Our trip to Kitasengwa

On Friday we went to Kitasengwa.  Kitasengwa is about a 60 minute southwest of Iringa, just off the main highway.  We first visited here in 2013 when they wanted to learn about how to start a SACCOS.  Since then they have started their SACCOS and joined the Iringa Hope network.  On Friday we were interested in seeing how they have done since giving their first loans to members.

We first went to the pastor’s house and talked with the officers of the SACCOS.  When we were here last year we interviewed some people who were hoping to get loans.  At that time, this SACCOS was just getting ready to give their first loans.  

One of the people we interviewed then was the pastor’s wife, Dora Kinyunyu.  Dora is 48.  She and the pastor have 4 children.  Last year she was hoping to borrow 250,000 TZS ($150) to go into the egg business.  She thought that 100,000 TZS ($60) would be necessary to purchase 100 young chicks and to start her business.  When we talked to her this year she told us that she had borrowed 450,000 TZS ($280) for her 100 chicks.  We suspect that when she factored in all of the necessary expenditures for her business, she realized that she would need a larger loan.  She set up a chicken coop with feeding stations and “laying buckets” and bought her 100 chicks.  Some of the chicks turned out to be roosters and she has sold some of them for the stew pot.  She now gets an average of 40 eggs a day and she is earning 210,000 TZS ($130) a month and will do so for 12-16 months.  This means that she will net a profit of about $1,500 from this loan!  She is paying school fees for their two children who are in secondary school as well as for the two who are in primary school.  Although the government provides primary schools here, they are not without cost.  Each student needs to purchase a school uniform, books, and supplies; which are mandatory for school attendance.

We drove to the community center to have our meeting.  This SACCOS now has 40 members.  Last year it had 36 members with 26 people in the process of joining.  However, after we started this SACCOS a “lending group” formed in the village.  This sort of group is a loosely affiliated collection of members who contribute some funds at periodic intervals and make small loans out of the funds they gather. 

Generally the problem with groups like this is that there is not enough capital to make a difference.  They are mainly useful so that people have a place to keep their money. Studies have shown however that they are not effective at raising the income of people.  Potential SACCOS members had joined the group because it promised to lend money for any purpose and they promised to make loans as soon as a member joined.  As you know, if you've been following our blog, we only lend money to make money and we require members to belong for 6 months and save some money before being allowed to take out a loan.  The temptations of quick and easy money steered some people away from joining the SACCOS.

So, how has this worked out for them?  It seems that the group has had trouble collecting on loans and has very little capital to lend.  As a result people are leaving the group and are once again asking to join the SACCOS.  We asked the chairman if this was a good thing for the SACCOS.  He told us that they were not sure that they would let the group members in.  He is concerned that they may bring bad habits with them.  This is an area where we don’t offer suggestions.  It is up the membership committee of the SACCOS to decide.

This SACCOS has about 7,000,000 TZS in its bank account.  In addition it was able to borrow 8,300,000 TZS from Iringa Hope last year.  They used these funds to make loans to members, netting a profit of 500,000 TZS (about $330) for the year.  So far, every SACCOS we have started has made a profit in its first year. 

We talked about how Iringa Hope works, how to get loans, etc.  There were many good questions for us and we enjoyed the session.  The farmers in this area have been lucky.  They have had a sales agent who has been able to get them fertilizer on credit and at good terms.  It seems however that this is coming to an end.  This year they will not get credit and they will have the same problem buying fertilizer as most of our villages.  We discussed with them forming a “buying club” and how it might work for them.  Longer term we hope to form an AMCOS (Farmer’s Coop) here as well.

As the meeting ended Sandy went to interview one of the members.  She sat down with William Nogta, 64, married, and with 6 children.  He and his wife are currently supporting his son who is at the University in Dar Es Salaam, another son in an industrial arts program, and his youngest child who is now in Form 3.  He told us that last year he borrowed 1,000,000 ($625) to farm vegetables.  His main crop is Irish potatoes, peppers, and egg plants.  He has hired two full time workers on his 8 acres.  He is paying them $450 for the year, which is a very good wage in a village where the average income is $300/year.  He expects to earn a profit of over 1,700,000 TZS when he sells his crop (about $1,050).  He told us that this will pay his children’s school fees and leave him enough to do some improvements on his house.

We said good bye and headed back to Iringa, where we met with the General Secretary for the Diocese.  As our program has grown our members have come to represent a larger and larger portion of the income of the Diocese.  This year alone our members will donate over $50,000 to their churches.  The Diocese is aware of this and wants to know how they can help us expand our work further.

We stopped at the pastor's house.

Dora Kinyunyu.  Dora is 48.  She and the pastor have 4 children.  Last year she was hoping to borrow 250,000 TZS ($150) to go into the egg business.

When we arrived at the community center the members were waiting for us.

These twins were adorable as they kept running around.  The little girl was dragging a stick around for awhile.  We were wondering why she was doing this, but when her mother took the stick away her brother started hitting her!

The SACCOS surprised us by giving us shirts.  Mama thought that I looked a lot like the poster - I did not agree.

Tom and Peter got shirts while Sandy got a skirt.

Sandy sat down with William Nogta, 64, married, and with 6 children.  He and his wife are currently supporting his son who is at the University in Dar Es Salaam, another son in an industrial arts program, and his youngest child who is now in Form 3.