Democratic Republic of Congo

Marginalized by Conventional Lenders, Women in DRC Power One Another’s Dreams by Pooling, Lending Assets

In Goma, DRC, likilimba lending groups are creating opportunities for female entrepreneurs. While local laws make it difficult for married women to open bank accounts and start businesses, likilimbas operate outside the regulated lending sector. Likilimba leaders report many small-business success stories and 100 percent payback rates.

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GOMA, DEMOCRATIC REPUBLIC OF CONGO – Devotte Ndulani has always been an entrepreneur, doing whatever she could to earn money for her family.

Ndulani, 37, a single mother of three, used to run a small shop selling doughnuts, an unsweetened fried bread that is common here, but she didn’t earn enough to survive.

So she turned to tomatoes.

Ten years ago Ndulani began buying tomatoes across the border in Gisyeni, Rwanda, where produce is grown and less expensive than in DRC. Every day she crossed back and forth across the border to sell Gisyeni tomatoes in Goma, earning a small profit.

Slowly, she started to earn more money, she says.

Still, she dreamed of bigger success.

An undesirable candidate for a bank loan – she didn’t have any savings or collateral – she decided to join her neighborhood likilimba, a grass-roots micro-lending collective.

Ndulani and the other members of her first likilimba each contributed one dollar a day when they could. In the likilimba system, funds are disbursed to members one at a time. Each recipient of funds has 40 weeks to repay the amount. When the amount is repaid, with no interest, the likilimba goes to the next person.

Six years after Ndulani contributed her first dollar to the likilimba, she received a loan.

“One blessed day, my turn came and I received money from likilimba,” Ndulani says.

Participating in likilimba enabled her to get the money she needed to transform her business. She was also able to save money and help other woman pursue their business goals.

“I noticed that this is the best way to save money because one has to wait patiently until it is their turn to receive money,” she says.

With the 46,000 Congolese francs ($50) she borrowed from the likilimba, Ndulani began to expand her business.

“That money prompted me to open a small shop,” she says.

Ndulani sells a variety of foods, including maize meal, rice, vegetable oil, milk powder, sardines, fruit juice, bread and soap.

To gain access to even more capital – and the potential to increase her income – Ndulani started her own likilimba in 2011. Contributions are higher in Ndulani’s likilimba: Its 40 members contribute as much as $50 dollars a month apiece.

By 2014, Ndulani had reinvested another round of likilimba to further grow her business. Using profits from her store and money she received from her higher-stakes likilimba, she bought a plot of land and built a house.

“I am a single mother, but I manage to provide for my mother and my kids,” Ndulani says. “I no longer pay rent, and I afford to send my kids to school and feed them still, thanks to likilimba.”

Ndulani has become an example of how women can succeed using likilimba, she says.

Roda Kavugho, 75, Ndulani’s mother, says likilimba changed everything for the family. She is grateful for her daughter’s resourcefulness and generosity.

“I lack nothing,” says Kavugho, a widow and mother of eight. “She feeds me and does everything to help me survive. She has provided for me since 2006, thanks to her likilimba.”

Throughout Goma, the capital of the North Kivu province of Democratic Republic of Congo, women are banding together to support each other’s entrepreneurial efforts. Following examples set by successful local female entrepreneurs, women from a variety of socioeconomic backgrounds are finding success with likilimba, an innovative form of micro-lending outside the realm of formal financial institutions.

Likilimba is a word from Lingala – a language spoken widely throughout northern DRC – that means cooperating. Likilimba offers a unique opportunity for mutual self-help that enables women to start businesses, participants say.

Likilimba, which can be available to men as well as women, works on a collective agreement among members who aim to mutually improve their economic fortunes.

Women join savings associations to become self-reliant because traditional lending routes are often closed to them.

Likilimba groups report exceptional success rates for return on investment. Over the past four years, 100 percent of the likilimba loans in her group have been repaid in full within the allotted 40 weeks.

