My take on microfinance

All in all I really think that microfinance is one of the best ways for women to get out of poverty, because they can build up their own business on their own, they only loan the money, but at the end they end up with, for most of them, a good profit. Doing it in groups also helps a lot, because if one of the women has to pay a sudden medical bill or something like that the others in the group has agreed to pay for her if she cannot. It is also really helpful to teach them about savings and book keeping so that they can use their money better and so that they know what they are spending it on. But I think my one and a half months was too short a time to be there.

Friday afternoon

We would visit every women’s group once a week to see how they were doing, to collect their loan repayments and sometimes give them business training. The Friday afternoon group is called solidarity. We gave them book keeping training and then the week after we checked their books, most of them were surprisingly good. One person earns maybe 40,000 a day and another a couple of thousands, so there is a really big difference, like in most of the other groups. We did a business women with the chairwoman who sells tea spices. This group is the poorest one that we have given a loan and we therefore also moved more slowly forward in the amounts. One of the women sold stones and charcoal and her profit was less than what she had spent buying the supplies, but she didn’t realize it before we brought it up. We did post-loan interviews and then a little while later they got the next loan.

Friday morning

We would visit every women’s group once a week to see how they were doing, to collect their loan repayments and sometimes give them business training. The Friday morning group is called peace. We started out by giving this group a new loan and we talked about our concerns and things like that. We did a business visit with one of the women, she has cows for milk, beans and chickpeas. She is doing quite well, but she is supporting an entire family of children and grandchildren so most of the money goes to them. Sometimes they came late to the meetings and didn’t have any of what we had told them to prepare ready. Maybe it was lost in translation or maybe they simply forgot. Then we went to another business visit, a kerosene business, she goes to Kenya and buys it and then sells it here. It seemed she made quite a profit on it.

Wednesday

We would visit every women’s group once a week to see how they were doing, to collect their loan repayments and sometimes give them business training. The Wednesday group lived on the other side of town than the Tuesday groups. Only three out of around ten women showed up the first time we visited this group. They were all claiming sickness, but this happened quite often. It didn’t seem like they were all that serious about the loans since they didn’t even show up to the weekly meetings. Five women had their last payment for their second loan, only one of them showed up. We did a post-loan interview with her, it was nice to hear how it went for this woman with her loan and what she used it for. It seemed like it had been really helpful to her, all the training also seemed to have helped her. The next time we did the last four interviews; one of them bought a cow, a male one, that hasn’t brought her any income yet, so she used her other businesses to pay for the loan, but when she sells it she will get 900,000 tsh. Another sells beans in Nairobi, yet another has been sick so she didn’t really do all that much.

The last five women finished their loans some time later, only one showed up, her business was that she makes a nutritious porridge and she was making a lot of money on it, but she needs to expand her business as she was able to make 100 kg a month as it is, but there is a demand for 200 kg. later we did the last post-loan interviews and it is incredible how big the gap is between some of the women, one had 300 chickens that produce a lot of eggs for her to sell, so she turns over a big income, another who sells solar power and something else and also gets a big income, but then there was one who owns a shop, that has very little income. They have all gotten the same amount of loans, but they use it so differently.

Tuesday afternoon

We would visit every women’s group once a week to see how they were doing, to collect their loan repayments and sometimes give them business training. The Tuesday morning group lived far away from the center of town. The leader of the group had a really big garden with tons of different vegetables and things of that sort. She seemed to be really successful. Sometimes we would meet this group in a church made of concrete and we talked and discussed what kind of problems they had. We visited one of the women’s business, she has many things; animals, vegetables, fruits, chickens and a shop. In her shop she paid 40,000 for an employee a month, whom she also supplied with food worth 45,000 a month, her rent was 30,000 and for electricity she paid 5,000 a month. She told is that the income in her shop was 120,000 a month. So it didn’t really seem all that profitable.

Tuesday morning

We would visit every women’s group once a week to see how they were doing, to collect their loan repayments and sometimes give them business training. The Tuesday morning group was called love one another. We did savings training with this group and visited one of the women’s business. She was doing really well, much better than most of the other women and she doesn’t really need the third loan, but is our goal for the individual women to be financially independent or the entire group? This women can help the others if they need it. She was selling food for animals and wanted to start selling concrete. Another woman owned a fruit and vegetable stand, she is doing fine.  We also did forecasting and planning training and the chairwoman of the group, came up with the idea that they should all come with a business plan that we can look over and see what would be most profitable.

Monday

We would visit every women’s group once a week to see how they were doing, to collect their loan repayments and sometimes give them business training. The Monday group lived close to a river. They had been having a problem with one of the women in the group. She didn’t show up to the meetings we had with them, so she hadn’t been given any training. But just when we discussed her, she showed up, so the group decided to support her, but with the same loan amount as last time, they later changed their minds and said she could get a bigger loan. They wanted to finish their loan early, so that they could begin with a new one. Before they received a new loan we went over their loan application with them and listened to what they wanted to do with the money. There are only four women left in the group as the previous members were not good at paying on time and coming to the meetings.

                      One of the women had asked us to find a price for a scale, but then she changed her mind and said she wanted to buy sardines instead, this means that it sometimes were a bit difficult to be sure they invested in what they put in their applications. We visited the same woman’s shop and she had a lot of space left for stock, at one point a woman came in asking for soap, there wasn’t anything left, but a phone call and ten minutes later a guy comes by with a box full of soap. Most of the women seem to benefit a great deal from the loans.

Microfinance

Last year I volunteered on a microfinance project in Tanzania. I wanted to try and see for myself how it worked. There was six women’s groups. We would visit every women’s group once a week to see how they were doing, to collect their loan repayments and sometimes give them business training. Business training could be savings training, book keeping training, forecasting and planning training and so forth. Each women had a loan of 100,000, 200,000 or 300,000 Tanzanian shillings, they had a certain amount of weeks to pay the loan off without interest. For example with the 200,000 tsh loan they paid 12,500 tsh per week for 16 weeks. As this was a project build up by one supervisor and many interchanging volunteers it could sometimes be difficult to keep the momentum moving forward. But all of the women in the groups really seemed to have changed their lives for the better. Over the next month you will hear about the six different groups.