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UGA02a - Uganda loan boost programme: Partnership Reports



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Report Date: July 7, 2014

Report from BHW Uganda Partnership Facilitators Following Visit in June

 

Recent Events

Loan Programme

Since the last report the larger loan programme has started and is running very successfully. All money received has been allocated to recipients and the feedback from the five beneficiaries we interviewed was extremely positive.  

One interesting feature is that the local school at Buhoya has also received a 3.5m UGS (US$1,400) loan from the programme as well. When we talked the school had repaid 700,000 of it. The money was used to purchase some additional land which had become available. The loan was being repaid from school fees but apparently the parents were all aware of it and there was general agreement. We understand that the additional land is to assist in expansion of the school into the future.

The week we were there another beneficiary was to receive a boda boda motorbike. James has an arrangement with a seller of motorbikes and the loan programme actually buys them and the beneficiaries then repay into the programme. Before they receive a loan they have to have saved approximately 1/3 of the total amount. For the boda boda riders this means that they save about 1.3m UGS. Most of those who had a loan have saved this amount or similar.

There are 12 people in the large loan programme and there do not appear to have been major repayment problems. The savings are offset against the loan or alternatively they have the option of retaining it as savings and repaying the loan balance over time.

Repayments are flexible and to some degree meet the abilities of the beneficiaries but we were satisfied with what we saw of the level of repayment. We were not there when the loans were being paid but did see one beneficiary make a payment of approx. 40,000 UGS (US$15) to James and him record it in the loan book.

Many of the clients who receive the larger loans have been in the smaller loan programme, but not all. If people have proven a reliable savings history then they have been allowed to join the good administratorlarger programme. In several cases this savings history was developed over a year or more and provided good evidence of faithfulness. 

Administrator

Christopher Odeya, who has previously been referred to, has taken over responsibility for administering the larger loan programme. We are very impressed with him. He is a man of integrity and has certainly grasped the responsibilities well. He also has a loan himself and is a boda boda rider. He took a key role in the Foundations for Farming training.

 

Personal Stories

Mary 

caring for 5 kidsMary has five children aged 5 to 13 years. She attends the Church of God World Vision. For 2 1/2 years she has been buying cereals (like maize) when the price to buy is low and then sells them when the price is high. She also has 2 acres where she grows maize, beans and cassava.

Mary found herself in a difficult situation however as her husband would use her money for alcohol. At one stage her husband got a second wife and she went back to her family home however she now lives with her husband again and his second wife who now has a baby. Her husband does not financially support his family.

Mary found out about the loan programme from others in the community and approached Gorrett for assistance. She decided that to protect the profit fom her business she would begin to save it with the micro-finance women's empowerment group. Others in the community became jealous of her and told her husband that she was in the loan programme and he beat her for this.

After saving UGS35O,000 (US$140) mutual trust had grown between Gorrett and Mary and she was able to take out a loan from the large loan programme of 2 million UGS (US$800). Because her business is doing so well she had paid off the loan in 4 months as after meeting living and business costs she brought back all the profit into the loan programme.

Mary is able to provide for all of her family's needs including education costs. She has also been able to improve her business including buying a bicycle to help with transport.

Mary hopes to educate her children. They live in a grass hut and she wants to be able to improve their home with iron sheets for the roof.

Since taking the loan Mary is pleased with her progress and she wants to use her savings and access another loan in July. She is aware of the risks and takes steps to avoid robbery and as long as her husband does not see the money she earns she and the money are safe.

She has built strength and assured us that her husband would not beat her as he now knows he is dependent on her.  He is aware of her strength.

Gorrett is aware of the problems of domestic violence within the community and works with individuals and groups to educate and reduce this in the community.

Bamba

ten childrenBamba has two wives and 10 children and was working as a boda boda driver to help support his family. Because he was driving a bike that he did not own it was very difficult to sustain his family, meet their needs and pay school fees.

He lives in a different subcounty and was in a savings programme there however heard about this micro-loan programme and requested to join. He transferred his savings of UGS900,000 (US$350) and continued to save until he had UGS1,100,000 (US$430).

He used his savings plus a large micro-loan of UGS3,400,000 (US$1,300) to buy a bike to use for his own business. Now he is able to fully meet his family's needs and pay school fees. He has also now developed a piggery and has eight pigs, two of which are pregnant. In addition, he is also developing a brick making business and pays others to make the bricks.

Bamba said he is now earning more and experiences less pressure as before the owner of the bike made very big demands yet he received little money. Not only does he have more money and time to diversify and establish other ways of income generation but he has been able to increase his savings to make loan repayments. Over the past 6 months he has been able to repay 1.3 million off the loan. 

Robert

Business growingSince our last visit in 2013 (see Report from October 2013) Robert has been able to save 1 million shillings. He decided to sell the bike he had for 2.5 million and together with another loan of 1.2 million he bought a new one.

He continues to save and is paying off the loan. His total loan is now 2 million UGS (US$770).

His boda boda (motorcycle taxi service) is doing well. He has also been able to expand his farming. He now has a plot 100 x 50, is producing more vegetables and has developed a piggery.

He now has two sons as his wife had another baby. He is very pleased that he is able to work to support his family. He feels confident he will completely repay the loan and understands the benefits of diversifying his income.

 

Current Issues and Challenges

There have been three problems/issues. One was a boda boda rider who was not skilled and had two accidents in quick succession. The loan programme ended up paying medical costs and expenses for three people who were injured. They have taken the motorbike off that man.

The second problem, which did not seem too significant to us, is that they purchased a motorbike at a time when the prices had spiked to 3.8m UGS (US$1,520) temporarily because of high demand. When the prices dropped a few weeks later they were only able to establish the loan at 3.5m UGS.

The other small problem is that some beneficiaries who had moved up to the larger loan programme had not understood that their ‘savings’ in the smaller loan programme had been applied to loan reduction in that programme and were not part of the larger programme. This issue has been resolved and the loanees are now understanding this. 

 

Comments

James and Gorret want the large loan programme to grow slowly and appropriately. They do not want further money from BHW into the larger loan programme at this time and would prefer the capital to cycle through the programme.

Gorret reports that prior to the large loan programme she was under considerable pressure from people wanting larger loans to build their businesses. She said that now that there is this option this pressure has reduced and it is working well having Christopher managing the programme.

It will be good to see at our next visit if the larger loan programme is creating more employment within the local community.