Kering – a world-class luxury group – has partnered with International NGO Solidaridad to enhance the economic independence of artisanal and small-scale women gold miners in communities in Ghana, with a focus on access to credit. Solidaridad delivered a pilot project that mobilised 130 women into five savings groups, to test whether the introduction of a revolving fund to these savings groups would bolster the group members’ ability to access more credit, in turn strengthening their mining related and non-mining enterprises.
The revolving fund is the provision of external funding to be given out as loans. In this situation, it means that entrepreneurs who cannot access formal finance can access loans that once repaid, will support another entrepreneur. The loans are low interest and often repaid in less than a year, generating high rotation of money.
This case study focuses on the monitoring and evaluation of this revolving fund; you can access a detailed write up of the whole pilot here.
How is this Gender-Responsive Due Diligence?
Solidaridad has made a gender-specific review of adverse impacts in the gold mining supply chain (GRDD Step 2). This review showed that women in the small-scale mining sector in Ghana are performing low paid jobs and are not represented in mine management. The underprivileged position of women in the gold mines is a reflection of their position in the communities, which hinders women in their economic and social development. They need access to finance, support in financial literacy and access to the local business supportive infrastructure. The project focus is to pave the way for women to start businesses around the gold mines and in the communities. By focusing on this, the project tackles a systemic gender-based barrier in gold mining communities.
Following these findings, Kering’s partnership with Solidaridad focused on increasing women’s access to credit, so that women can start or improve their businesses around the mines legally (GRDD Step 3). This has been achieved via establishing savings groups for women in the mining communities, and then supporting these savings groups to increase the size of their loans via a revolving fund of $15,000, which Kering has provided.
Tracking implementation and results of the revolving fund (GRDD Step 4) has also been an important step for the project to understand how they can sustainably achieve their goal. They have done this in several ways:
- Developing indicators: Indicators were developed before starting, so that everyone knew how success was being measured and how data would be obtained.
- Allocating budget: 6% of the total budget was assigned to monitoring and evaluation – this included the completion of an outcome evaluation to assess if the intended outcomes were being achieved.
- Real time monitoring: Field officers monitored the savings groups. They not only provided technical support to the savings groups but also collected data on loans made, repayment rates, and what the loans are funding.
- Consultation: The savings groups were consulted after nine-months to understand the group’s financial needs. This informed whether a revolving fund was needed, and if so, how it should be distributed between the groups.
- Researching approaches: Solidaridad conducted extensive research into how a revolving fund would work, mindful not to disrupt savings groups, but instead enhance group capacity to provide business related loans.
The project has made good progress implementing a gender-specific due diligence process, leading to specific Step 4 achievements of:
- 55% of women involved in the saving groups have secured credit from either the savings group or the revolving fund. Loans have contributed to business expansion, and an increase in both profit and overall household incomes.
- The $15,000 revolving fund has been given out to 72 individuals via the five savings groups, with 51% repaid to date.
- Trust has been placed in the women – they are responsible for managing the revolving fund and how it works, which has provided more ownership and empowerment.
- The women have demonstrated short repayment times, indicating the funds are likely to revolve for a long time. This means high reach and impact for a relatively low investment.
- By continuously tracking the savings groups, it was apparent that while women could access finance through the groups, the finance available was not enough. This meant the revolving fund could be used to inject sustainable capital into the groups.
- Through continuous tracking, frequent adjustments could be made to improve how the revolving fund worked, and a ‘How To’ guide could be developed to ensure lessons learned from creating such a fund can inform future work.
Learning and Recommendations for others
- Keep reviewing your goal – the project’s goal was for women in small-scale mining communities to access finances. While the savings groups started to progress, the funds available were not enough. Kering and Solidaridad could see this from continuous tracking of the pilot, and so introduced the revolving fund.
- Embedding a revolving fund within an existing group structure – such as a savings group which is registered and has guidelines and established ways of working – will support the tracking of implementation and results as well as efficient use of the fund.
- The revolving fund should be complemented by loan criteria as well as a tool to help track loan allocations and repayments.
- Adequate financial resourcing is needed to effectively track implementation and results – make sure that you budget enough to do it well.
- To ensure that project participants have the confidence, skills and knowledge to make good financial investments, such a fund should be complemented with training on: group dynamics, leadership skills, business skills, and financial literacy.
- To support women to make informed decisions about what kind of enterprises to invest in, work with them to map the economic opportunities that exist in the area.
Interested in learning more? Contact firstname.lastname@example.org for more details and opportunities to collaborate.
Written by Joanna Howarth