Convincing the Banks

The Village Industry Services(VIS)was implemented in the Northern Province, Zambia with the aim of tackling issues of rural development with emphasis on labour intensive enterprises.

VIS works closely with government departments and other voluntary bodies in the country and is supported by the Norwegian Ministry of Development Cooperation(NORAD)which provides US$ 380,000 anually in technical assistance and loans.

The target group of VIS is defined as any poor person who has no access to bank loans, having an economically viable existing enterprise or ideas for one.

The scheme is primarily aimed at women.But it also involves a large number of men in its operation. In fact it is said to be more popular with men, who make up the bigger percentage of beneficiaries.The reason for the poor participation of women has been attributed to high illiteracy among women and the lack of exposure to ways of earning a living other than everyday farming and street vending.

VIS loans are provided for non traditional ventures such as tailoring, running of restaurants, bakeries, mills, production and repair of farm implements, food processing, construction materail and metal fabrication. VIS is selective in the projects it funds and picks sound income generating productive projects.

To be eligible for a loan, beneficiaries must possess specific qualifications required by VIS.

Every loanee is compulsorily required to personally manage his/her project which should be the loanee’s main source of income. THe project can employ only upto 10 employees and the assets and capital must not exceed KW 200,000 (US$20,000)and KW 50,000 (US$ 5000)respectively. Also, the project must be 100% Zambian owned.

As the scheme caters to the rural illiterate, who at first did not understand the difference between a loan and a grant, VIS has developed an educational campaign about and on the credit scheme which is publicised widely in the target area through radio and through meetings held for village communities.

Once the target group members are selected, another training course is conducted by VIS to prepare the benefciaries for the scheme. These courses are one week in duration and aim at improving the skills necessary for the beneficiaries’ various projects. Emphasis is placed on educating entrepreneurs on how to manage and run their businesses effieciently at maximum profit.