When we visited Mbale last week, we saw our first Micro Finance team in action. The AFC Micro Finance teams provide small loans to guardians of vulnerable children to enable them to gain wealth to provide for their children. This program empowers women who otherwise have no assets and inherit children without a means to support them. Men are also eligible for the program. In addition to receiving a loan, the group benefits by forming a support group for each other.
I joined the Kampala Micro Finance team today as they distributed loans to a new group of guardians. There were half a dozen women in the group and the fewest number of children in a house was 7. The loans from the Micro Finance program will help (i) a local midwife with 10 dependents to expand her midwife clinic and provide signage that is more prominent (see picture), (ii) a grocer expand her produce stand to support her two biological children and the 5 children she inherited from her late brother (see picture), (iii) a widow with 17 children expand her bin inventory for retail sales, (iv) a nursery teacher with 10 dependents to produce envelopes, (v) a tailor with 8 children to expand her inventory of material and (vi) purchase goats for a woman with 15 dependents whose goats died in a draught.
Can you imagine doubling the number of mouths you must feed overnight when your brother, sister, daughter or son dies of AIDS and leaves you their dependents? Add to that the idea of being a woman with no assets of your own.
Some of the recipients of the Micro Finance program have had amazing success. One man was able to use his loan to buy a bicycle to use as a taxi. He saved enough from his earnings to buy a motorcycle to provide faster taxi service and can now more comfortably feed his expanded family. A woman used her loan to buy material and set up shop as a tailor. She was able to feed and shelter her dependents and went on to train young apprentices. There are as many stories as their are "graduates" of the Micro Finance program.
2 comments:
Micro-finance is an incredibly powerful concept. In 2005 the Nobel Peace Prize when to Muhammad Yunus of Bangladesh, the economist and banker who pretty much invented this concept in the 1970s.
One statistic I saw was that as of Dec. 31, 2004, some 3,200 microcredit institutions reported reaching more than 92 million clients, according to the report. Almost 73% of them were living in dire poverty at the time of their first loan.
Guess what, poor people with no collateral can be good risks for a business loan. It's kind of a twist to the old saying about teaching a man to fish instead of giving him a fish - just hand him the damn fishing pole and get out of the way!
Well said, Jack! Apparently the micro-finanace concept has done well in China as well. Katie, out of curiosity, is Uganda law full of regulations? I ask because I wonder if the small businesses will get to a point where the Ugandan government will take over the businesses and or pillage their long-term success....Possibly a "downer" question, but it would be interesting to know. On a positive note, thank God AFC is currently feeding and empowering many people. Lex
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