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Posts Tagged ‘microcredit’

My Work Plan : A Summary

June 23, 2009
Silverman 1First of all, let me just say that I cannot believe that I have already been in Kakamega for over a month. Talk about how time flies! Even scarier, however, is the thought that I only have one month left to accomplish any of my goals at work. As I mentioned in my last post, I spent a lot of time during weeks 2 and 3 formulating my work plan. How could I have a sustainable impact on KES and the Kakamega community? This was a really difficult question to answer, and after hours of deliberation I decided not to focus on just one idea, but instead to work on a series of small projects that cold improve the cooperative’s effectiveness in Kakamega.

My first objective is to facilitate the involvement of current members and the recruitment of new members. KES has over 400 members, but suffers from a very high monthly default rate due to their “goodwill” debt collection procedures in which members are expected to pay monthly without any staff or loan officers to guide them. This high rate of default is detrimental to the cooperative’s growth and I believe it needs to be addressed as soon as possible if the SACCO is to reach its goal of being fully operational by 2012. My first idea is to create a quarterly newsletter, targeted specifically at members who have been dormant for more than two months. This newsletter (only 4 pages long) is almost complete and will be ready for KES’ Annual General Meeting scheduled to occur on June 27th. In addition, I am hoping to implement new incentive programs to encourage continuous payment of loans and member recruitment. Specifically, a member who makes loan payments every month for a year (a rarity in the current records) will receive the last month’s interest free, a member who pays his shares every month for a year will get the opportunity to take out a loan at a lower interest rate (.8% monthly instead of 1%), and members who recruit new members will receive a certain amount of money for every member they bring in. Finally, I have agreed to help the SACCO design a sign to help advertise their location on the main road of the town. These are all very simple ideas, but I hope that in combination they will give KES a boost in member recruitment and involvement.

My second objective is to update their accounting systems. Currently, the bookkeeper uses Microsoft Excel for all accounts, but none of her spreadsheets are dynamic. In other words, she adds everything up with a calculator (and occasionally makes mistakes along the way) instead of using formulas (as simple as auto sum) that could calculate everything automatically. I have already worked out a good system, but my goal is not to just teach the bookkeeper to use the system that I have created. Instead, I am trying to teacher her how to create general dynamic spreadsheets – that way after I am gone she will be able to design efficient systems of data management using excel as the need arises.

Thirdly, I am working with KES’ microfinance sector to jumpstart a new group of boda boda drivers. This is probably the part of my project that I am most excited about. A boda boda is essentially a bicycle taxi, who shuttles people around all day for about 15 cents per trip on average. Most of the drivers (there are hundreds of them) have no other way of making a living – many have even finished high school or university but just don’t have any other career options. Our goal is to get a group of 15 boda bodas to start saving monthly for four months, after which they will have the opportunity to take out a small business loan. After this loan is paid back, they will eventually take out a bigger loan and will thus be given the opportunity to work their way up out of poverty.

At first I was unsure that we would be able to get a group of bodas interested in this kind of project – as a matter of fact KES tried to implement this kind of project with an FSD intern last year and the project was ultimately unsuccessful – but last week I was happy to find that my fears were unfounded. I met with the bodas for the first time on Friday, and it was probably the most powerful experience I have had since coming to Kenya. We met for about an hour in a small hot room, with someone translating what I was saying sentence by sentence into Kiswahili and then translating their questions back into English. After their skepticism had been assuaged (many Kenyan workers have been victims of fraudulent pyramid schemes), I could sense the excitement and nervousness in their tone of voice. Nobody had ever before put their faith in the hands of these boda drivers, and I believe they saw in this newfound trust an opportunity to change their lives. Contrary to my expectations, they were very proactive about organizing their next meeting time and even asked if they could bring new members. At the next meeting (July 3rd) we will go over/amend the group constitution, and elect officers (chairman, treasurer, secretary).

My final project involves evaluating the KES Strategic Management Plan that was created in 2007. In the SMP, KES has set specific goals for each year from 2008 to 2012 (ie. number of members, amount of capital etc.) and I plan to go through their records and make a report detailing their progress.

In the end, I hope that some if not all of my projects will be sustainable, and will help KES to reach the goals outlined in their SMP.

