Mkimbize – On their way to give relief to Mtera

Today we went to Mkimbizi and then visited the local fertilizer company’s manager.  Mkimbizi is located right here in town.  We generally try to visit on a Saturday since most of the members are at work on the weekdays.  Even on Saturdays it is hard to have a meeting since many of the members go out of town to work on their farms. 

When we got to Mkimibzi we saw a group of people packing clothing into large bags.  Some members of the Mkimbizi parish were packing up clothing and food to take to Mtera.  Things at Mtera are never good, but this year is especially bad.  The crops have largely failed and many people are having a very hard time.  Some of the members of this SACCOS are among those who will be bringing aid to the area. 

Attendance at the meeting was low, as it often is on a Saturday.  Additionally, the group going to Mtera is eager to get started, as it will be a long bus ride.  We decided that it would be best to shorten the meeting.  Tom gave an abbreviated version of his usual talk about how Iringa Hope works. Being in town, most of the members have visited our offices and are already aware of much of the information.  We gave them their calendars and then  Peter gave a brief class. 

This SACCOS now has 82 members and they gave 87 loans last year (many are for 3 months so they can take 2 or 3 loans a year).  Their average loan was for 450,000 TZS (about $280) – with 100% of all loans being paid on time and in full.  Overall they made a profit of almost 4,000,000 TZs last year (about $2500).

Mkimbizi was one of the winners of the business plan competition last year.  They had planned to go into the concrete brick business.  When we visited them last year they had made a lot of bricks but they were having trouble selling them.

About the time they started making these bricks a lot of other folks decided to do the same thing.  As a result the market got flooded and what started out as a good idea turned into a marketing problem.  After trying to sell bricks at the going rate for a few months they decided to start lowering the price just to sell off their inventory.  As they lowered their price so did everyone else.  Finally they got to where they were selling very close to cost.  They did sell all of the bricks, but after accounting for all of their costs they only earned 23,800 TZS from 5,000,000 TZS in sales – not enough to bother with.  They have of course recovered their capital so they are now thinking about what else they might do.  One interesting side effect was that when they lowered the price so they could sell off their bricks they lowered the market price of bricks.  Even several months later the price remains low and shows no sign of increasing.

After leaving this meeting we went to meet with the local manager of Yara, the fertilizer company.  Yara  is currently the largest fertilizer company in this area.  They also make the best product.  We are interested in doing a deal with them so that our villages can buy their products in bulk for their members.  We also want the AMCOS (Farmer’s Coops) we are forming to get a good price from the company.

We met with the Yara manager at a restaurant in town.  We described what we are working on and what we want from Yara (good prices, credit for our SACCOS, free delivery, etc.).  He thinks that he can do some of what we ask but he will have to go to the headquarters to see about other things.  If we go ahead with Yara we will sell over 12,000 bags of fertilizer this year.  This will make us the 3^rd or 4^th largest customer in this area.  It will be interesting to see what Yara will offer.

When we got ot Mkimbizi the members were busy filling bags with clothes and food items.

The chairwoman explained that they were hurrying to get ready to take a bus to deliver aid to the village of Mtera.  Mtera is normally very poor but this year is especially bad since they had very poor crops.

Sandy gave the leaders calendars and pointed some things out.  Our calendars are very popular here.

Last year they went into the cement brick business.  Unfortunately several other people did the same thing.  In order to sell all of their bricks they dropped the price to just a little bit above their costs.  They sold all of their bricks, but the price of these bricks remains very low.

We headed to a restaurant to meet with the Yara fertilizer manager.

We had a good meeting with him.  We will be his 3rd largest customer in this region if we decide to go ahead and buy from him.