Maroua, North Cameroon

A multiple win-win situation

Thanks to a loan granted by IPA at fair terms Aboukar Mahamat is running a business all the participants can benefit from.

«I'm more than satisfied with my business», says Aboukar Mahamat. He is obviously pleased. Mahamat, 38, lives in Maroua, with its 270,000 inhabitants one of the largest towns in Cameroon. He is married and has three children. His business is breeding cattle. He buys young or weak animals from nomads that are not fit enough to survive long walks.

He buys them at the price of 85 to 105 Swiss francs. Then he feeds them up so that they recover quickly. Usually he can sell them a few months later at a price which is 50 to 100 per cent above the one he paid himself, a considerable profit indeed!

The advantage of this system is that there are only winners. The nomads can sell their weak animals, Mahamat can employ a couple of herdsmen who look after them and by doing so earn some money to make a living, and he himself makes a profit. All this was made possible with the help of an IPA credit of 3,500 Swiss francs.

The money was raised by the Kirchgemeinde Unterlunkhofen and was offered at the following terms: period of validity 5 years (long enough to start a business and also to get through a bad year), 5 per cent interest per year, payable on the remaining amount. This means that Mahamat pays off a fifth of the total sum each year and interest only on the amount he still owes IPA. He doesn't have to pay any administration fee.

IPA offers fair terms, but local banks exploit their clients

Local banks offer loans, too, but at conditions which in the first place aim at making money for themselves, with the result that the borrowers end up in poverty. Terms might look like this: period of validity 1 year (far too short to start a business), 30 per cent interest and 10 per cent administration fee! Interest has to be paid at the beginning when the loan is granted. Here is an example: a borrower signs a contract for a loan of 10,000 Swiss francs, but he only receives 7,000 (interest deducted) and he will have to repay the total sum of 10,000 francs within a year. Aboukar Mahamat buys and sells cattle several times a year and it pays off! IPA offered him his loan in spring 2008. A year later he had already made a profit of 500 Swiss francs and he still had 14 animals he could sell.

Books and exercise books for seven nieces and nephews

Mahamat invests the money he earns in the education of seven nieces and nephews. Five of them are students at the college in Maga and the other two attend a secondary school in Zina. Mahamat buys their school uniforms, their shoes and their school materials and he also pays the school fees. None of them could go to school without his financial support.

«The terms IPA offers are unheard of in this country», says Aboukar Mahamat. And a group of women who were suffering from a Sahel Bank loan and for whom IPA has worked out a plan to repay an IPA loan, said: «Could IPA offer us such a loan, too? If IPA did, we would be rid of all our problems.»