Rural Discoveries, Religious Experiences

August 3, 2009
Silverman 2Around the 4th or 5th weekend I was in Kenya, I ventured into an extremely rural area on the outskirts of Kakamega. Actually the way that this trip came about was kind of funny – my host mom mentioned that her nephew was coming over and that I would go for a walk with him (people in Kenya don’t really ask questions in English – they just give polite commands). Apparently “go for a walk” meant get into a matatu for half an hour and drive out to his house where I would be staying for the night. You can imagine that came as somewhat of a shock but after the initial panic I just rolled with it. As we drove, paved roads turned into dirt roads, and eventually even the dirt roads disappeared until we were driving on just grass.

My host cousin’s name was Simon and he was in his mid 20’s. He took me to his house where I met his family and stayed with him for the night. The house was on a compound, which is the most common familial structure in rural parts of Kenya. The compounds generally contain 4 or 5 houses with members of both the immediate and extended family living there. For example: one house might be for the grandfather and grandmother, and the others for each of their sons and their respective families. In the morning Simon led me through the thick fields surrounding his house. While almost all of the crops I had seen in Kenya previously consisted of maize (corn), this field was filled with sugar cane. Sugar cane plants are huge, probably eight to ten feet tall, and once you are in the middle of a big field there is really no way to tell which way is out (unless you know where you are going). Simon ripped a smaller piece of cane out of the ground, and bit off the ends revealing the woody, sugary innards of the plant that cane sugar is made out of and that people commonly chew on. I took a piece to chew and it was delicious, although it was so sweet that I actually got a little bit light headed. I tried to bite the wood off a piece of sugar cane myself to get to the sugar on the inside and I swear I almost broke my jaw – to make me feel better Simon claimed that Kenyans have very strong teeth. My favorite conversation of that weekend (and possibly of the trip) went as follows:

Simon: I like to travel very much.
Me: Oh really? Where have you been?
Simon: Throughout Kenya, Uganda, and Tanzania.
Me: Cool! If you could go anywhere in the world where would you go?
Simon: America!
Me: Which state? (expecting New York or California – the most common answers)
Simon: Texas.
Me: Really? Why Texas? (surprised)
Simon: Chuck Norris.

No further explanation necessary.

The next weekend, I went to a church in Amalemba with my family. This was also one of the most interesting experiences of the trip. As you may know, I normally wouldn’t be the first in line to attend a church service, but it seemed like a great cultural experience and I figured I had to go at least once while I was there. I was surprised when I first arrived in Kakamega to discover how Christian most people there are. When you walk down the street on a Sunday morning, you see can see and hear a church service at almost every corner. One Sunday I even tried to go running at the track, but decided not to because there was a service in the stadium!

From my experiences, however, I found that the church service in Kenya is very different from the average American church service. While I imagine most services in America being more subdued, Kenyan church services are adorned with extremely loud music, and intense preaching and singing (and dancing of course). No matter how dilapidated the structure of a church may have been, I don’t think I ever saw one that was lacking a sound system equipped for a movie theater.

The church service I attended with my host family was somewhat small. While the structure probably could have fit about 200 people, I would estimate that there were about 30 people in attendance. At the front was an altar, and to the side a keyboard player who was essentially the church DJ, playing quiet, eerie music during solemn speeches, and slowly transitioning to uplifting music (fully equipped with keyboard driven techno beats) when appropriate. Upon entering the church I realized that there seemed to be some excitement among the congregants. I wasn’t sure why, but I thought maybe there was some kind of special event going on that day. It turns out that there was – me.

Before I walked in, three very old ladies approached me – they could not speak English or even Swahili, only the mother tongue of the Luhya tribe, Kiluhya. After some difficulty in their attempts to communicate with me, someone translated that they were very excited to have me at their church and wished they could express that to me in my language. That was a really moving moment.

After being welcomed into the church, I was asked to introduce myself to the congregation at the front of the room with a microphone. This was definitely a little bit nerve racking (and surprising), but I was happy to give it a shot. I used whatever Swahili I knew to say my name, where I was from, and why I was in Kakamega. The crowd seemed very grateful and applauded for me when I was done speaking.

Most of the service was in Swahili so it was difficult to understand, although I am aware that I was in some way part of the sermon because I kept hearing the word “mzungu” interspersed throughout the pastor’s speech. The best part of the service for me, however, was definitely the upbeat music and dancing. They also had a 4-part choir that sang gospel songs that were really cool. Also unlike in America, instead of passing around a collection plate, there is a period in the service when the collection plate is at the front of the room and each row approaches the plate, while singing a specific song, and makes a donation. I thought this was a really interesting ritual.

