Microfinance Project

Hello Everyone,



Sorry it has been a few weeks since I have written, but I have just been working almost everyday in an effort to make sure that everything I wanted to accomplish before I leave gets finished. I have decided to update you one project at a time in each of the next few blogs and also fill you in on other things I've been up to.

The YOFAFO microfinance project works with Bulumagi village, which is about a 30 minute drive from Lugazi. I think in a past blog I've mentioned it before, but this is an amazing project that is really transforming this village economically. It caters to approximately 75 villagers, about 90 percent of whom are women. Many of these people are HIV/AIDS positive and/or may be widows or single mothers. All of them come from impoverished backgrounds and some of the women even hide the fact that they participate from their husbands. Why would they do this? The reasons may vary, but for some it's because men consider women with money to be dangerous (aka the women become empowered and may become brave enough to leave an unhealthy relationship).

The program offers low-interest micro-loans to villagers, as well as a savings program. First, most of these people do not have collateral to borrow money from the bank because they do not own land or have permanent houses. Therefore, this project offers a form of social collateral to villagers by asking them to come in groups of five (they are told to pick trusted family members and friends) and, together, the group takes out a loan for 500,000 Ugandan Shillings (100,000 each), which equates to roughly $225 ($45 each). They have 20 weeks to pay off the loan (a number decided upon by the members themselves), but if they default it is up to the other four members to pay off that persons debt. Because of this system, members use encouragement, community involvement, and a bit of pressure to make sure that their group members succeed. With each successful pay-off of a loan, the group can apply for another loan, with each member increasing by up to 100,000 each time. As another safety measure, before any person is allowed to take out a loan, they must have saved at least 25 percent of the loan amount requested within the program to prove that if they default, the program will be repaid at least 25 percent. The program has been successfully running now for two and half years and some groups are up to their sixth loan 600,000 UGX each.

And now for the first way that Empower Walk World money has been used....

The microfinance program has two local Ugandan volunteers, Alice and Moses, who record the deposits, withdrawls, and repayments each week on paper for all of the 75 members. At the end of the day, Doreen, my director's wife who is in charge of the microfinance project takes the data home and stores it in folders. She also is supposed to enter the data into a Microsoft Excel spreadsheet, but the YOFAFO computer is rather old and unreliable and it actually does not allow for the external harddrive to be used to store the data. Furthermore, because Doreen had been sick for three months and because she is dependent on volunteers who bring reliable laptops to do the updates, the data was behind by six months. Therefore, one way that the money has been used is by purchasing a small notebook laptop with an extremely long battery life (about seven hours). Now, Doreen can charge the computer at home and take it to the village, that does not have power, to be used for data entry. We are also training the two local volunteers to use Excel. One of the two villagers, Moses, had never even typed on a computer before! So, not only will the microfinance project now have a safe and effecient way to store data, but two villagers are learning a transferable skill.

That's all for now. In the next few days I will update about papermaking activities.

Take care,
Courtney

"He that climbs a ladder must begin at the first rung." - Sir Walter Scott