Reaching rural areas in Africa

Reaching rural areas in Africa


Adama Thiaw in his field.

12 March | 2014

In recent years, Oikocredit has focussed on Africa as one of its strategic investment areas. Oikocredit currently has over € 70 million invested in Africa across a range of sectors, with the plan for further expansion. Financing of both agricultural enterprises and microfinance institutions will remain a core part of the portfolio. Microfinance institutions (MFIs) across Africa play a key role in access to financial services, with many microborrowers located in rural areas without access to finance.

Oikocredit partners, such as Senegalese cooperative microfinance institution, Union des Mutuelles du Partenariat pour la Mobilisation de l’Epargne et du Crédit au Senegal (UM-PAMECAS), provide finance to rural, low income households which are usually excluded from the banking sector. Although 75% of Senegal’s population work in the agricultural sector, much of the country’s rural areas remain underserviced in terms of electricity, drinkable water, agricultural equipment, irrigation and financing. Around half the country’s 13 million inhabitants live below the poverty line.

UM-PAMECAS originally began in 1995 as an international aid programme for small credit and savings cooperatives. In 2000, UM-PAMECAS institutionalized and has since grown to become the second largest MFI in Senegal. Its beneficiaries are mainly farmers, small traders, micro-entrepreneurs and small to medium enterprises. The MFI now offers savings and credit products to over 500,000 members and clients, employing more than 500 people, half of whom are women.

Unlike other MFIs in Senegal, UM-PAMECAS has over 65 outlets, the majority of which are in rural or remote areas. This makes a big difference for farmers, such as UM-PAMECAS client, Adama Thiaw, who lives in a remote village in the department of Thiès. Adama farms around 3 ha of land, growing tomatoes, peppers, onions, cabbage, cashews and various other fruits and vegetables. With an office close to his village, Adama took his first loan to buy an irrigation system, fertilizer and seeds. Adama said the loan helped him expand his business. “I’ve since taken a second loan to buy animals and feed, and I now employ five people to help me on the farm,” Adama said.

Adama is just one example of how access to finance can make an impact on people living in rural areas. In coming years, Oikocredit will be expanding to new regions throughout Senegal which will contribute to making a bigger contribution across the country.

Latest deal

UM-PAMECAS has been a partner of Oikocredit since 2008. In October 2013, UM-PAMECAS received a second direct credit line of € 1 million to expand its financial offerings.

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