THEME: Women want loans for their farming and fish-trading activities.

A September 1999 IFAD socio-economic analysis in Sao Tome and Principe found considerable demand for credit among women. But it also discovered lack of understanding of how formal credit operated. Rural financial services were found to be at an early stage of development.

One of the reasons that targeting of women would be important on these islands is the often fluid nature of the household. There are two types of island economies, farming and fishing. Only 8% of the farmers are married, and 7% of the fishermen. Conjugal partnerships can be quite transitory. Women therefore need a source of income and food to assure their ability to support themselves and their children.

However, a factor to be taken into consideration is that a considerable amount of the island economy is based on barter rather than on cash transactions. Overall, only about 5% of women’s income is spent on food, as most food is grown or caught. Food is also bartered between agricultural and fishing communities, without cash being involved. Women such as the palayes, or female fish traders, are often the ones who do the bartering. So why do women need cash? When the study asked women in farm households and palayes what they spent cash on, there were considerable differences in responses:

There are, of course, variations between communities, farming systems and households. But what is common and surprising is the unusually high rate of expenditure among women on transportation, and the low rate of expenditure on food, education and health. (The reason for this is that vehicles have to be hired.) The hiring of labour and the purchase of plants and seeds are also high, but more expected expenditure items for women farmers.

The possession of savings is reportedly common among both men and women, as is the giving of informal credit. When women (or men, for that matter) on the island need cash, they tend to borrow from family members. Usually this occurs in the case of emergencies, such as illness and funerals. The successful palayes also act as informal lenders to the fishermen, when the latter need to purchase fishing gear. The fishermen repay them in the form of fresh fish, thus probably establishing a dependency relationship with certain palayes.

The study found a high level of demand for formal credit for productive activities on the island, especially among palayes.

Women farmers: Their highest priority was credit for the construction of henhouses and pigsties. Tools, equipment and plants or seeds were next. The amount they seemed to be interested in was about USD 100 for a loan period of 12 months.

Women fish traders: Their primary interest in credit was for improving transportation and for frozen storage of fish.

Women from both communities: Both types of women were interested in credit for processing equipment (for jam, dried fruit, cassava and maize flour and fish flour).

Women both from farming and from fishing communities were interested in individual loans, to be matched initially by limited amounts of savings. However, the study also noted that formal credit mechanisms were not well understood by the women (nor by the men, for that matter). While a formal credit initiative had existed, under NGO implementation, coverage had been poor and information on credit and savings very weak. The credit products had also been inappropriate to people’s needs.

The strong interest in credit needs to be assessed in the light of people’s limited understanding of formal lending. Nevertheless, the study suggests an active demand for production loans, in the case both of women farmers and of women fish traders.

Adapted from:

IFAD. 1999. Democratic Republic of Sao Tome and Principe: Participatory Smallholder Agriculture and Artisanal Fisheries Development Programme, Inception Paper, Appendix I, Participatory Socio-Economic Analysis. Rome.