Having suspended annual field trips to loan hubs during Covid, WMI President, Robyn Nietert, returned to East Africa in January for the first time in three years and reports on the status of WMI loan program operations and impact.  

Country Updates:

Uganda. Last week the New York Times reported on the devastating impact of inflation on the Ugandan economy. Using the 100% increase in the price of the popular street snack called a rolex (chapati wrapped around an egg) to illustrate the economic crisis in a country where one-third of the population lives on less than $2/day and nearly half of the population is under 16, the article reported dramatic increases in the cost of staples such as cooking oil, flour and eggs. Responding to the crisis the government promised to improve production of local staples but “President Yoweri Museveni also provoked outrage when he told citizens to stop complaining and instead eat cassava, a starchy root vegetable that many consider far less delectable than a rolex.” NYT

Kenya. Although the country is rebounding from the crippling effects of Covid on its tourism sector, the drought in the Horn of Africa is entering its sixth year, creating food insecurity, water rationing, conflicts over livestock grazing, and extreme uncertainty in the agricultural sector, which accounts for one-third of the country’s GDP and employs 70% of the rural population. Last Sunday the President, William Ruto, announced the country’s first ever day of prayer and exhorted religious leaders to dedicate the day to praying for relief from the drought. Following last week’s visit to Kenya by First Lady Jill Biden, USAID announced, “it is providing more than $126 million in additional food assistance to the people of Kenya as ongoing drought leaves more than four million people in the grips of a dire hunger crisis, with the number expected to rise to over five million by June.” USAID

Tanzania. The drought in the Horn of Africa also affects Tanzania; accessing clean water is becoming increasingly difficult and that burden falls disproportionately on the shoulders of women and girls who are typically expected to collect water for the family. The country just released its 18the economic update, which found that only 61% of households have access to a basic water supply, 32% to basic sanitation, and 48% to basic hygiene. “The heaviest toll is being borne by women, children, and the poor and vulnerable.” Massive investments in drilling boreholes, improved seeds, food reserves, and water harvesting are advised to mitigate the effect of a shortage of rainfall. Report

Annual Visits to Loan Hubs Resumes

Returning to rural villages in Uganda, Kenya and Tanzania after a three-year hiatus was exhilarating, inspiring and extremely enlightening. Although we used virtual platforms to continue working with our local colleagues straight through the pandemic, nothing compares to being on-site touring businesses, talking to women entrepreneurs, discussing operations with our talented staff, meeting local leaders, sharing meals, celebrating loan program achievements, and making a whole new generation of babies cry as they caught sight of their first Muzungu.  

Relying on the resiliency of the network and infrastructure we have built, the loan hubs weathered the pandemic and are now experiencing explosive growth. There is high demand for loans and our borrowers’ businesses are booming. Pent up demand in one reason but another major factor is that as these countries face the economic challenges brought on by inflation and drought, WMI is steadfastly providing reliable access to loans, training and support, making it possible for our women entrepreneurs to thrive in an environment where access to resources is dwindling. 

The effects of Covid will be felt in East Africa for a long time – especially the disruption in schooling and the increase in unplanned teenage-pregnancies. In the villages where we work, rural women are dealing with these realities with their characteristic combination of pragmatism, compassion and resourcefulness. Young women are back in school after giving birth and grandmothers with successful businesses are providing the safety net. Mothers are paying extra school fees for their children to make up for the gap in education when schools were closed. Their businesses make it possible for them to carry this extra financial burden

Discussions with loan hub managers and borrowers uncovered a proliferation of predatory lending schemes to exploit the vulnerability of poor populations which do not have reliable access to capital. “Briefcase lenders” trawl villages, especially when school fees (which have increased tremendously) are due, offering loans that can carry compound interest as high as 20% per month. Desperate parents facing a school fee or university tuition payment (which can be up to $1,000 per term) sign a sale agreement for their house at the time of the loan - if they default the house is sold. Another disturbing trend is “harvest loans”, given to farmers who need capital for seeds and inputs. Traders offer them loans in return for purchasing their harvest (mainly maize) several months down the road at a hefty flat fee discount of 25 – 50% from the market price. 

The need of rural women and families to access business capital and financial services is becoming more acute. More than ever before, poor families are relying on loans of some type, from some source, whether legitimate or shady, to manage household expenses and smooth cash flow. This makes WMI’s mission and the services we provide more critical than ever before. Village loan groups from across the three countries we serve reiterated how important WMI loans and training were to their families’ welfare and how grateful they were for WMI’s continued support.

Our loan administration is effective and the infrastructure we have built is capably supporting operations. We have talented, experienced and dedicated staff managing all loan hubs with great success. The Women’s Leadership Group in Mbale, composed of professional women from banking and other sectors, visited our headquarters in Buyobo to see what our ladies were doing to be so successful. WMI is now poised to expand loan hub operations in all three countries where we work to the fullest extent funds allow.

The best way to convey the integral role the loan program plays in our borrowers’ lives is simply to share the stories and photos from my 5-week trip. You can see for yourself the economic gains, household improvements, optimism for the future, personal empowerment, and just unbridled joy of our borrowers in achieving a measure of financial stability for themselves and their families. 

Busamaga – Chairperson Ketty Habafu told us how WMI loans have made them girls again. Domestic violence has reduced because family financial crises are being averted. The woman counselor for the area gave a hilarious speech accusing men of sleeping while women never sleep. “Men sleep while women work. Today we are jubilating. Tomorrow we will be working. And, tomorrow men will be sleeping.”

The laughter from the men in the front row seats was definitely accompanied by considerable squirming. 

She went on to attribute the loan program’s success to the fact that, “Women are not grasping. If they were grasping, we would not have some this far.” She attributed the impact of the loan program to the fact that, “If you have money in your pocket problems like hunger and sickness do not stick to you.”

Sheik Abud Mutwalib, a respected local religious leader, addressed the crowd because his wife is a WMI borrower and he wanted to give testimony of the powerful impact of the loan program in changing the lives of the poor in the community he serves.

Kyibokko – Take a two-hour trip up a dirt track into the mountains, where roads are impassible in the rainy season, and you will find yourself in to middle of a bustling agricultural town where market stalls are filled with goods and WMI financed businesses are everywhere. Women caught rides on motorcycles and pick ups to attend the event and children followed alongside our van from the moment it came into sight. The celebration at the new pavilion listed the achievements of the women in the loan program:

·        Women have constructed permanent houses.

·        Women have bought farmland.

·        Women look smart without asking their husbands for money.

·        Women are paying children’s school fees without asking their husbands for money.

·        Women are moving forward not backwards.

Expressing their gratitude through poetry and dance, the loan hub presented their

Poem of Gratitude: "The WMI loan program has made women powerful; encouraged them; supported them; enabled them to buy and rear cows, which is a big achievement; and, created household stability. None of this was possible without WMI."

The Kyibokko Girls Dancers performed their original song: Never Give Up.  

Matilda employs 10 people and sells her products at markets in Karatu town. She would like a jumbo loan of $1,500 in the next cycle to further expand her bakery plant.