Burkina Faso : Promotion of the Development of Industry, local handicrafts and Agriculture (PRODIA)
The Burkina context. Burkina Faso is the poorest country
of the planet according to the human development index (HDI) of the UN.
As a landlocked country in the midst of the Sahel zone, it has to face
recurring droughts and spreading desertification. Many rural families,
hoping to find a better living, move to the cities. Ouagadougou, the capital
of Burkina Faso, cannot escape this trend and keeps growing in size and
population.
For a lack of stable employment, the so called informal economy
and its “small businesses” is a predominant fact of life.
An urban microcredit institution. PRODIA is a microfinance institution which operates in and around Ouagadougou. With three agencies, PRODIA grants individual credits (without prior savings) to small craftsmen and shopkeepers who cannot offer sufficient guarantees to a classical bank, as, on top of a personal guarantee, the customer must present two guarantors (with a regular salary) before he can apply for a credit.
Interest rates for microcredits amount to 18% for a maximum of 18 months. Currently, PRODIA has about 2000 customers, 60% are women. The portfolio at risk is 2,5 %. Thanks to its performances, PRODIA covers 91% of its operating expenses (subsidies not included). Total autonomy should be reached before the end of 2005.
Through its activities, PRODIA is strengthening the Ouagadougou economy at its basics; it helps to train young people (recruited by its customers) and contributes to fight against unemployment.
SOS Faim (first Belgium then Luxembourg since 1993) has been supporting PRODIA for many years. As it reaches financial autonomy, SOS Faim is currently preparing to phase out of this very faithful and rewarding partnership. From now on, PRODIA is able to progress on its own and to « catch » more important financial sources.
Financial input: SOS Faim Luxembourg support to PRODIA amounted to 65 000 EUR in 2005.
