The Importance of Educating Rural Communities in Financial Management

By Abdul-Hakim Al-Hassan

After I had gone through financial management course at University and underwent some training on cooperative societies (organized by ICS Cohort 2 and delivered by the Department of Cooperatives) it came to my attention that the reason why some people fail in their business activities is due to the fact that they fail to realize that it is not just how much money you make but rather how well you manage your money. People who are poor become wealthy as a result of prudent business and financial management.  The women engaged in agricultural business activities in rural areas can make money but can’t manage it well and so they are trapped in a cycle of poverty. 

Picture of the current IGG in Wayamba

As a result of financial illiteracy, they fail to distinguish assets from liabilities hence, they tend to overspend on liabilities and don't keep track of their assets or fail to count their profit/losses. In the community I am posted to, called Wayamba, there was previously an Income Generating Group (IGG) called 'Yellim' (which means salt). The group members would all contribute money to buy salt from the market and then store it in a warehouse. They had a group of people that would buy the salt at a slightly higher price. Initially, this was successful; however, there was an instance where two leaders started taking money from the group contributions to buy personal items, e.g. buying cloths to give to their daughter for her wedding, rather than investing the money into the group to improve the business. Because they were leaders, they did not pay back the money and this caused the business to collapse. The two leaders lacked financial literacy because they spent the money on things that were not related to business and did not appreciate the effect of using the business' money for their personal use.

In addition, these women fail to cultivate the habit of saving and live hand to mouth and often are unable to account for what they used it for. Through the introduction of NGOs and education into some communities, some groups have started collective saving schemes. Although these schemes can be quite successful they fail to encourage the women to collectively pool their resources together to minimize business expenditure. In some cases, they are able to form groups but again do not work collectively, rather they work individually and so carry all  the risks of a business rather than spreading it across a group. The idea of pooling resources, working collectively and sharing risk are some of the fundamental aspects of forming a cooperative and is one of the reasons why cooperatives are effective for rural income generating groups that only produce a surplus, as opposed to a profit. 

Women selling shea butter at Katinga Market

I began to think about the people in the villages and rural communities, specifically the women who have not received formal education and so are part of the vulnerable in Ghanaian society. These women work hard to take care of themselves and their children and often they have business ideas which they try to put into practice, for example by engaging themselves in farming or alternative business activities to their usual income generating activity, such as Shea nut picking or rice processing, to mention but a few. It is my impression that whilst smaller sections of them may succeed, the majority fail in the process because they can’t sustain the business as a result of lack of financial management skills, such as good record-keeping skills. From my experience working with the community I have found that the women are eager to learn new skills but lack the opportunity to do so. That is why I feel our work is so important. 
   
Some women try to organize themselves into IGGs to help each other; however, some fail because they are not cooperatives and therefore lack the knowledge and training that is given in the process of registering as a cooperative society.  For example, if the leaders in Yellim had been taught about record keeping and the responsibilities of a leader, they would have realised that they cannot use the business' money for personal use. Forming a cooperative also helps IGGs to receive financial support for their income generating activity from NGOs and the government.
 

Therefore, I decided that I would like to use the knowledge I acquired in my own financial management training to the benefit of women in rural communities so that they could gain more benefits in the income generating activities that they engage themselves in. However, the question was how I achieve this? 

 

A picture of me delivering a training session to the IGG in Wayamba on record keeping

I was able to achieve this dream by working with ICS. I was enrolled onto the programme as a volunteer in the Non-Formal Education Department (NFED) Tolon livelihood project to train women in pre-selected income generating groups on how to form cooperative societies. Part of this training involved teaching the women financial management and record keeping, which is a key requirement to become a sustainable cooperative society.

As the saying goes: “If you educate a man you simply educate an individual, but if you educate a woman, you educate a whole nation." By ensuring that our programme and the training we deliver to the communities, which is NFED inclusive, is sustainable we hope that our teachings can be used by facilitators in the communities to pass the information on, from community to community and, as a result, we hope that the communities we have started to work with on this project will go on to form cooperatives. Perhaps, by doing so they will inspire another group or even another generation in rural communities to form their own cooperative society.  

Knowledge is good!

Post By: Sita Violet

Time is flying away so quickly and yet I have settled into Ghana life so thoroughly I feel like I’ve been here for months! I love my team to bits, I really couldn’t imagine a better group of people to share this experience with. My host home is remarkably generous and accommodating, and my counterpart Ayisha is really helpful with teaching me the customs and ways of life at home. So far, being in Ghana has been an immensely positive learning experience and I am feeling really hopeful for the future of this programme and grateful that I am a part of it.

Meeting the Communities.

As we are working in several communities, our group has been split into project pairs to be able to give the best of our attentions to each community. I am working with an income generating group in the Dundo community with my project partner, Issahaku! (We make a great team woo)

             Meeting the community for the first time was a really exciting event, to finally meet the IGG we are here for, but also slightly nerve wracking for me because of the language barriers. How was I going to be able to understand anything, or be understood? Thankfully I am paired with Issahaku, who is brilliantly patient about translating each and every point needed and is happy to translate my questions across. Me and Issahaku had prepared some questions the day before that we felt it would be most useful to know straight away, about Dundo and about the IGG there (Who have named themselves ‘Bangsim Viella’ which translates to ‘knowledge is good’) Knowing more about the challenges they face and the reasons for coming together as this group will really help us to formulate a plan of action when working back in the office later on, and to pass on to the next cohort of volunteers.

                I felt very positive after the introductory visit, the ladies of the group seemed to be very happy that we were there and eager to speak their answers to the questions we prepared, we actually ran over time in our community visit by a quite lot because of how much valuable information we gathered from this one first visit. No bad thing! I think a highlight of the visit for me was at the end, where the women sang a beautiful song together, later which Blaise told me was all about how learning is good, tying into the group name. Also the generous gift to the whole group, of Yams, which I am probably addicted too.

Me and Issahaku with our Dundo IGG group

Katinga Market.

On Thursday, we went to Katinga Market, just outside of Tolon village, to get more of a taste of where the end products of our community will end up, and the goals that the IGG’s are working towards in terms of selling their produce. As soon as we stepped out of the TroTro we could immediately sense just how vibrant and busy the market would be, compared to the quiet streets that we are used to walking down in Tolon. It seems like the market is the weekly hub of activity in the Tolon area, not only a chance to sell your produce and find (almost anything!) that you will need for the week, but a very social event, where friends from different communities can come together.      

Katinga Market

Amongst all the familiar stalls, selling jeans and shoes and other such everyday things, there was many things that us UK volunteers had never seen before, unfamiliar vegetables, beautiful fabrics and super light bowls made out huge hollowed fruit shells. Walking through the chaotically busy but still neatly organised stalls, it was very useful to find sellers of such items as shea butter, as then we could get an example of how our communities may price and present their finished products. We found that Shea Butter seems to be only sold in this particular market in huge quantities, subsequently at a large price. Too much for one person to carry on their own! This gives us a small idea of what kind of things we will need to start thinking about in terms of giving advice to our IGG’s.

Planning our next community visit

Even though it is only week two, I already feel as if I am slowly developing a huge amount of skills. I came into this ICS trip with no previous experience of this specific type of work that we are doing. Baseline research, non-formal education, delivering guided learning sessions and community profiling as an example of all the new things I am learning. I tend to be a very practical learner, learning as I go along, so whilst we are all researching and learning about group and community profiling, being able to put it into practice a few days later is a really valuable thing for me to be able to do. I feel like ICS and international service in Ghana is going to be immensely useful for my future plans, and my confidence into putting them into practice!