When fashion met famine: Benetton's Third World crusade

The Italian clothing giant used to shock with its images - now it is spearheading a campaign to get Africans into work. Christena Appleyard reports from Dakar

Microcredits are the new black. That was the rather weak joke doing the rounds among the 200 international journalists who had travelled to the near-luxury of Dakar's best hotel to witness the launch of Benetton's new global communication campaign, Africa Works.

Alessandro Benetton, the appropriately elegant but surprisingly understated deputy chairman of the clothing giant, had flown into Senegal's steamy capital in West Africa to announce the company's decision to go into partnership with legendary African singer and anti-poverty campaigner Youssou N'Dour to support a new micro- credit system that they hope will prove a successful model for the rest of the continent.

It is a groundbreaking move for Benetton. The company is notorious for using disturbing images in its advertising campaigns. But it has never before linked itself with a programme involving direct action.

There is kernel of truth in the "new black" joke as, since the banker and economist Muhammad Yunus was awarded the Nobel Peace Prize for his work in Bangladesh, this type of microfinancing has been quietly revolutionising attitudes to solving Third World poverty.

It is based on the idea of giving small loans to people who have no credit history or collateral and are therefore unbankable. After a thorough auditioning of prospective customers and their projects, the applicants are loaned the money with only their word as collateral.

The latest scheme - called Birima after a former Senegalese king - will sanction loans for a longer period than other microcredit projects provided they can demonstrate a positive effect on the community and guarantee profits and development. If the model works, it will be launched throughout Africa.

We gather in a packed hotel conference room decorated with giant posters of Senegalese workers - fishermen, farmers and a toyshop owner who wears his toys as a sort of suit of armour.

The starkly beautiful pictures are the work of the young British photographer James Mollison. They are a world away from the shocking images of dying Aids victims, bloodied new-born babies and mating horses that played such a key role in growing the Benetton brand.

Today the company is present in 120 countries. It includes the brands United Colours of Benetton, Sisley, Playlife and KillerLoop. Its total yearly production is 150 million garments and it turns over more than $2bn (1.5bn). It is controlled by Edizione Holding, which is wholly owned by the family and is listed in Milan and Frankfurt.

This occasion promises to be interesting in several ways. First there is the spectacle of the awkward dance between the fashion industry and fashionable good causes. Nowadays this requires very subtle choreography if the company is to acquire any real kudos for its product. But the galloping narcissism of some high-profile players in the industry makes it very hard for many of the others to be taken seriously.

At the same time, the pressure for companies - particularly fashion companies - to demonstrate social responsibility has never been greater. Africa is a crowded catwalk for charity shows - crowded and highly competitive. The business TV channels are crammed with slick, expensive ads for giant charities fron-ted by celebrities, and today one nearby hotel is hosting a frankly ostentatious charity conference attended by embarrassingly well- dressed delegates. Add to that the whispers from the hardcore fashionistas that Africa is, well, a bit unfashionable and this is perhaps not an obvious choice for a company like Benetton.

The assembled audience is a mix of the glamorous, the curious and the sceptical. The presence of the saintly N'Dour ensures dozens of TV cameras, celebrities and a sense of occasion that sets this apart from a routine corporate event.

It's soon clear that N'Dour's Birima project is born of an acknowledgement that traditional aid is something of a discredited concept. Speaking from a stage, the singer sounds angry when he says: "Africa doesn't want charity any more. It wants repayable subsidised loans."

Later, speaking to a few of us over lunch by the swimming pool, he is no less emotional and much more explicit. "We are not here to ask for charity. It's a matter of dignity for the African people. I see this as a turning point. If people can't work, they lose their dignity. Working with [U2 singer] Bono, we managed to create a new diplomacy. By getting access to the right people, a lot has been achieved. But I believe this is now the way forward for us and hopefully for the rest of Africa. We will be talking to people and leaders about this microcredit scheme at the next G8 conference."

The interest rates for Birima are yet to be determined and the project will be run by a small team of modestly paid professionals. N'Dour will be the guarantor.