CHAPTER FOUR: FONGS AND FONGS -FINRURAL
4.1 From failures to new financial initiatives
The «Fédération des Organisations Non
Gouvernementale du Sénégal» (FONGS) is a rural households
apex association originated in 1976 and licensed in 1978. It aims at restoring
the farmers' status through the accountability and the empowerment in
solidarity in order to address different challenges of rural areas. It is
composed of more than 150000 members split in 31 affiliated associations
throughout different regions of the country (Périlleux, 2011; Ndiaye,
2012)
The FONGS initiative is performed through two main axes:
- The political axis which is involved in the farmers' welfare
advocacy by fostering social and technical intercourse amongst affiliated
organizations and by lobbying.
- The economic axis is related to the capacities building of
rural households, the strengthening of agricultural management, the betterment
of local financial systems, and the enhancement of agricultural products added
values (FONGS, internal document).
To attain the economic axis, a number of initiatives have been
performed from 1984 to 1992 through financial operations, credit backing to
affiliated associations, agricultural commodities exchanges programmes, etc.
Unfortunately, many of those initiatives were abortive due to four main
reasons:
- Targeting failures: Credits were catered for people who
could not repay and unremarkably defaulted.
- Lack of efficient means and procedures for the scrutiny of
funded activities;
- Mismatches between projects submitted by associations'
leaders and the reel needs of members;
- Mission drift in the allotment of the financial resources
incurred from donors and partners (FONGS FINRURAL, 2011)
It has appeared that the FONGS' mission was not to directly
cater financial services for its affiliated development associations; which
have therefore been supported to launch self-managed and free savings and
credit unions to face up financial needs of their members. Thenceforth, the
mutuals were set up as twin associations of mother associations of which they
were perceived as the main financing tool.
4.2 The FAIR, the start up of the networking process
One major project carried out by the FONGS remains the
Facilité d'Appui aux Inititaives Rurales funded by Luxembourg government
through the NGO SOS FAIM (Belgium and Luxembourg). This initiative was
conceived as a response to miscellaneous unmet financial investment needs of
rural households.
With a global cost of about 514 millions CFA, one part of the
fund assists household investment needs through long term investment loans (325
millions CFA). The second part of the fund (190 millions) helps at subsidising
technical assistance to 15 MFIs through which investment loans are provided to
rural households in accordance with FONGS affiliated associations.
Started since 2007 the project endeavoured at experiencing the
rural investment through new financing models: no collateral, low interest
rates, flexible long term repayment schedules, etc... After five rounds of the
project through which about 353 millions CFA were disbursed to found 257
projects it appeared important to strengthen MFIs involved in the project by
networking them (Ndiaye, 2012).
The figure 3 below illustrates the links between surveyed MFIs
and farmers' organizations affiliated to FONGS:
Figure 3: Linkages,
technical and financial flows between FONGS and FONGS FINRURAL
Orientation, Financial and Technical
support
FONGS-FINRURAL
FONGS-Action Paysanne
Rural Households (RHH) and other basis
organizations
Savings and Credit Unions
Rural and Sub Urban Associations
Rural Households (RHH) and other basis
organizations
Financial and Technical support needs:
Source: Our survey (mai-august
2012)
Existing Financial Products Needs:
Technical support delivery:
Financial Product designing and delivery :
A foremost analysis on this framework shows up that financial
needs of rural households should first be reported to their development
associations which will transfer the information to the upper levels of FONGS.
Thenceforth, the finance network will base both on its financial assets and on
the FONGS vision to devise and provide required loan products to rural
households accordingly.
The main concern of this process is to preclude a
mismanagement of FONGS and its partners' funds directed to financial needs of
rural households, thereafter help improving rural households' financial access.
Besides, strong links could be sustained between the finance network and FONGS
and permit credit policies and strategic orientations of mutuals to unceasingly
meet with FONGS vision and needs of farmers organizations, unheeding the
growing competition in the industry.
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