This document summarizes a study on whether microcredit services can alleviate poverty in small-scale mining communities in Africa. It discusses the context of artisanal small-scale mining in Ghana and the challenges of providing microcredit to such communities. A case study from Ghana shows that a microcredit program provided loans to mining cooperatives for equipment purchases. The loans had conditions requiring sale of gold to a particular buyer and repayment terms, with the aim of helping lift the communities out of poverty.

2. Hilson,
G.,
Ackah-­‐Baidoo,
A.
2011.
Can
microcredit
services
alleviate
poverty
in
African
small-­‐scale
mining
communiAes?
World
Development
39(7):
1191-­‐1203.

3. OVERVIEW
1) The Context
2) Microcredit Challenges
3) Case Study from Ghana

4. The
Context
1) The
‘Izes’
• Legalize
• Formalize
2)
Huge
tasks

7. Poverty
Trap

8. The
Context
• Chinese
Merchants
• ‘Chang-­‐Fa’
• Kumasi
Magazine

9. The
Context

10. The
Context

11. Microcredit Challenges
 ASM

12. Microcredit Challenges
 ASM
 Illegal
 Perception Issue: ‘Rogue Entrepreneurs’,
‘Wildcat Operators’

13. Microcredit
Challenges

14. Microcredit
Challenges
‘The
danger
of
galamsey
opera3ons’
hTp://opinion.myjoyonline.com/pages/feature/
201202/81792.php
‘Impose
s3ff
Sentences
on
Galamsey
Miners!’
hTp://www.ghanaweb.com/GhanaHomePage/
NewsArchive/arAkel.php?ID=229917
‘Five
persons
in
court
for
illegally
entering
forest
reserve’
hTp://news.peacefmonline.com/social/
201202/94423.php

15. Microcredit Challenges
1) Adequate substitute for a lack of
financial collateral

16. Microcredit
1) Adequate substitute for a lack of
financial collateral
2) Borrower participation
3) Absence of a subsidy

17. Past experiences
MEDMIN/APEMIN in Bolivia
CEDECOM in Ghana
MICROCREDIT CHALLENGES

18. A
Case
Study
of
Ghana

19. A
Case
Study
of
Ghana
Source:
www.ghanadistricts.org

20. A
Case
Study
of
Ghana
• ‘Asset-­‐less’
• 97%
poor
• Not
much
farming
• Gold
‘re-­‐discovered’
there
in
• Yale
or
Yele

21. A
Case
Study
of
Ghana

22. A
Case
Study
of
Ghana
1) License
OperaAons
2) CollateralizaAon
3) Borrower
ParAcipaAon
4) Equipment
Needs:
A
Group
Effort

23. A CASE STUDY OF GHANA
Conditions of the Loan
- Sell to PMMC in Bolgatanga
- 7.5% interest
- Repayment

24. A
Case
Study
of
Ghana

25. A
Case
Study
of
Ghana
Equipment
Quan3ty
Details
Cost
Diesel
generator,
125KVA
Two
• DEUTZ
Engine
• Stanford
Alternator
• Deep
Sea
Controller
• Four
tons
¢64,000
Silenced
generator,
135KVA
One
• Perkins
engine
• Four
tons
¢32,728
Pedrollo
electric
submersible
Nine
• 7.5
HP
¢17,100
Atlas
Copco
jack
hammers
and
accessories
Nine
• 23
kg/each
• 360
m
of
one
inch
hose
pipe
¢20,032
Ingersoll-­‐Rand
portable
air
compressor
Three
• Diesel
full
capacity
• 250
CFM
pressure
¢56,042
Fuel
and
“Start
up
capital”
N/A
¢33,356
Total
¢223,300
US$1
=
¢1.89

26. Lessons
1) Onus
of
Responsibility
2) Problems
3) Two
Way
Street

27. Thank
You