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Flourishing business thanks to a refrigerator

How microloans in Senegal create new work and give people new hope.

Woman next to a refrigerator
Mbayang Fall next to her new refrigerator – the heart of her business.

Flourishing business thanks to a refrigerator

Mbayang Fall used to work in Senegal’s capital of Dakar as a cleaning woman. It was exhausting and tough, but she was able to make a living. Then her marriage fell apart, she divorced her husband and returned to where she was born and raised, to a place called Kébémer. It is a small town about 150 kilometres northeast of Dakar with a population of around 20,000. It was here that she started making breakfast baguettes and selling them at a local school.

She was able to earn enough to keep her head above water but nothing more. It was not until she received a small loan from the Senegalese microloan institution Baobab, which KfW Development Bank supports, that she was able to make her breakfast business flourish. And “only” thanks to a refrigerator that she financed with the loan.

Since then, she has been able to offer many more products and charge higher prices; besides her breads, she now also sells a kind of ice cream made from hibiscus flowers, sweet milk pudding and the baobab fruit of the monkey bread tree, which is so widespread in Africa. She now also sells fruit salad in small bowls and many other things. And this is all made possible by a refrigerator. “I have to work a lot,” she says, “but I can earn enough with my business to support my mother and my daughter.”

Woman next to opened refrigerator
Happy about her new refrigerator – and the new opportunities it created for Mbayang Fall.

Shop owner Habib Seck, who has already received several loans from Baobab and has always repaid them on time, tells a similar story. These opportunities have given him the ability to steadily expand his business. The current loan is “the largest I’ve ever had,” he reports proudly. It is the equivalent of EUR 4,500 and allows Habib Seck to stock items in a whole new way; he can now buy more supplies and thus generate higher sales. At least that was the case until the outbreak of the coronavirus pandemic, which has now set him back considerably, he says. But he hopes that his business will pick up again soon.

Man with child on front of his stock
Habib Seck with some of his stock.

The two are part of the important sector of micro and small entrepreneurs in Senegal who dominate the economy there with 99% of all businesses. Most of Senegal’s 15 million inhabitants work in these kinds of businesses, often in agriculture, but increasingly also in the steadily growing service sector or in construction.

Papa Ndioba Kebe, who also benefits from a Baobab loan, also works in this sector. He returned to his home country a while ago after spending ten years as an immigrant in Italy. With the loan, he was able to create a new livelihood, opening two workshops; in one, he makes metal windows and doors, in the other, wooden beds, tables and cupboards. In the meantime, he even trains young people in both workshops, nine in total. He has already received several loans, says Ndioba Kebe, and has “paid them all back”.

Man in his wood workshop
Papa Ndioba Kebe in his wood workshop.

So do most of Baobab’s approximately 30,000 customers; the share of loans at risk of default is less than 5%. Baobab is one of the largest microfinance institutions in Senegal and – through another bank that has since been merged with Baobab – was supported until recently by KfW Development Bank on behalf of the German Federal Government. The aim of the measure was to provide the business-minded population with adequate financial services such as small loans, savings products and microinsurance, thus safeguarding the employment and livelihoods of people like Mbayang Fall, Habib Seck and Papa Ndioba Kebe.