Arusha Project

Giving out the first loans
July 1, 2007, 7:49 am
Filed under: Abroad Program, Microfinance, Uncategorized

Thursday and Friday marked the training and dispensation of our loans to 50 individuals and 4 NGOs that Cheryl (our microfinance specialist) carefully selected based on feasibility and accuracy of business proposals from individuals and organizations affected or infected with HIV/AIDS. In a conference hall in the center of town, these women (and a few men) met for two days in a row to take a training course on business and entrepreneurship. The process was not without a few bumps along the way.

Earlier this week we found out that an organization we work with, but that we had not decided to give loans to, had taken out radio time to advertise out loan program and the training program we hosted this week, so on Thursday morning, women not selected for loans or invited showed up, media representatives came, and some of the women the program was targeting did not show up. Friday seemed a little more organized and by mid-afternoon we were ready to start the process of actually giving out the cash loans. Out volunteers stepped in to survey the living situations of the women. Questions were used to determine food consumption patterns, housing types, expenditures and monthly income to measure the women’s standard of living, which will then be compared to the same statistics taken at the end of the program to assess how effective the program was at changing the participants’ quality of life. Cheryl formulated our microloan program in the style of the Grameen bank where women choose their groups of five individuals and jointly assume responsibility for paying back the loan with interest in full. If one woman fails to perform the others are held accountable for paying her portion. This system encourages women to pay back their balances through peer pressure and responsibility to their trusted friends. In groups of five, women approached out loan table, each group accompanied by a trusted head of an Arusha Project partner organization, which the women are members of. We wanted the organization heads to be present to testify that these women are who they claim to be. Still, we had doubts about many of the women as their ID cards did not match the names on the list and a few did now have any form of identification at all. Often women presented medical cards that they acquired when they were tested for HIV, and apparently no one gives their real name when they go to get tested as such a huge stigma is attached to the disease. It’s not a surprising situation but it made our job much harder. Often Cheryl would resort to asking the women what their proposals were and if they could sign their names correctly, as alternative questions to judge if they were telling the truth or not. When asked to sign their names, we found that illiteracy far from uncommon and the basic task of signing one’s name can be one of the hardest things for some of these women to do. Eventually all the selected individuals received their pre-specified loans and one group even declined to take their loan asking for a short extension to think about the feasibility of their repayment schedule.

We are hoping to have a 70-75% success rate on these loans, but it is a pilot project as no one has really targeted the HIV/AIDS community in the microfinance sector. Small loans, officially used to help the poor raise themselves out of poverty through facilitating an income generating practice, rarely target the poorest of the poor, and look for individuals that have more potential business skills or collateral and have shown their ability to repay loans through previous practice. Here, we are targeting a sector that is notoriously the most impoverished and socially shunned as well as more susceptible to common diseases. The hope of the Arusha Project microfinance project is that because of their condition, these women will realize the great opportunity they are given, be pushed by their peers to produce, and want to return their loan so that the program can grow and help more of their neighbors and friends in the future rounds to come. The future of this project, or lack there of, essentially lies in the hands of these 50 women.


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