By Taye Obateru
A recent lecture by Governor Emmanuel Uduaghan of Delta State at the National Institute for Policy and Strategic Studies (NIPPS), Kuru, Plateau State entitled â€œMicro-Credit Programme As a Tool for Wealth/Youth Empowerment Creation and Good Governanceâ€ was an eye opener in many ways.
Although it focused on a programme of the administration known as the Delta State Micro-Credit Programme (DMCP), it nonetheless provided a basis for reflection on how the problem of unemployment and poverty can be tackled across the country. The governorâ€™s lecture coming as the last guest lecturer for participants of the Senior Executive Course â€˜31â€™ of the institute who were on the verge of completing their course gave them something to take away to their respective states and organizations/establishments.
Governor Emmanuel Uduaghan said: â€œThe Delta State Micro-Credit Programme (DMCP) was carefully packaged as a viable strategy for poverty alleviation and promote human capital deevelopmentÂ . The key element of this strategy for poverty alleviation is to facilitate access of the economically weak and disadvantaged segments of the population to productive assets and services through a sustainable credit programmeâ€,.
Governor Uduaghan said the DMCP tried to avoid the pitfalls of similar programmes which did not take care of the peculiar circumstances and abilities of the target beneficiaries resulting in their failure. He added that obstacles to accessing the micro-credit facility which had denied the unemployed poor who do not have collaterals for the loans were also taken care of under the programme thus enabling them to benefit from it.
He noted that â€œthe efforts of economically weak persons to enhance their socio-economic conditions through participation in the informal sector have been constrained by inadequate capital.
The bulk of economically weak persons in the informal sector have not significantly benefited from Institutional credit facilities because of some factors like inability to produce collateral; inappropriate operational procedures and strategy for intervention at the community level and the fact that the mode of operation of financial institutions whichÂ is not sensitive to the needs of economically weak persons.â€
He said the DMCP experience has, however, demonstrated that economically weak persons have enormous capacity to use financial services if appropriately delivered, to enhance the standard of their living.Â To achieve this, the governor said the conditions for loan under the programme were tailored to suit economically weak persons through micro loans which are not based on collateral but rather on group guarantee as beneficiaries are encouraged to form groups through which to access the credit.
Repayment is also made in weekly or monthly installments and repayable in 52 weeks. Repayment earlier than the specified period makes the group eligible for bigger loans. He said the groups are also encouraged to go into quick income generating activities while they are expected to maintain and sustain credit discipline through: peer pressure and group solidarity.
â€œThe DMCP loan portfolio meets diverse development needs such as joint enterprises, small scale or cottage industry. In other words, the scope of support and Intervention for the beneficiaries of DMCP, are income and employment generating activities in agro processing, cottage industries aqua culture, petty trading, etc.â€
Governor Uduaghan explained. So far, according to the governor, over 200 groups comprising more than 3000 individuals have benefitted from the programme since it took off effectively in December 2007.
They are into a variety of businesses include fish/periwinkle farming, palm oil trading, garri production, polythene and sachet water production and meat selling. Significantly, the Akwa-Ocha Cloth Weavers and others accompanied the governor to NIPPS to exhibit their products.
He said the success recorded with the programme was aided by making the implementation of projects the responsibility of the communities, with the active participation of the office of his executive assistant on the programme and participating micro-finance banks but with minimum bureaucracy.
Not only are communities encouraged to identify and prioritize the projects they want thereby making the projects demand-driven, they are also empowered through the opportunity to acquire necessary skills and resources to develop themselves. Communities also participate in all aspects of the project cycle just as the decision making process is substantially decentralized.
How we empower the informal sector
â€œAs you can see, what motivates the poor to improve their condition depends on their appreciation of the opportunities open to them, the risks involved in taking those opportunities and the limitations which their condition place upon them.
The Delta State Government had this in mind when the Micro-Credit programme was conceived and apart from being a poverty alleviation programme, DMCP is at the same time a conscious government social policy based on principle of awareness, which encourages participation by economically weak persons, who are organized into cluster groups to assist Government and institutions, in re-energizing the economy of each community. In a nutshell, DMCP has these attributes: empowering of the grassroots population, creating new wealth at that level and reducing unemployment in the productive age bracket.â€
In a chat with journalists after the presentation, Executive Assistant to the governor on Micro-Credit, Dr. Antonia Ashiedu believed that Delta State was blazing the trail in empowering people to contribute to the countryâ€™s growth. â€œMicro, small and medium enterprises called MSMEs are the acclaimed primary engines of growth in various countries.
When you talk of the Asian Tigers and their role in transforming Asia to a universal commercial giant, you are simply talking of the role of Micro, Small, Medium Enterprises in the activation and sustaining of the economies of Asia Countries. Many of those who listened to the lecture agreed that the DMCP example if replicated across the country would contribute significantly to addressing the unemployment problem in the country and fast-track her economic growth.