Goat loans reach the end of their tether

The following post is written by Diane Bennett and Dennis E. Bennett. “Yes, but is it scalable?” is a question often asked of development interventions. Sure your life-saving malaria net program works in one village, but will it work throughout the whole country? Yes, cash transfers worked in Mexico but will they work in Sierra Leone?

Everyone knows that development interventions should be scalable. But sometimes… everyone is wrong. In our experience working in South Sudan, very short-term, totally unscalable solutions may be just the thing to address specific short-term problems and avoid perpetuating aid dependency.

In 2003, communities displaced from their homes by decades of conflict  were trying to re-establish themselves in Upper Nile, but local leaders found their energies consumed by the demands of growing grain to feed their families. To maximize their efforts on community development, we wanted to improve the food supply and infuse capital into villages, while respecting local mores. For Dennis, a banker who helps multi-billion dollar institutions manage their risk, the problem was an unfamiliar one: how to infuse capital into a cashless society?

Our research found tribes in the area bartering with grain, gold, goats, chickens and cattle. The small amount of circulating bills barely survives local termites, which can devour a pile of cash in just a few hours. Grain is commonly used, but attracts rats, which in turn draw poisonous snakes. In addition, grain needs seed and time for cultivation, depends on unpredictable rainfall, requires storage for excess supplies, and is more vulnerable in times of war. Searching for a better cash-less solution, we found goats. Goats are portable, require relatively little care, and since tribes in the region universally trade goats, this solution doesn't exclude anyone.

We made three loans of three locally-sourced breeding goats each (one male, two females), for a total investment of $300.  The loans were two years, and “repayment” was a reciprocal set of goats (from the progeny), so there was no interest or expense. The loans went to three community leaders, chosen by the communities. Our intention was to reinvest the “repaid” goats back into the village, making the program self-perpetuating. But the villagers had other plans.

Of the three loans, only one was repaid to us, an abject failure in finance terms. Instead, goats were contributed to other villagers to start herds, “paying it forward” rather than paying us back. Instead of continuing with our program, borrowers assumed responsibility and perpetuated the project not just to feed their own families, but to help the whole village.

Five years later, these villages no longer need external food assistance, this program no longer exists, and we can say the Yamachoma (grilled goat) is delicious.