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Microfarming and Microcredit

One of the basic problems in townships throughout Africa is lack of economic opportunity.  In many settlements, as much as 90 percent of the population is unemployed.  The resulting lack of capital effectively precludes the development of local business, and means that the residents of such townships are forced to depend on charity for their basic needs.  In order to address that problem, AYAF will implement a microfarming and microcredit lending program designed to stimulate economic development within the townships.

As the first step in that program, AYAF will select a township and partner with local organizations to purchase small tracts of land adjacent to the settlement, which will be farmed by the residents of the township.  Most of the produce grown by those residents will be used to supplement the diet of the township’s citizens, while a small percentage will be sold.  The individuals who choose to participate in the program will keep a portion of the proceeds of those sales, and the remainder will be contributed to a central lending fund. 

The fund, which will be comprised of both farming proceeds and direct capital injections from AYAF, will then be used to make microcredit loans to local entrepreneurs.  For example, an individual with skill in weaving could obtain a small loan in order to allow him or her to purchase cloth, or an individual with a car could get a loan to obtain him or her to purchase the gas needed to start a taxi service between the township and the nearest city center.  As individuals within selected townships become more profitable, they will have more capital to spend on goods and services, thereby stimulating the local economy.

Previous Project: Orphan Care Centers

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