www.GDCU.org: - Notes From the Field

The HIV/AIDS crisis is causing a social, political and economic crisis in Africa. Nearly six million people are infected in South Africa - the second largest number of any nation in the world. By 2010 it is expected that 25 million children will be orphans due to AIDS in Africa. In addition to being left parentless, these children have been left homeless and penniless. Most are living on less than $1 per day.

Although microfinance organizations have started lending to the poorest of the poor, none of them have targeted youth. This market has remained virtually untouched, yet it is this age group that desperately needs hope and opportunity.

By 2010, the United Nations estimates one-third of South African 18-year-olds will have no mother (The Economist, p. 41, 11/30/02). In much of sub-Saharan Africa, girls under 18 are four to seven times more likely than boys of the same age to become infected with AIDS, due to sexual coercion and violence against women, child marriage, polygamy, and the widespread belief that having sex with a virgin will cure AIDS. Girls are frequently forced into sex with older men in exchange for food for their families or money for school (Kati Marton, New York Times, 03/10/03).

In November 2004, sixteen year old Atwell Mkhize lost his father, and he and his mother moved from Johannesburg to Loskop/Emangweni to save on school fees.

In March 2005, after three months of training with MFY, Atwell received his first ever business loan for R170 (approximately $26) to sell kerosene, candy, chips, candles and matches.

After completing repayment of his loan in a twenty-six week repayment cycle, Atwell is currently earning R50-60 (approximately $9) profit per week. His business’s total net value is R520 ($80) including savings, business stock, and cash on hand.

2005 Star Performer – Atwell Mkhize
atwell.jpg (13375 bytes)

He has purchased food for the family, clothing, a bicycle, and a cell phone. The bicycle and cell phone will assist in the expansion of his business. His success demonstrates the potential of our pilot program

Microfinance for Youth Provides Solutions

Microfinance for Youth was started in September 2004 by Global Democratic Citizens Union to provide economic literacy, employment experience, AIDS prevention, business training and small loans to South African youth (aged 13-21), who are still in school or had to drop out of school to support themselves and their families.

This project targets the very poor (those making less than $2/day), orphaned youth (or whose parents are too sick to work). Microfinance for Youth currently has 68 youth banking members; 45 females and 23 males. Two teachers from Sizathina and three from Ngibongeleni High School in Loskop/Emangweni, KwaZulu-Natal have been trained and earn a stipend to coordinate and manage the Banking Clubs at their school. These teachers have identified orphaned and vulnerable youth in the area and brought them together in after school banking clubs.

At the end of our first year, through the combination of business profits and employment earnings, our loan repayment rates for both schools are 75% for the girls and 84% for the boys. We are working to distinguish and disseminate the best practices from the most successful youth businesses. In addition, we hosted an AIDS awareness fair, planted an organic vegetable garden, and have begun the refurbishment of our first school Commerce Center.

This pilot project’s school-based structure allows us to develop a youth program with low overhead and high visibility in the community. Students are learning and implementing practical economics and financial literacy. This includes employment experience, market research, accounting, writing and executing a business plan through the disbursement of small loans. Their business and employment income are providing for their family’s needs as well as building and stimulating the local economy.

Challenges to Date

Crime risk – Theft of business assets and cash
Transportation of staff and female clients, especially during dark winter months due to the prevalence of rape
Working with boys – Microfinance has struggled to offer meaningful and successful programs to males
HIV/AIDS – Loskop/Emangweni is centered in the heart of the AIDS pandemic with the highest infection rates in the country
Hunger – Many of our target population come to school hungry, and without a school lunch are often unable to concentrate for after school trainings and meetings

Why a Garden and Commerce Center?

Gives the students real-life employment, business management, and accounting experience
Lockers to protect students’ business assets and cash
Provides youth with a safe, highly-visible venue to sell as well as after-school training and meeting space
Organic garden trains youth in self-sufficient vegetable production methods, and supplies commerce center with an income stream

Funding Needs

Lockers and furniture for school Commerce Centers
Funds for developing a Commerce Center at the second high school
Security needs for Commerce Centers (locks, night watchman, security doors, and burglar bars)
Bicycles for field staff to facilitate home visits
Pick-up truck with canopy for transport (supplies, staff, and female clients)
School supplies and healthy food to sell
Subsidized school fees, uniforms and snacks
Staff salaries
Lending portfolio is being provided by Rotary International

Current Advisory Committee

Professor Muhammad Yunus, Founder and Managing Director, Grameen Bank
Marcia O’Dell, Founder of PACT Nepal
Peggy Clark, Aspen Institute
Marshall Rosenberg, Founder of the Center for Nonviolent Communication
Alex Counts, Founder and President of Grameen Foundation USA


	HIV/AIDS Crisis is Crushing South African Youth