Arusha Project

The First Repayments
July 31, 2007, 12:58 pm
Filed under: Microfinance, Uncategorized

Five women greeted us with wide smiles, kissing us on each cheek. We sat down in a humble room and started to ask them how their businesses were doing, how their lives were going. The last few days have marked the first date of repayments for the Arusha Project microfinance project. Out of ten groups, six have repaid us promptly and some individuals have opted to repay a larger sum than required – a very good sign for the future of the fledgling project. Loans last six months with monthly payments so that borrowers are not faced with the substantial task of coming up with one large repayment at the very end of the period.
After warm introductions, Cheryl pulled out a survey that the women are asked to complete each month along with their monthly repayments. Questions cover HIV status, family status, income, and food consumption patterns. This is our way of tracking the success of the microfinance project. If a woman decides to get tested or has a family member tested, if she is able to buy chicken for dinner, and if her monthly income rises, then we will be satisfied that the project has enabled our borrowers to improve their standard of living, which is the ultimate goal.

The women smile and laugh as Cheryl asks in Kiswahili, how often do you eat sukumoiki? Everday. Ugali? Everyday. Chapati? Once a week. Chicken? Once a month. These women are poor, but they do have their own businesses, selling parachichi (avocados), ndizi (bananas), used clothes, or roasted corn, that the Arusha Project loan has helped jumpstart or reinforce. Cheryl tells them they are strong women and they are thankful, for the loan and the trust we give them. They feel empowered, you can tell in their eyes.

For the most part, repayments were a very encouraging experience and Cheryl is excited for the future of the project based on the positive responses she has received so far. However, this doesn’t explain those who defaulted on their monthly repayment. This explanation dates back to the issues we faced on the day we gave out loans. Previously, I explained that some women came without IDs and had their organization leader vouch for them. The majority of these women without valid IDs came from three groups associated with TUPO. Although circumstances seemed very questionable that day, and the women seemed less than confident in their claims, the Arusha Project conceded to giving the women loans based on good faith and previous professional relationships with the leaders of TUPO. Before the loans were given out, Cheryl asked each woman to state the type of business they had described in their loan application so that we could later cross-reference the information with the actual applications we had received. The next day, Cheryl found clear discrepancies between the women’s claims and the paper evidence in two of the TUPO associated groups, showing that the women we had given loans to were not the women that had applied for the loan the week prior. Since then, we have cut off all work and events we have planned with TUPO, including a soccer match, and asked for the entire loan back without interest. Currently TUPO claims that the women had already invested the money and will not be able to pay back the loan for another month. Because this is not an issue we want to take to court, the Arusha Project has again conceded and is in the process of creating another contract for TUPO in which the women will repay the entire sum of the loan without interest in one month from now.

We hope for the future of TUPO, an organization that we still think has good message and good membership, yet questionable leadership, and the future of our loan program, that the issue will soon be resolved. Until then, we are optimistic about the beneficial impact the loans will have on the lives of the altruistic women we have reached.
– Kaia


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