Soccs and the City: How Social Capital Credits can help build resilient communities

COURTESY OF URVASHI KAUL

KUMASI, Ghana—Agnes Nti, a 49-year-old divorced mother of five and the sole breadwinner for her family, had been selling condiments at the Bantama Market in Kumasi, Ghana’s second largest city, for about a decade. But no matter how hard she worked, she was never able to grow her business. Nti had borrowed from two microfinance companies, which provided loans at 43 percent interest rates, wiping out any profits. In the past, Nti said, groups “were not concerned about our health or business development—all that mattered to them was how to make money from us.”

But with the help of something called Social Capital Credits, or SoCCs, Nti was able to secure a 12 percent interest loan and a more flexible payment plan. With the extra profit, she was able to add another table of goods to her stall, significantly increasing her income. Nti calls this table her “good luck table,” because the process through which she received the loan ended up benefitting her almost as much as the extra revenue.

The SoCCs project was founded on the idea that the seemingly intractable problem of poverty will not be solved by government action or philanthropic largesse alone. It will require grass-roots empowerment and a redefinition of wealth that takes into account the power of community. SoCCs are designed to encourage individual activities that create social benefit and help communities tap into and build their social capital. The concept is simple: By performing specific socially beneficial activities, people earn credits that can be redeemed for goods or services.

In the case of Nti, she earned over 250 SoCCs, which made her eligible for the loan, in large part by getting business mentorship and going to see the doctor. At one of these checkups, she learned she has hypertension, for which she now receives regular treatment. “This initiative is a godsend,” Nti said, “because I received free health screening and tips on how to safeguard my health in addition to business training sessions that helped me understand how to better manage my business and make more profit. The best of all is this collateral free loan I could get based upon the SoCCs I earned.”

At Bantama Market, each woman in the program can redeem SoCCs for rewards that include school supplies, access to low-interest loans, skills classes, and career counseling. At the end of 2015, a year and a half into the project, 138 women were enrolled in the SoCCs program, and nearly 200 collateral-free loans had been made to 121 women, disbursing 229,394 Ghanaian cedi, or appoximately $60,000. Of the 106 women whose businesses experienced increased profits, 90 of them (or 85 percent) watched their profits grow by over 50 percent.

Thanks to Nti’s positive experience and her success with the SoCCs pilot program, many more women were encouraged to come in for regular health checkups. Nti is now the leader of the Nyame Bekyere group, one of the 29 SoCCs women’s groups in the Bantama Market. These are self-help groups where members support each other and share their challenges. In addition to health-care support and child-care services that members provide each other, they also run the savings and loan programs themselves.

THE THEORY

This pilot program is different from directly providing checkups or microloans, because in order to earn credits, residents need to perform a set of specific tasks, not unlike working for pay. Participants, however, have direct say in what they accomplish and which services they spend their credits on. By the very nature of SoCCs design, it ensures that several socially beneficial activities are realized, providing a multiplier effect for each philanthropic or development dollar spent.

Current economic systems do not value non-financial capital. As a result, cash-constrained communities are deemed poor. Yet many of these communities abound with entrepreneurship, ingenuity, and social capital, which, owing to lack of recognition, are not valued.

Development efforts by international organizations, foundations, and governments...