Micro-Credit

It's late now so I hope I'll keep this post short;-) It's funny from my position here in western Pennsylvania. Spring has come so we have warm days, although I bet you'd think them cold. But I just stepped out to see a frost has fallen. The tulips here were so beautiful yesterday, but a hard frost made them nod their big heads and the tender leaves of some garden flowers were burnt by the frost. That's gardening here in the springtime.

I know that the BSLA is busy with many activities right now. I also know that some of those probably shouldn't be discussed publicly at this time. It's a little hard to always know the what's okay and what's not. I hope you'll feel free to edit out information that's best not public now.

One of the efforts we are working on is developing a micro-credit and savings scheme--revolving credit--for women in villages. The work on the proposal is very good, but it raises questions and problems to be solved too.

It seems quite possible that the BSLA may be able to find donors to fund some loans, so lets proceed with the assumption that we can find an infusion of money. Ah, but then it's a separate problem of how village women will earn money within the community using their loans. The fact that many in the communities have little money to spend makes earning money a real challenge.

Looking over the business that are being funded by Kiva in various communities around the world one can see that there are a wide range of businesses. It also seems clear that many of the loans are made to established businesses so that these businesses can grow. That makes sense because the people getting the loans have already proven that they can make money with their businesses.

The target population of our proposal is different. These women do not already have businesses, the loans are meant for them to use to create businesses. One thing true is that many businesses fail. It's very important for the future of BSLA micro-credit programs that most of the businesses succeed! So we have to pay close attention and be very sure that these loans if we can get funding for them actually are used to make businesses providing goods and services that people in the communities will spend money on.

I was very impressed to see the Web site of The Uganda Community Tourism Association. There the development of handicraft businesses is hand in hand with the development of tourism. Tourist come and purchase goods and services to make their visit an adventure. So in this plan the money comes from outside the community.

Also at Kiva I saw several loans for a village in Mali. Unfortunately I wasn't able to find them again when I looked for them a day or so ago. Those interested me quite alot because the micro-loans were shared by groups. Each group had a leader who was responsible for the loan, but the risk of not being able to pay it back was shared. That is the loan was divided between the member of the group so that each member was responsible for a small amount of money.

This seems a particularly good plan for dealing with loans for agriculture. One of the plans provided seeds and other inputs for a group of farmers. By joining together it perhaps makes the marketing of their crops better. Most importantly ill-health or some other misfortune will not jeopardize the whole loan. If one of the farmers gets ill others might help with his crops so that the crops could be brought to market anyway. That's a good measure of security.

In that same village several women--I think it was about a dozen-- divided a loan so that each woman would get an equal amount of money to buy materials for making handicrafts. Again pooling the resources has many advantages: they can make lots of product and the marketing and business planning can be shared.

There are special challenges for developing micro-credit programs for the poorest people. Business requires planning. One of the most important things is to have a solid plan that the goods or services will be purchased. The point is to make enough money to repay the loan and to make some profit. For people making their first business, the idea of groups or teams seems like it would often be a good idea to reduce the risk that the loans will be paid back. The BSLA cannot afford too many failures in the beginning.

So I ask that we keep in mind the question: Where's the money coming from? By that I mean the money for the products and services produced by the businesses, not the question: Where are the loans coming from.

The picture is from a BSLA small garden project in Nawasinge. Small raised garden beds which were intensely planted were made in that village.

BSLA Organisational Management

Organization Structure

(a) General Assembly
The general assembly is the supreme organ of BSLA and is responsible for electing board members, approving policies and programmes of the organization.

(b) Management Committee
A nine-man committee is elected after every one year to manage and over see the affairs of BSLA for period.

(c) Secretariat
BSLA has a secretariat of five qualified and experienced staff in the field of Agriculture, Finance and Accounting, Social work and Administration

Identifying Local Resources

Wow I always let things go until it's late at night. It's rather fun at the beginning of a blog because I don't have to worry much about lots of people reading what I write. It's true that every blog post could be improved by taking the time to do a second draft, but there's also some advantages of just saying what's on the mind. It seems perfectly okay to have very conversational post along with ones that take a little more time to develop on the same blog.

I added some links. While I was doing that I was thinking about how important it is, when thinking about developing programs to sustain micro-credit for enterprise building, that we take an inventory of resources that are local. It is good to identify the problems and challenges of the area too. But the way that loans will have a positive effect is by building on what's already there.

