WMI's president, Robyn Nietert, returned mid-February from a 6 week trip to Uganda, Kenya and Tanzania and provides this report on the status of loan program activities.
After a 5 AM wake up call and a dusty 6 hour drive along crumbling asphalt highways and a crater filled dirt road, imagine pulling up to the WMI building in Buyobo and being enveloped by 500 singing and dancing women who had been waiting all morning to begin the WMI graduation celebration. That's how the trip to Buyobo, Uganda began!
Each January the women organize a grand event to celebrate the hard work of the borrowers throughout the previous year and to honor the business dedication that has continued to result in a 100% loan repayment rate.
It was a joyous occasion that lasted until twilight. Local dignitaries gave speeches congratulating the women, graduating loan groups were awarded prizes and individual borrowers gave testimony about how the WMI loan program had changed their lives. The celebratory march to the trading center, complete with brass band, was a rainbow of fluid colors as each woman strode along proudly in a traditional gomez or new T shirt in the color of her WMI solidarity group.
The women are enormously grateful for the loan program. They send their thanks to all of WMI's supporters back here in the USA. They expressed their gratitude through original songs that they performed during the ceremony. Olive Wolimbwa, WMI's Local Director, penned most of the lyrics. Their renditions of: "What Can We Give You?" and "Small Loan for A Big Change!" were rousing and heart-felt. In return, a small WMI contingent performed, "This Little Light of Mine" as a tribute to how these women have shown their colleagues the way out of poverty through business ownership.
A short video clip of the ceremony is posted on the WMI web site and you can click here to watch it:
The WMI Contingent
My husband, Malcolm Stevenson, and younger daughter, Victoria, a sophomore at Tufts University, joined us on the trip. We met up with Montana Stevenson and Ainsley Morris, who have been in Uganda since last October helping implement the last phase of the Transition to Independence Program. We were also joined by Colleen Rossier, a 2010 UVA graduate in Environmental Science currently working at the Department of Agriculture.
The ladies were thrilled to have a large WMI contingent at the ceremony to honor their accomplishments and to help with loan program operations over the next few weeks. WMI was grateful to have supporters willing to volunteer their time and undertake the expense of the trip. Colleen posted a terrific slide show on the WMI web site, cataloguing village life and loan program activities.
The focal point of this year's trip was finalizing the last phase of WMI's Transition to Independence Program (TIP), which is a joint venture with PostBank Uganda (PBU). In 2010, the most experienced WMI borrowers entered the transition loan phase and began receiving individual loans directly from PBU that are guaranteed 100% by WMI. We had been negotiating with PBU throughout the fall regarding the exact terms of the individual loan product PBU would offer to women graduating from the transition loan stage.
Initially, there was strong disagreement as to the basic structure of the product. PBU pushed for a return to cross-guarantees of individual loans by borrowers assigned to solidarity groups. This is a conventional microfinance feature and WMI and BWA felt strongly that it was time for the ladies to keep marching forward to independence and away from cross-guaranteed loans - especially as the loan amounts were increasing. The ladies did not want to worry about how their neighbors were managing a $1,000 loan that they might be liable for if anything went wrong.
After extensive negotiations, PBU agreed to move forward with a two step independent loan product specifically designed for WMI borrowers. In Phase I borrowers can access loans of up to $1,000 with terms of a 20% deposit, 30% pledged collateral and 11% guarantee deposit by WMI. In Phase II borrowers can move up to loans of $2,500 with a 20% deposit, 80% pledged collateral and no guarantee by WMI. For loans of over $2,500 borrows can negotiate directly with PBU. WMI graduates will receive a most-favored client interest rate from PBU. Additionally, PBU is providing a monthly on-going education budget for BWA to hold additional borrower training sessions in Buyobo.
We were extremely pleased with the outcome of the negotiations. PBU has provided WMI borrowers a unique opportunity to transition from microfinance to truly independent banking at preferential rates that reflect the fact that these clients have business training, an impressive repayment track record and profitable businesses.
WMI was ably assisted in the negations with expert advice from Barry Metzger, a senior partner at Baker & McKenzie. WMI's advisory board member Robert Israelite, a credit specialist, provided us with valuable insight into designing the credit product.
PBU has appointed a manager of microfinance products, Paul Ndhego, who formerly worked with FINCA. He has an in depth understanding of the credit issues affecting rural women and will be a very valuable resource going forward. Olive Namutebi, PBU's manager of business development and strategic planning, has been WMI's main contact with PBU over the past 2 years and is a champion of increasing banking opportunities for women.