The microfinance sector is among the fastest-growing in DRC, rocketing from 100,000 clients in 2007 to more than 1 million in 2013, according to the World Bank. The World Bank estimates that 38 percent of microfinance clients are women, but likilimba participants say their system often operates below the radar of traditional microfinance opportunities.

Congolese women face many barriers to accessing traditional financial resources. Antiquated laws requiring a husband’s consent to open bank accounts and start enterprises limit women’s participation in the business sector, according to the Women’s International League for Peace and Freedom, or WILPF, an international advocacy group dedicated to nonviolent progress for women. Such laws exacerbate the poverty that is endemic to DRC, where 63 percent of the population is poor.

Married women often cannot independently sign certain contracts, including those needed to obtain bank loans, open accounts or start businesses, according to a 2010 WILPF report. As a result, most of women’s financial activity happens outside the regulated sector.

Throughout the community, women say they have been inspired by Ndulani’s example. They are seeing the benefits of joining likilimbas.

“Devotte Ndulani has served as an example and encouraged low-income women to join likilimba for their progress and that of their families,” says Denise Kavira, a tomato seller who joined Ndulani’s likilimba three years ago.

Women in a variety of entrepreneurial ventures say that participating in likilimba has been key to success.

Alice Debora, a shoe seller, says she has been better able to care for her family and run her business since joining a likilimba.

“With likilimba, I afford to send my three sons to school, feed them and pay the rent,” she says. “I am always inspired by the courage and advice of Ndulani.”

Matabishi Kavira, a seamstress, says likilimba has taught her better financial management skills.

“I used to keep my money at home and quickly spend it,” she says. “With likilimba, I can afford to cater for the needs of my household and those related to my sewing business.”

Throughout Goma, the traditional financial sector is watching the success of likilimba, says Mpala Matisho, president of the local chapter of the Village Savings and Loan Association.

Likilimba has prompted traditional financial lending institutions to accept more nontraditional applicants, she says.

“My association now has 30 clients, including orphans, widows and single mothers,” she says. “We help with savings and give out loans.”

Members of the association meet once a week to pool 500 francs (54 cents), Matisho says. A member who borrows money must pay it back in three months with 10 percent interest.

The association also encourages participants to open savings accounts and look into credit opportunities and collective savings agreements.

“This contributes to boosting women’s self-reliance,” she says.

However, Ndulani says her distrust of banks is what compelled her to deposit her money in likilimbas.

Matthieu Muhindo Syawite, manager of the local COOPECO credit union, says likilimba has pros and cons.

“On the one hand, likilimba is of particular importance because it is a form of mutual self-help among its members,” he says. “But there are drawbacks to unregulated lending that keep women out of the traditional financial arena.”

Depositing money in a likilimba does not provide sufficient financial security, he says.

“On the other hand, it is not a form of savings,” Syawite says. “It’s an obstacle to savings. The money generated from likilimba is intended for immediate spending. If women want to make savings, they should open an account with a financial institution into which they can deposit the money of members.”

But instant access to capital can be a powerful thing for women, says J.B. Kambale Nzanzu, monitor of finance for GAMD, Groupe d’Aide Mutuelle pour le Développement, a small financial cooperative in Kirumba, a rural area 120 kilometers from Goma.

“Likilimba has an overall objective to fight against wasted income opportunities,” Nzanzu says.

Likilimba has countless benefits for women, including the solidarity that comes from lending within a mutual aid association and improved living conditions that arise in a community with multiple entrepreneurs. Above all, access to capital gives women opportunities to rise out of poverty by accessing community development opportunities, including solar panels and modes of transportation.

Ndulani agrees.

Likilimba continues to give her new opportunities for success and entrepreneurship, she says. For her next venture, she is considering buying a public transport bus.

“I am passionate about likilimba,” Ndulani says. “I have achieved my goal: I provide for my mother and my children. It gives me great joy.”

No sources in this article are related to each other or the reporter.

Sylvestre Ndhayo, GPJ, translated this article from French.