Kerite and Collateral: Women’s micro-credit in western Mali

This ethnographic case study is taken from Kenieroba, western Mali, a region characterized by limited transportation, industry, and commercial agriculture. Openended interviews with women, performed in all 35 households, show that effective microcredit programs require transparency, accountability, capacity building elements, a staff knowledgeable about local economic conditions, and agents who transform knowledge into sound investment advice. Women in rural Mali use kerite nuts, an edible tree fruit, as a bank account; when a woman needs cash, she ‘withdraws’ some nuts from the forest, processes them, and sells the shea butter on the local market. During famine, the shea butter, a high calorie sauce base, can be eaten. A woman’s stock of kerite therefore doubly ensures food security and provides cash in a cash-poor environment. Loan repayments depleted kerite stock, making women more economically vulnerable and less food secure. Thus in an impoverished environment micro-credit turns out to be a doubleedged sword: if programs are poorly run, they do more harm than good. Introduction Nya Diarra proudly showed us her gunnysacks stuffed with heart shaped nuts. She explained that this was kerite, a tree fruit. It could be processed into a popular and nutritious sauce base. She had managed to gather about ten sacks this season on her forays to the local forest. Each gunnysack would last a month, if the butter were only eaten. Of course, Nya had to sell some of it, from time to time. She was left with two sacks, about enough to last until the rainy season, when times would be hard and the villagers would have to tighten their belts. In 1976 Muhammad Yunus began the revolutionary Grameen Bank in Bangladesh, which loaned small amounts of money, i.e. microcredit, to the rural poor, typically a group without land or other collateral. This allowed Bangladeshi individuals to band together and borrow money in groups. Women were targeted, being the least able to access cash or own land; they had little collateral that would give them access to traditional loans. Profit oriented activities, housing, and schooling were considered the three main justifications for loans; household consumption was not 1 . In an attempt to limit exploitation, bank branches were owned and directed by the group of borrowers. Groups met weekly to make decisions and receive educational seminars by bank staff 2 . The Grameen system corrected for the two common information asymmetries involved in banking: adverse selection (friends or neighbors chose each other based on years of prior interaction, and thus those who could not be trusted to repay were eliminated) and moral hazard (two of a five-member borrowing group received loans and the other three pressured the first two to repay so that they too could receive loans 3 ). Loans were 1 http://www.grameen-info.org/bank/cds.html 2 See “The Sixteen Decisions” at http://www.grameen-info.org/bank/the16.html 3 http://www.grameen-info.org/bank/GBGlance.htm Double-click here to edit text.