One of the links is to KickStart. I see now that I used and older site in the sidebar, that's because they used to be called Appro TEC, an organization which develops new market technologies to be bought by local entrepreneurs. For example they are the ones who developed that seed oil press we talked about a long time ago. KickStart believes that it's best if people buy their products rather than giving them away. One reason for their growth and success has been that the product designs are fully connected in the local economies. They are built in Africans, sold by Africans to Africans.

Not everyone is really made to be an entrepreneur and to start their own businesses. One of KickStart's products is a water pump for agricultural use. The least expensive model is over seventy dollars US. A person has to be quite serious about making the decision to buy one. So they KickStart sees people buying theri products as a way to make people think seriously about their businesses and to think about how the purchase will help them over the long term.

I also put a link up for the Village Enterprise Fund. That's an interesting organization which is working closely with Kiva. Instead of sponsoring micro-credit, like Kiva, the Village Enterprise Fund gives grants. I also put a link to Travels with Carl because it's a good idea to look at the work that Kiva and VEF are doing in the Tororo District so we can learn from their experience. Something for certain is micro-loans by themselves aren't enough: there have to be programs in place to make sure that the businesses and other uses for the loans and grants have a good chance of success.

It's important for the BSLA to consider ways of attracting investments in the community. At the same time we as an organization have to find ways to make sure those investments will genuinely help, and to find ways to help people getting loans to make money to pay them back by developing income generating activities over the long run. At the same time we have to support the efforts of the BSLA while we're doing all these things. It's quite a puzzle to fit together.

One good reason to write about the problems we're trying to solve publically is that many people can work together to help find solutions, even to help us find the missing pieces.

I think it will be a good idea to save lots of links on the sidebar here. As many organizations who are working in the same district as the BSLA and have some sort of Web page should be linked to. We're open to suggestions for links to add. Also I hope a few members will write posts for this blog and that you suggest that they do.

I haven't really gotten to the point of this post, but it's late now so I'll leave it for another day. Before I go I'll link to this post over at the Kiva Chronicles. Wow, they met Dr. Mohammed Yunus! There's a good picture too. That reminds me, I need to add the Grameen Foundation to the links. Okay tomorrow;-)

Creativity

John,

Thank you very much for your efforts, I like people who are constructive and developmental, What you you have done is really a good idea, this one way for promoting BSLA activities Internationally.

Being an administrator, I will try my level best to update the BSLA blog on daily basis. I want to work hand in hand with you, so that we gain a small donation for the start of the BSLA Micro-Lending Project. Micro-lending can be a tool to help eliminate Poverty from this region. "Behind every a success there must be a successful woman" So we want to find ways to develop enterprises for women in the villages to use small loans to develop income generating businesses and activities. John, we want you to be instrumental which BSLA in make this happen.

It is a long journey ever since we started the BSLA, but then here is the time BSLA to make a blog. It will the very project to find solutions and support for the Poultry project, and Adult Education programs. It's also a way to work out a clear direction; to identify the problems and to find solutions for implementing savings and lending projects to encourage income generation among the people in our region.

We have found fellowship together. I've learned from our friendship that people from far and wide can find common purpose together. I said when we first wrote that I was interested in exchanging views. I still am. It's fun to learn about the lives of people everywhere. I hope people reading this blog will enjoy learning more about us and our community and will leave comments so we all can engage in conversation. Together we will all be stronger and happier.

Thank you for creating this Blog

Nathan

Inaugural Post

Hello, I'm John Powers. I'm also known as Kaunda over at the Bazungu Bucks blog. For several years now I've been corresponding with Magumba Nathan who lives near Iganga, Uganda. Nathan has been instrumental in organizing a community-based organization there called the Busoga Shining Light Association, the BSLA for short.

It's always a struggle to do the right thing; that is to invent just the right effort. Nathan works full-time as well as trying to organize activities and manage the BSLA as the organization's Chair. So most of the time our conversations center around those issues.

For a time the BSLA had static Web pages the BSLA was paying for. There are too many Web pages out there to attract attention, and who needs yet another brochureware page anyway? For a while now, Nathan and I have talked about using a blog for a Web site. It's important to understand that access to the Internet is much more of an effort for the members of the BSLA there in Uganda than it is for people in many other places, even Kampala, Uganda's capital city. So we've been slow to begin a blog.

Recently Dave Winer wrote The Internet as "idea processor" :

The value of writing publicly on the Internet is that you can solve problems quickly, by using a network of people who pool what they know to create something larger. When the Internet works this is why it works.

Wow, is he ever right about that. So it's better late than never for the BSLA to start blogging and to make public our network to expand it.