HIV Support Group Members Benefit from Interest-Free Loan Program in Nigeria

Hauwa Bala, head of the rice sellers group, and other members display their produce during a group meeting. {Photo credit: MSH.}Photo credit: MSH.

Tunga Magajiya, Niger State, Nigeria - “Our lives have been improved with small loans,” said members of Nasara Support Group (NSG) at a meeting celebrating the group’s successes. The NSG provides psychosocial and other support to HIV-positive men and women in Tunga Magajiya, Niger State, Nigeria, and offers access to an interest-free loan program through USAID’s, PEPFAR-funded, MSH-led Prevention Organizational Systems AIDS Care and Treatment(ProACT) project.

In October, 2010, the ProACT community care team encouraged NSG members to look outward for community support, and look inward for their own ideas on how to strengthen their businesses. Group members then began to attract financing from within the group as well as from external sources, empowering themselves economically.

The group raised baseline capital by taxing themselves, and by conducting fundraising visits to community leaders and representatives of local government. They received donations of N100,000 (about $620) from the Chairman of the Rijau Local Government Council, and N80,000 (about $500) from other community members. These sums were deposited into a revolving fund that was then used to give small interest-free loans to those most in need. It also funded the purchase of large food stocks for distribution to group members in need, as well as to orphans and vulnerable children.

The loan distribution system is a unique one. Members join groups based on their careers. Beneficiary groups include farmers, palm oil traders, weavers, blacksmiths, and vendors of grain, ground nut oil, and “kulikuli” (bean cake). There are benefits to developing a business idea together, and receiving a loan as a group. Groups typically have members with varying levels of business experience, and less experienced members can learn by doing in a supportive environment. Group members who do not adequately contribute to the process receive a smaller share, or no share, of the profits later on; this creates an incentive for all group members to contribute to making the business idea work.

There are other financial advantages as well. The start-up period is faster with more people involved, less up-front investment per person is required, and financial risk is spread across more people. Groups can also buy products in bulk, which is cheaper than buying smaller amounts of product individually. A group producing ground nut oil collectively bought a large bag of ground nuts, which an individual typically could not afford alone. “We shared the funds we got and bought more bags of ground nuts,“ said Kobo Musa, head of the ground nut oil sellers group. ”Each of us produces at least ten bottles of oil and one basin of cake (kulikuli) from each bag of ground nuts. The profit is helping us to feed our children.” Within six months, all members of the group had enough money to buy and process ground nuts on their own. They continue sharing profits as a group.
Prior to the loan disbursement, many members could not afford transportation to treatment facilities, children’s school fees, or to even feed their children well. Most had difficulty with handling minor domestic issues. With the support group loans, they engaged in small businesses that quickly bore fruit. Today they can afford to pay school fees, cook good food to improve family nutrition, and transport themselves to the facilities for care.

Other group members’ testimonies also praise the success of this innovative loan program. Hauwa Bala, head of the rice millers group, shared, “We bought rice, milled it to sell and made a profit – sometimes N1,500 (about $9) and sometimes even N2,000 (about $12.50) at each market; it is from this that our children’s schools fees are paid, we transport ourselves to hospital for treatment, and buy food.”

The highlight of the September, 2011 Nasara Support Group meeting was the “freedom dance,” where women danced with the ProACT HIV Prevention Specialist Ngozi Uzoegwu to celebrate the life transformation that has come with these small interest-free loans.

Today, ProACT facilitates the interest-free loan program in six Northern-Nigerian States, and supports their state governments to operate 74 HIV & AIDS care and treatment centers.