial training and microfinance;

d) HIV/AIDS prevention education & support for direct and indirect victims of the pandemic;

e) Relief programmes for Refugees;

f) Support for Village Churches as agents of community development

MICROFINANCE FOR DEVELOPMENTPROGRAMME

CRAN’s Microfinance programme broadly entails:

Rural and Informal Sector Microfinance;

Extension of Microcredits to rural & peri-urban poor households on both individual and on group basis;

Rural savings mobilisation schemes based on the traditional time-tested ‘Susu’ system;

Establishment of Village Banks and Microcredit Village Agencies.

Geographical Scope of CRAN’s Activities:CRAN has been operating within ten districts across threeRegions Western, Central and Volta Regions; in Ghana. Thedistricts are:

Central Region Mfantsiman District Abura-Asebu-Kwamankese District Cape Coast District, KEEA District

Western Region Shama-Ahanta East District Mpohor Wassa East District

Volta Region: Hohoe District Kpando District Jasikan District Kadjebi District

MAIN OBJECTIVES OF CRAN’S MICROFINANCE

• To reach 30,000 poor households with microcredits by the year 2010 and 50,000 households by the year 2015.

• To ensure that at least 70% of the rural and peri-urban poor who receive microcredits under the programme by 2015 within the various target areas are and remain women.

• Ensure that CRAN’s Microfinance covers at least five districts each within each of the three target regions of Ghana - Central, Western and Volta Regions where CRAN is currently operating by 2015.

• CRAN’s Microfinance programme becomes fully self sustainable by 2012 and largely independent of foreign donor funding.

• Attain a microfinance institutional status that promotes at least 2.5% of clients from subsistence to income generating to micro-enterprise and to small-scale industry yearly staring from 2007.

• CRAN’s Microfinance programme graduates into a fully-fledged microfinance institution and thereupon becoming a key player in Ghana’s microfinance industry by 2012

• Provide entrepreneurial capacity building training and business advisory programme to at least 25% of total registered clients in a year.

OUR MICROFINANCE PRODUCTS

• Short-Term Business Loan (STBL) Duration: Six months. Interest rate: 19% (38% annualised)

• Long-Term Business Loan (STBL) Duration: Twelve months. Interest rate: 38%

• Inventory Loans In the form of agricultural and agro-inputs and

delivered directly to farmers and agro-processors other than cash. Currently, the inventory loan facility remains a veritable part of CRAN’s Village Enterprises Development Promotion Programme `(VEDPP). Duration: Twelve months. Interest rate: 20 - 30%

OTHER MICROFINANCE RELATED SERVICES

• Training and Business Advisory services

• Village Enterprises Development services

• Micro-Banking services (Village/Community Bank Concept)

• Voluntary Susu Savings scheme

CRAN Microfinance Operating system HQ in Cape Coast approves

most loans

Hohoe Branch approves all loans

in the VR

KpandoUnit

KadjebiUnit

Abura Unit

Elmina Unit

Shama KedziUnit

CC CastleUnit

Swidu Unit

Clients: Solidarity Groups and some few Individual Loans

LOAN DISBURSEMENT AND ADMINISTRATION PROCEDURES

• Field officers attached to each MF Unit identify and form solidarity groups.

• A Training and Monitoring Team provides training for the group which covers a period of 4 – 8 weeks to prepare them for the loan.

• Training and Monitoring Team assists group to complete loan application forms

• Loan is processed and disbursed to the group/individual members in the group (Group sizes range from 25 to 40 members).

• All loans disbursed are captured and tracked using our Loan Performer MIS

• The repayment of Loans is done through clients’ daily savings or group savings.

• A Recovery Team chases after defaulting loans.

Vital Statistics on the current state of CRAN

Microfinance

(See attached excel sheet)

ABOUT CRAN’S VILLAGE ENTERPRISES DEVELOPMENT PROMOTION PROGRAMME

(VEDPP)

• VEDPP is CRAN’s response to realities on the ground which necessitates going a step beyond microfinance i.e. the delivery of credits and savings mobilisation.

Aim & Objective of VEDPP

• To promote increased value added production income generation and employment at the village level for poverty reduction and wealth creation.

Key Strategy of the VEDPP

VEDPP design and implementation strategy involves the combination of the following:

• Training for self-employable & entrepreneurial skills acquisition and development;

• Facilitating access to appropriate rural technologies and technology transfer; and

• Facilitating access to rural finance through microcredits extension and management.

Access to rural finance through

microcredits extension

Entrepreneurial and

self-employable skills training

Appropriate rural technology transfer

VEDPP Key Strategy

Production Organisation under the VEDPPEstablishment of village production companies based on clear division of labour and enterprise management instead of the usual group or individual production units.

Specific Areas of Production Intervention under the VEDPP• Stepping up agricultural production through various

interventions (Block Farming methods etc.).• Diversification of agricultural production with non-traditional

products like mushrooms, bee-farming, woodlots etc. • Provision and/or facilitating access to appropriate technologies

for small-scale agro-processing. • Facilitating the creation of viable and sustainable village

enterprises.• Entrepreneurial capacity building and enterprise development

for target groups and individuals;• Transfer of and access to appropriate technologies for village

enterprises and production;• Provision of and access to rural finance in the form of micro-

credits for target groups.