One of the highlights of the negotiations with PBU was the opportunity for Olive Wolimbwa and two BWA senior officers, Jackline Namonye and Irene Wetaka, to meet with PBU's Managing Director, Stephen Mukweli, as well as PBU staff, during the final stages of the negotiations. Olive, Jackline and Irene were poised, professional and ready to answer all of the Managing Director's questions about how the WMI loan program operates and how they manage their borrowers. A week later, PBU's Deputy Managing Director traveled the 6 hours from Kampala to Buyobo to meet the BWA team and see the WMI loan program in action. It was very gratifying to watch the BWA management meet their counterparts at PBU to discuss the best way to serve rural women borrowers.
WMI Support In Uganda
As the WMI loan program has grown so has the support it receives from women in Uganda. Denise Kulule, WMI's board member in Kampala, was instrumental in finalizing the independent banking loan terms with PBU. Jeanne Rwakakooko, a corporate attorney in Kampala, lent her expertise to guiding WMI in Uganda banking laws. And, Olive Namutebi from PBU, as always, brings her years of banking experience to bear on developing banking strategies for WMI.
During this trip WMI was also fortunate to be able to discuss development of more extensive training materials with Opportunity Uganda's Managing Director, Archie Meers, and with Carmel Cocuzza, a long-term European Investment Bank project director on sabbatical to develop FinAfrica, a non-profit initiative providing consulting resources to small business operators.
Loan Program Operations
WMI's local loan program operations are becoming more efficient each year as the capacity of the women increases. The ladies of the Bulambuli Widow's Association (BWA) are dedicated to running a professional loan program in Buyobo. Each Sunday they gather to file documents, update records and discuss operations.
While in Uganda, we worked with BWA to systemize expansion of the program in a geographic grid that spreads out loan issues fairly throughout the region. Local Coordinators who live near each new loan area are appointed to each new group.
One of our projects during this visit was helping the ladies understand and manage their annual operating budget, which now exceeds $15,000. Montana and Ainsley had done an excellent job of working with Olive to prepare a detailed list of all local loan program income and expenses. The resulting 8-page budget is taped to the wall of Olive's office and all BWA officers now understand how it works and they track expenses monthly in each line item of the budget. The BWA now has a staff of 15 full and part-time employees, with all stipends and loan program expenses paid directly from loan program interest income.
We spent a considerable amount of time with the staff at PBU Mbale discussing loan program coordination. We are very impressed with how BWA management and PBU staff have resolved issues as they arise. It is a big job transitioning the WMI borrowers to independent banking and we were impressed with how PBU's staff is working to implement procedures that are timely and efficient. The Banking Manual that Ainsley and Montana have been drafting is near completion and will help establish written guidelines and serve as a reference tool for transition program protocols.
In all of the studies WMI has prepared, overwhelming evidence indicates that the vast majority of husbands are quite happy that their wives are in business and husband and wife often run the business together. We saw evidence of this over and over again as we visited women at their businesses, in the markets and in their homes. We are happy to report that WMI loans empower women to start enterprises that are truly family businesses.
Because of this phenomenon, the BWA leadership decided that as the women move on to independent loans with PBU, their husbands will be required to sign as a loan guarantor. The ladies determined that all husbands are benefitting from the loan program. They also found that they are typically supporting the business by working in it or helping with household responsibilities. The husbands were very excited to be included and have since attended a meeting held at the BWA building where they were told about the PBU independent loan process. They believe that it is fair to bear some of the financial responsibility for the loans, considering how involved they are in their wives' businesses.
Olive and the BWA leadership talked to PBU management about their desire to have husbands (or next of kin) sign as guarantors for the independent loans. PBU's Managing Director was very impressed that the ladies' had analyzed the way their clients' businesses operate and made this decision to include the spouses.
We spent a week driving all over eastern Uganda, visiting WMI loan program hub locations in Wabulenga (outside Jinja) and in Bumwalukani (in Bududa District). The women's businesses are doing extremely well. We also launched the first loan group in Konokoyi village, also in Bududa.
BWA trainers traveled with us and seeing them in action in marvelous. They connect with the new borrowers based on their shared experience of also being borrowers. The peer-to-peer knowledge transfer is impressive and effective. We provided supporting roles in the training skits and teaching WMI loan program songs to the new borrowers. Plus, we got to count out the money for the new loans and hand out the envelopes - no matter how many times I do that, it is always a memorable experience! We also toured new villages and met with local CBOs requesting launch of a WMI loan program. There is enormous need and little opportunity for rural women to access credit.
The WMI loan program has come a long way in three years. The BWA leadership has developed excellent loan program management skills. Borrowers are expanding their business and there are visible signs of economic growth and development is so many of the villages where WMI operates. Putting the last puzzle piece in place in the transition to independent banking program was a huge step forward. It closes the cycle that makes the WMI loan program self-sustaining. With this completed, WMI can expect to expand its loan program hubs even more rapidly.
In a few weeks we'll post more slide shows from the trip on the WMI web site as the March photo of the month!