Sulaimon Olanrewaju tells the story of Grooming People for Better Livelihood Centre, an organisation that is committed to helping the economically active poor out of the grips of poverty through the provision of microfinancing.CONVINCED that the major problem the Nigerian poor have is their inability to access cheap fund to improve their low profit-yielding businesses, a group of development managers, who had worked with United Nations agencies, came together in 2006 with the sole aim of establishing a non-governmental organisation (NGO) that would provide the poor access to cheap fund so that they could improve their businesses and make a better living for themselves.Known as the Grooming People for Better Livelihood Centre (Grooming Centre for short), the organisation has been reducing the number of poor people in the country through the provision of funds to people who would ordinarily have had a challenge with securing facilities from commercial banks and even some microfinance institutions.As explained by the Chief Executive of the centre, Dr Godwin Nwabunka, 'Grooming Centre is a national institution with an international perspective and is dedicated to mobilising resources and offering financial services to the entrepreneurial poor that have little or no access to conventional forms of financial services. The poorest of the poor are our target.'He added, 'The Central Bank of Nigeria (CBN) estimates that over 65 per cent of the active population are either underserved or un-served by the formal financial institutions, thus the high demand for microfinance services. Therefore, Grooming Centre is poised to contribute to stimulating the micro economies at the community level by bringing a range of micro financial services to the reach of these deserving Nigerians. The centre is also an effort to complete the missing link in the development chain by empowering families and households with sustainable livelihoods necessary to meet their social needs.'But the centre focuses mainly on empowering women. Explaining the rationale behind this, the Executive Director, Mr Adesoji Tayo, said, 'Poverty is more pronounced among women. In addition, it has been discovered that family poverty is better alleviated through women because if women are empowered, it means there will be provision of good food for the family. This is important because when people eat the right kind of food, it is very likely that they will not take ill as much as they ordinarily would if they were not feeding well. It also means that the brains of the children would function better and that means they would perform better in their academics. So, it is a complete thing. When basic poverty is alleviated, you take care of so many other problems.'Tayo explained that the centre made it clear to its customers right from the outset that the money provided to them was not a gift but a loan and had to be repaid.He added, 'This is important because poverty cannot be alleviated through handouts. For poverty to be eradicated, the beneficiaries must inculcate the habit of creating wealth through whatever they get. The tendency among our people is that unless the beneficiary is aware that he is bound to repay, he becomes careless with the money and the whole essence of the intervention would be lost. So, our customers know that it is a business relationship and they have to repay the loans they take.'According to him, the NGO charges 15 per cent interest on the loan given to its customers.'We start by giving them N20,000 and they repay the amount over a period of 23 weeks by paying N1,000 weekly. Because of the sponsors' backgrounds in development management, we are aware that it is important that we keep to the terms of repayment. So, the onus is on us to ensure that we get to each of them weekly because if we miss going to a client in a week, it may be difficult for the client to meet up with the repayment terms. Once a client completes the payment of the N20,000 loan, she is entitled to another loan of N30,000. On the completion of that, she will be entitled to N50,000. So, it continues like that,' he said.Over a period of about five years, the NGO has been able to provide loans to over 550,000 women and has a loan recovery rate of 99.9 per cent. It has also been able to provide employment for over 700 people who man its 151 branches spread across 10 states of the federation.Speaking on one of the factors for the high success rate of the scheme, Tayo said the NGO had successfully grouped the beneficiaries of its scheme into clusters with group heads and trained them on how to run their businesses and manage their resources.'Grooming Centre as a membership organisation emphasises membership and group quality as an essential ingredient to achieving sustainable growth. Groups are formed on self selection basis and guided by basic social and economic indicators, such as household income, nutritional status, type of residence and commitment to change through viable micro-enterprise activities. Whereas the group structure facilitates group dynamics, provides easy access to members, and healthy competition amongst members, the optimal utilisation of the loan facility and repayment remain the primary responsibility of the individual members. These responsibilities are emphasised during the pre-loan training at which members are exposed to the centre's vision and mission, products, eligibility criteria, procedures for accessing loan facility, loan size, repayment procedure, and tips on effective utilisation and management of loans,' he said.However, in the beginning the organisation was faced with the Herculean task of sourcing funds.Tayo explained, 'Initially, we had the problem of getting funds. Because of the high cost of funds locally, it was impossible for us to access funds from Nigerian banks. If we had to pay a very high interest on the funds, there was no way we would be able to give loans to our clients at the rate we would want. So, we had to look beyond the commercial banks to source funds. We had to rely on some local and international agencies to get the kind of fund we wanted at the rate we considered appropriate. Some of these are ResponsAbility, Blue Orchard, Triodos Doen, Triple Jump, Regmifa, IFDC and Oyo Pacesetter Microfinance Institution.'According to some of the beneficiaries of the NGO's loans, Grooming Centre has helped them out of abject poverty.Mrs Idiat Adeniyi, a food seller at Aguda in Lagos, has this to say about the centre. 'I sell food stuffs and little provisions. I joined Bashirimi Group of Grooming Centre in Aguda, Lagos, Nigeria, in 2008. I am currently on the eighth stage collecting N90,000. I have also, collected festival loan on more than two occasions. Through Grooming Centre, I have been able to overcome the incubus problem of not being able to save money. Saving at least N200 with Grooming Centre, I now have more than N25,000 in my account after I have withdrawn from it, several times. Thank God my business has expanded; I can now sell rice in bags to my customers.'Similarly, Madam Veronica, a tailor at Ajegunle, a suburb of Lagos, said, 'Grooming Centre is an organisation sent from heaven to assist us because the credit facility provided is really a boost to our business which has given us added value to life. Through their support to my business, I have been able to complete two rooms at my site and I live there without landlord "wahala". In other words I will always recommend Grooming Centre to anyone that wants microfinance support.'The efforts of the NGO have been recognised locally and internationally. Earlier in the year, it was nominated for the Bankers Award for the Microfinance Institution/Project of the Year.Microrate, the rating agency for microfinance institutions, in its 2009 rating of the centre wrote that, 'Grooming is a well run, operationally sound microfinance institution.'But the organisation, which is billed for another rating soon, is not resting on its oars. As observed by Tayo, 'We have so much more to do to help more poor people out of their poverty. There are millions of poor people in the country and we have not even reached one million. So, there is so much more to do.
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