Credit with Education

Credit with Education is Freedom from Hunger's worldwide strategy to bring self-help solutions to the fight against hunger--one family at a time. We launched the first Credit with Education program in 1988 in West Africa. What was then a bold new strategy—combining microcredit loans to very poor women with vital health and business education—has become recognized as a powerful and proven approach to helping families become food-secure.

How does Credit with Education work?

Freedom from Hunger and its local partners give small groups of women access to a loan and offer them a safe place to save a little money.

The loans are called “microcredit” because they can be as little as $5 or as much as $300. The loans transform women into entrepreneurs who run home-based businesses, such as making food products or crafts to sell. No longer forced to scrape together whatever money they can earn, these women generate a regular income, along with a new sense of accomplishment and self-esteem.

But increasing incomes is only the beginning of this self-help process. Freedom from Hunger’s Credit with Education program also provides vital education to women at their weekly meetings. As women gather to pay back their loans, they learn about health, nutrition, family planning and sound business practices. Using the additional income they earn from their businesses, the women act on this knowledge and begin to break the cycle of chronic hunger and poverty.

Women in developing countries are hardworking and eager to make life better for themselves and their families. Freedom from Hunger ensures they have the resources to do just that.

The Impact of Combining Credit and Education

Money is a powerful resource. So is education. Armed with one or the other, a woman can accomplish a lot for her family. But when a woman who has lived her entire life on the margin of survival suddenly gains access to these resources in a single integrated program, she experiences real empowerment. Simultaneously, she learns how to help her children and earns the money she needs to act on her knowledge. It's the combination of these services, efficiently integrated by Credit with Education, that is giving poor women around the world hope for the future.

How Microcredit Works

For a woman who lives on $1 per day or less, a loan of as little as $50 can transform her into a businesswoman. Freedom from Hunger's Credit with Education program provides groups of about 25 women with group loans that are then divided among the women according to informal business plans they have developed for their micro-enterprises. The women themselves perform the loan analysis, each reviewing the other’s plans for starting or growing a business, expanding with a new product line (like adding dried fish to a selection of pounded millet) and making suggestions for success. The women usually have no collateral to secure their loan and in a Credit with Education program, none is required. The women’s group itself provides the guarantee, with the women co-signing for each other. Each loan cycle lasts just sixteen weeks—a timeline designed to match the needs of business growth in traditional markets. Affordable interest rates on loans ensure the sustainability of the local program. In a few short years, the women become full partners in their own development---a source of real pride.

A Lasting Resource--Knowledge

To overcome problems that money alone cannot address, Credit with Education also provides vital information on health and nutrition at weekly meetings. After the women have made payments on their loans, they learn and share culturally appropriate practices that will enable them to improve the health and nutrition of their children, space births and manage family size, prevent the spread of HIV/AIDS and even manage their businesses better.

Because most women who are living on $1 per day or less have had little or no schooling, many cannot read or write. But neither skill is necessary in a Credit with Education learning session. Field agents (who are local people trained in adult education techniques) present relevant and practical information through story, role-play and song. The women use small-group discussions to practice problem-solving skills and agree to support each other between meetings when new practices are being tried.

Working with Local Partners

Building sustainable programs that create lasting change requires that we equip local people and organizations to implement those programs for the long term. All Credit with Education programs must be or become locally owned and operated. To date, Freedom from Hunger has trained more than 50 local organizations in 16 countries to establish Credit with Education services for poor, rural communities.

In Freedom from Hunger's sixty years of experience, we have learned that people do not want improvements in their lives to simply "happen" to them. They want to help create change and, ultimately, to bring about new change. Freedom from Hunger's role is to offer Credit with Education, to respect the knowledge and unique resources of local people, and to further their commitment to help themselves and their fellow citizens.

Training local organizations to implement Credit with Education for the long term is also important because they can then become a permanent resource to local women. Freedom from Hunger’s involvement with local organizations is quite intensive at first as we train staff and provide technical assistance. Later, these partnerships become a rich exchange of ideas and innovation for improvements.

This strategy also enables Freedom from Hunger to achieve extraordinary leverage. Although our full-time staff is less than 70 people, through partnership we can directly benefit hundreds of thousands of women and their families for a total impact reaching into the millions of people.

Proven Effectiveness

Freedom from Hunger has proven that Credit with Education works. Our rigorous, scientific studies have measured numerous positive impacts on women and children. In Ghana, 90 percent of Credit with Education participants reported increased income since joining the program. Seventy-eight percent said they are "very confident" they know how to prevent their children from getting diarrhea and other diseases, as compared to 31 percent of non-participants. In Bolivia, Credit with Education participants are much more likely than non-participants to get involved in local politics and to hold office. Most importantly, the studies proved Credit with Education's positive effect on the nutritional status of children and the food-security status of the families involved in the program. Many other studies reinforce these findings and document, among other things, that we truly reach the very poor, that women value the combination of microcredit and education, and that their economic and household standing improves as a result of their participation.