(ERGO) – The International Bank of Somalia (IBS) and SOS Somalia have partnered to provide collateral-free loans to 87 small businesses in Dinsor town, Bay region, which is under an Al-Shabaab blockade.
Kataba Ma’alin Abdulqadir, a local businesswoman, told Radio Ergo that she has received an $800 loan to buy supplies to develop her small kiosk.
“I’ve already sent all the money I received to Mogadishu to get the food supplies and other items that I need for my store,” she said.
She procures the items she sells, including flour, rice, spaghetti, cooking oils, sugar and others from Mogadishu. The items are transported from Mogadishu to Ufurow, 45 km from Dinsor, then they are smuggled past al-Shabaab checkpoints, using donkeys, to the town.
Kataba uses her earnings from the store to cover the needs of her unemployed husband and their six children, including paying $15 monthly school fees. From February, she will also be paying back 10 per cent, or $80, of the loan monthly.
Abdulqadir Abdiwahab Abdisalan, the owner of another store in Dinsor, told Radio Ergo that the microcredit has come at an opportune time for him.
“I’m getting a loan of $900 to restock my store. This has come at a time when farmers in neighboring villages are harvesting and are therefore able to buy supplies from me,” he explained.
The microcredit support is a lifeline for small businesses, who are keen to continue their operations despite the Al-Shabaab blockade.
Abdiweli Mohamed Elmi, head of the investments department at IBS, said the microcredit facility would encourage small businesses in Dinsor and help them survive the blockade.
Loans are provided according to each business person’s capacity, but all have to repay within a maximum period of 10 months.
“Depending on their ability to pay back, some get thousands of dollars while others get as little as $500,” he said.
The microcredit scheme is considered the first by Somali credit institutions to support businesses in the blockaded town of Dinsor.