Revolving Loans

We partner with several widows groups providing them with revolving loans for income generation projects.

The idea for revolving loans was inspired from the ideas of Muhammad Yunnus’ micro-financing and from the initiative of the first widows group. Using participatory research methods the widow’s group members requested and discussed with us the best way to implement this project. We agreed that:

•    There would be no deadline for repayment

•    The only penalty for never repaying the loan would be no access to a future loan

•    If and when the loan was repaid the group would have access to another loan, most likely for a larger amount

•    The loan was to the group, not to any individual member

•    The group was responsible for the internal administration of how the loan was to be used and repaid

•    At least part of the loan should be used for an income generation project that allows members to earn income and allows for the loan to be prepaid

The first widows group received their first loan of $400 In October 2008. With this money they purchased 40 chickens, one for each member. They planned to have the loan repaid in one year, however, the following April their first loan was fully repaid. As promised, the group received their second loan (the original loan plus $200). With this loan they bought 40 pigs. They repaid this second loan in November 2009, thirteen months after receiving the first loan. We are currently awaiting funding ($400) to offer this group their third loan with which they plan to purchase 40 goats.

Impact

The impact of these loans is difficult to measure in absolute terms. The widows themselves have expressed the impact that they saw from the first loan:

•    “My children had never eaten eggs before”

•    “I had never tasted eggs before”

•    “We normally don’t have anything special to eat at Christmas, this year my children had something special to eat, they ate eggs, they were happy and they felt like children who have fathers”

•    “My child went to school wearing a uniform for the first time”

•    “I was able to sell the eggs and buy items we needed like salt, soap and scholastic materials for my children”

•    “Eating eggs keeps me and my children healthy”

•    “I appreciate this loan endlessly, selling eggs allows me to purchase medicine”

•    “I was sold the eggs and bought items we needed like lantern fuel so my children can study at night and soap to wash our clothes”

•    “I am hatching my eggs to buy books for my children so they can stay in school”

•    “The money I get from the eggs pays for my children’s school fees”

•    “My children are happy now”

•    “Before this loan I had lost hope, but as we started this project I got some hope back because I saw the beginnings of happiness in my children, I couldn’t imagine that my children would be happy again, we now have hope for our future”

•    “Before this project I used to get sick and stay in bed for weeks wondering if I was going to die, my children would go hungry and suffer during this time. Now when I get sick I tell my son to go and sell some eggs and buy medicine for me and in a few days I recover and can care for my children”

February 2009

Though the first loan only amounts to $10 a family the impact of having a chicken in each household helped form the first steps for these women to go from a place of helplessness and hopelessness to a belief in their own abilities and hope for the future.

The group itself provides a system of support and togetherness, many of the women have expressed that the group solidarity is what has gotten them through the most difficult times.

New Groups Form

From the success of this first group we began to wonder if this kind of project might work for other widows not yet organised into groups. We began some participatory research to see if this idea was something that other widows would be interested in, we very soon had a second group formed, and they received their first loan in February 2009 and in October 2009 they had this loan fully repaid. Seeing the second group met such successes, third and fourth groups were formed. Groups three and four received their first loans in July 2009. A fifth group has formed since and a sixth and seventh group are currently in the process of forming.

We are looking for funding to support our revolving loan program:

•    Widows group V - $280 for their first group loan, this will be used to buy one chicken for each member.

•    Widows group II - $120 for loan #2, will be added to the $280 from the first loan, paid back Oct 09, this will be used to buy one pig for each member.

•    Widows group I - $460 for loan # 3, will be added to the $570 that has revolved through the group providing them with a chicken and a pig each. With this loan the group will buy one goat each.

•    Widows group VI ~ $330 for their first group loan, this will be used to buy one chicken each.

•    Widows group VII ~ $330 for their first group loan, this will be used to buy one chicken each.

•    Widows group III - $150 for loan #2, will be added to the funds from the first loan, this will be used to buy one pig for each member.•  Widows group IV - $95 for loan #2, will be added to the funds from the first loan, this will be used to buy one pig for each member.