David Ogbonna

Ashoka Fellow
Nigeria
Fellow Since 1991

Citation

This profile was prepared when David Ogbonna was elected to the Ashoka Fellowship in 1991.
The New Idea
David's imperturbable search for ways to practically help the poor first led him to recognize what doesn't work: most banks, cooperatives, and government programs. He worked in or with them all, one after the other, but ultimately he found that neither their loans nor their other intended benefits were likely to reach the poor. Inefficiency, complexity, delay, high costs, incomprehension of and little communication with the poor, and greater priority for political and/or personal profit objectives all got in the way.
He therefore set out to help the poor mobilize their own savings and closely linked self-help and self-financed development initiatives. To do so, over the last decade he has repeatedly adapted traditional institutions, invented new patterns, and then experimented with and refined these ingredients into a new grassroots savings, lending, and development system that serves the poor efficiently and on a large scale.
David's first step is to encourage and help existing grassroots associations of all sorts to save systematically no matter how limited their resources. This opens the way to financial empowerment for women, small farmers, crafts people, youth groups, petty traders, and especially traditional savings clubs.
At the same time he's helping these groups learn both the basic concepts of lending (e.g., the role of interest) and how to develop sound, highly profitable possible uses for investment funds once they are available. Thinking through improved farming or production techniques, the necessary marketing components, etc. requires time, specialized resources, and group application and discipline.
As both savings and the ability to use savings grow, the group eventually takes its first loan. The learning process engagement redoubles.
As the primary associations' own money is involved, mutual accountability provides the means of assuring repayment of both group and individual loans. The example of achievement and increased prosperity of participating associations and villages draws the attention of other groups which also want to benefit. The impact of David's program thus continues to expand beyond the original local government areas and state where he began.
David's approach accomplishes many of the same things as Bangladesh's Grameen Bank. However, he had developed the approach's basic design well before word of Grameen's success reached Nigeria. Some of the insights, e.g., reliance on group responsibility and self-interest rather than physical security, are the same, but much is different. David's approach grows organically out of Nigeria's markedly different culture and institutional patterns. It focuses more on both savings and preparing for investing. It also draws in and builds much more on a broad array of existing community institutions, traditional clubs of friends that come together monthly to create a money pool that goes on a rotating basis each month to one member–thereby giving the members periodic capacity to make a major investment.
The Problem
The Strategy
The Person

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