DRC has the third-largest impoverished population in the world, and poverty is increasing due to the impacts of COVID-19. Against all odds, small-scale entrepreneurs in the DRC are navigating the precarity of day-to-day lives and have ambitious business plans. With a few hundred dollars in savings, they venture to open a small kiosk, a repair shop, or start cooking for sale.
Growing business capacity without access to affordable loans is highly challenging, but local banks are not there to accommodate the needs of the entrepreneurs. The lack of suitable finance is still one of the most critical bottlenecks for developing the private sector in Sub-Saharan Africa. Inspired by Congolese entrepreneurs’ resilience, Cordaid Investment Management is always seeking to facilitate financial inclusion through investments and research. Monitoring, evaluation, and learning allow us to understand whether our investments are achieving intended results and if we can improve our strategy to deliver more impact. And we always support and encourage our invitees to do the same.
To learn more about the livelihoods of Congolese entrepreneurs using the financial services of the MFIs in DRC, Cordaid Investment Management funded research for our partner Hekima. This MFI operates in the North and South Kivu region and develops financial solutions tailored to the needs of low-income households, mainly led by women. The financial diaries research, realized by an experienced team at L-IFT (Low-Income Financial Transformation), was meant to investigate consumers’ behaviours and help design the products that current and potential clients of MFIs need. At the same time, it helped to understand the impact of access to finance.
The research has generated deep insights into the livelihoods and environment of Congolese entrepreneurs. This report is intended to share learnings with regional finance providers and development institutions so they can design products and interventions for the borrowers and entrepreneurs.
In a two-part series, Faces of Microfinance, we explored the life stories of the entrepreneurs - MFI borrowers and saving groups members. In this publication, we dive deeper into the main takeaways from the research and explore the financial behaviour of MFI borrowers. We hope these insights would, in the end, facilitate entrepreneurs’ access to better services and, ultimately, a bright future for the country’s private sector.