ORGANISATIONAL STRUCTURE OF CRAN

Board of Directors of CRAN

Advisory Committee of Experts on Microfinance

Executive Management

Project Managers/Field Staff

Grassroots units as the Direct Beneficiaries

MF CAPITALISATION SOURCES

Source Type of facility & amount

Interest Rate Remarks

Cordaid – The Netherlands

Loan €400,000 12.0% (Cedi denominated)

€200,000 so far

disbursed to CRAN

SG-SSB Ltd. 1.3bn Cedis

Overdraft facility

19.9% Negotiations with SG-SSB on-going for top-up

Social Investment Fund (SIF)

Loan funds

1.0bn Cedis

14.5% Facility has since been repaid

Tara Jane Trust, UK funds

Loan £60,000 15% (Cedi denominated)

To be repaid into CRAN social dev’t fund

EED, Germany(Church Development Service)

Grant

€175,000 ------

For both VEDPP and MF loans capitalisation

PARTICIPATION IN GHANA GOVERNMENT INITIATED AND DONOR FUNDED PROGRAMMES

Date Project Designation Description of Activity & Remarks2002 -2004 Emergency Social Relief

Programme (ESRP) Extension of Microcredits to Food Marketers in six districts in the Western Region as part of the ESRP where CRAN extended administered microcredits to over 1,000 beneficiaries with great success.

2004 -2005 Promoting Private Sector Development Programme (PPSDP) of the GoG and the UNDP

CRAN was selected for participation in the capacity building component of the PPSD programme.

2004 – 2005 Local Initiative Fund (LIF) sub-component of the Community-Based Nutrition and Food Security Programme (CBNFSP) of the Community-Based Poverty Reduction Project (CBPRP)

CRAN selected as the Facilitating Organisation to implement the Local Initiative Fund – LIF (microfinance) sub-component of the CBNFSP in ten pilot communities each in the KEEA District (CR) Kadjebi District (VR). A World Bank sponsored MoH / GHS Project).

2004 – 2006 Social Investment Fund (SIF) CRAN selected to implement the microfinance component of the SIF to various production groups in four districts in the Central and Volta Regions.

2005 - 2006 Agricultural Extension Services delivery by the Non-public sector under the Extension Development Fund (EDF)

CRAN selected to undertake extension services delivery to farmers in the Hohoe District (Volta Region) as a pilot under the aegis of the Non-Public Sector Agricultural Extension Services programme sponsored by the World Bank as part of the Extension Development Fund (EDF)

KEY CHALLENGES FACED

• Inadequate capitalization of the scheme posing threats to profitability and sustainability

• Interest rate not competitive because our cost of borrowing is high

• Cost management (MF is labour intensive)

• Risk management – weak collateral system

FUTURE PLANS AND PROJECTIONS FOR CRAN MICROFINANCE

• Carry out Microfinance Rating by mid-2007.

• Raise a total capitalisation fund of 2.5milion Euros or 30bn Cedis over the next five years (2007 – 2012) through soft loans and grants etc.

• To reach out to at least 50,000 clients within the three regions we are operating in by 2012.

• Transform the MF scheme into a full-fledged Non-Banking Financial Institution by 2012.

• Float equity shares by 2013

AREAS IN WHICH WE NEED SUPPORT• Capitalisation funds – in the form of soft or

concessionary loans & grants etc.

• Funds for training of managers and staff of the MF programme – i.e. capacity building.

• Funds for training of clients.

• Funds for the acquisition of logistics including vehicles, motorbikes, computers & accessories and others.

CONTACT TO CRAN:Address:Christian Rural Aid Network (CRAN), GhanaP.O. Box UC 97, Cape Coast, C/R, GHANA.Tel. +233-42-33572 Fax: +233-42-34218 Mobile: 020 201 9399E-mail: [email protected] or [email protected]: www.cran.orgOffice Location in Cape Coast: SIC Building Adjacent to Ghana Telecom.

Contact to our Volta Regional OfficeCRAN, Volta Regional OfficeP.O. Box 472Hohoe, V/R., GHANATel. +233 935 22195 Mobile: 0244 835 624E-mail: [email protected] Office Location in Hohoe: Adjacent to Shell Filling Station, close to theDistrict Assembly and the Hohoe Central Market.

OUR REFERENCES• Ghana Association of Voluntary Organisations in

Development (GAPVOD), Accra.

• Ghana Microfinance Institutions Network (GHAMAFIN), Accra.

• Association of Financial NGOs in Ghana (ASFIN)

• Deloitte and Touche, Accra Ghana (CRAN’s financial auditors)

• CRAN Freundeskreis, e.V., Aachen, Germany

• Deutsche-Afrikanisch Zusammenarbiet (DAZ), Greifswald, Germany.

THANK YOU