Small loan allows Anna operate a tiny business!
HOPE Ofiriha provided small loans, basic business training and on-going guidance to groups of South Sudanese women stranded in the outskirts of Kampala.
This enables the women to develop self-sustainable livelihoods, to feed, clothe, educate their children, and work their way out of the poverty trap. By the time of reporting, the charity had six groups, each group with 50 members. Since inception had made 400 loans to around 300 women directly impacting the lives of 1400 family members and dependents.
They receive individual loans, but take responsibility for repayment of each other’s loans collectively. The group structure is similar to the one used by Muhammad Yunus’s Grameen Bank, where joint liability for repayment alleviates the lack of security or collateral on the loans. This means that if one member gets into trouble, the others provide assistance and support to ensure success throughout the group. In Uganda the average loan size ranges from USD 100-250 per member.
The microloan programme is complemented by group cohesion training. Since around two-thirds of our clients have little or no schooling, we consider the training to be essential to the overall success of our programme. To this end, all clients receive four training sessions before their first loan, and subsequently receive training during loan cycles as required.
At a request of the group a client is charge interest on loans, and this contributes towards running costs of the group-organization. The groups are working making the operations sustainable in the long term, and interest payments covering local overheads. We have projected the microloan programme will be operating at a sustainable level by the end of 2012.
However, we do not believe that universal access should be sacrifice in the pursuit of sustainability, and consequently we place an emphasis on ensuring we are serving the poorest clients (South Sudanese women) stranded in the outskirt Kampala areas. 135 clients returned to South Sudan in 2011/ 2012.