At the end of the service, everyone went outside and we stood in a large circle holding hands. Prayers were said for everyone in the community, announcements were made, and then we dispersed. Many different groups gathered – men’s groups, youth groups, women’s group etc. and began to talk about whatever other activities they had planned for the coming week. This made me realize that the church, more than any other institution, really was the center of the community for my host family and the other congregants. Besides the religious aspect, it gave them an outlet to talk about their community, their experiences and their individual lives.

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Boniface Kawiiso (far right) meeting with Promic clients to discuss loan repayments.When one considers the challenges associated with managing a micro-credit program in a widely dispersed rural community, it is apparent that resources are often strained. Boniface Kawiiso, a long-time employee of the Jinja Diocesan Development Coordinating Organization (JIDDECO), was serving the role of the deputy director of the Promic Program, the administrative assistant, the loan officer, credit officer, the trainer, and the primary consultant for an outside Savings and Credit Cooperative. The JIDDECO Promic Program serves groups of women in Uganda with microcredit loans. When Boniface was the sole employee for Promic, it was unrealistic to facilitate a micro-credit lending program across 19 diverse communities. As a result, many savings groups lacked proper contact information, the assistance that they needed to successfully manage and repay their loans, and the guidance to properly allocate group loans.

FSD Intern Will Perreault worked with JIDDECO during his internship in Jinja, Uganda. His first experience in Uganda was to situate himself in new surroundings: “As the rooster crows (well, cocks… the word rooster makes everyone laugh, given that the combination of vowels and consonants is not all that typical within Lusoga), I open my eyes to a new day in Uganda. I look out my window through a field towards Lake Victoria, ultimately spilling into the Source of the Nile. Other than a nearby factory, I can also view Tanzania and Rwanda. Not bad.”

Will Perreault pictured in middle with Promic Women\'s Savings group.His second experience was working in a new community with an NGO, where he recalls learning about microcredit on the ground: “Graciously, I was welcomed into the 19 Promic women’s groups’ hollowed out brick churches, open air community centers, and dirt-floored homes. I had asked how Promic could better serve their needs. Unfortunately, many of the groups seemed to be voicing the same frustrations with Promic as well as their own businesses. Continually, clients failed to repay their loans, were given additional loans (by predatory lenders and well-intentioned groups alike) and subsequently grow more and more in debt. To avoid giving those who are unable to repay loans future loans is not simply a matter of tough love. Like so many of poverty’s symptoms, the majority of the reasons why people are unable to repay their loans are so preventable (if not curable). It was very discouraging to hear the stories of increasing debt, failed businesses, and the minimal contact they had had with my host organization and their peers – whether in the form of monitoring, assistance or encouragement.”

After gaining familiarity with both his surroundings and his host organization, Will’s work with JIDDECO led him to help develop a database to track the microcredit loans of the Promic Micro-Credit Program. Together, Will and JIDDECO created and implemented a Project Monitoring System and Evaluation Database. With the database, JIDDECO is able to better equip their clients to repay their loans, ensure that program resources are utilized efficiently, and measure the performance of their loan allocation program to truly target marginalized populations in immense need. Through Will’s creation of client loan portfolios, a centralized collection database and a regular monitoring and assistance program, JIDDECO reaped a higher rate of return on their loans.

Improved Feed/Seed being allocated to farmers in Bufuta Village must be paired not only with the tangible output of improved feed, but resources in capacity building to train clients in the creation of their own feed.With the generous financial support provided by over 50 friends and supporters, Will was able to train staff members in utilizing the database system, gather data on the allocation of over 500 previous loans in 19 different communities, and meet with community members to hear about their challenges and successes. Will was able to measurably improve incomes for women in rural communities through these partnerships, as well as help equip them to build their micro-businesses and self-confidence. In the words of Boniface, “[By] facilitating the establishment of a database, JIDDECO now knows all its clients’ characteristics by name, type of enterprise, the loans applied for and amount, repayment schedules, the interest charged and their saving culture. Through the loan portfolio ledger, JIDDECO has strengthened its group lending scheme using group consent forms, individual loan tracking/monitoring, and is simplified for better loan management and client’s business growth.” Thanks to Will, the microcredit effort in Uganda can continue to grow.

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