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Micro-loan project is making progress | Letters | Feb. 26
Flora is a charismatic entrepreneur, well-known in her community of Dar es Salaam, Tanzania. She runs her business from her tiny home. Her house is crammed with one hundred plastic stacking chairs and three large tents, which she rents out for weddings, funerals and other events.
Flora runs her business with the help of micro loans from Tujijenge, a Tanzanian micro-finance institution.
What does Flora have to do with Bainbridge Island? The island’s Rotary Club is helping Tujigenge deliver micro loans. In partnership with Mzizma Rotary Club in Tanzania, and Unitus, a Redmond-based international micro-finance firm, we are expanding Tujijenge’s reach and number of loans.
BI Rotary has plans to reach 500 women and families in Dar es Salaam who are living on less than $2 per day – just like Flora.
These small loans have enabled Flora to increase her rental inventory, which has brought in more income for her family. As the business expands, she is able to pay back her loans quickly, save money, send her son to school and feed her family.
Like other members of Tujijenge, Flora wastes nothing. She uses every last asset for productive purposes. Now Flora is making plans to expand her business, and dreams of one day setting up a hair salon.
This type of project is both new and old for Rotary. In the last 12 years, we have constructed more than 80 wells in Uganda. We have seen what our investment of time and money can do to improve the quality of life of our friends.
We are expanding our focus to micro loans because they have proven to be an effective tool for helping families rise from poverty.
Micro loans are given to groups (of 15 to 40 members) that are split into smaller sub-groups. Members of each group act as guarantors of each other’s loans. For many borrowers, the group’s guarantee is the only collateral they can offer. But it is effective because micro loans tend to have high repayment rates of about 95 percent. The borrowers (mostly women) use the loans to start businesses selling food, clothing and neighborhood services.
But micro lending is not just about money. Once accepted for a loan, groups receive business training, formulate group by-laws, and open a bank account.
A final requirement before the group can receive loans is the ability to save; members must save 20 percent of the expected amount of the loan during the training sessions. The purpose is to build a discipline of making weekly repayments right from the beginning.
BI Rotary is supporting the work of Tujijenge with a grant of $8,000. But over the next year we hope to double that with contributions from other Rotary clubs and from the public. We hope that Bainbridge Islanders will want to join us in this effort to help other women like Flora out of poverty.
To learn more about this effort, please contact Bruce Galloway at email@example.com You are welcome to join us for Rotary’s next Microfinance meeting on Monday, March 1 at 5 p.m. at Wing Point Golf and Country Club.
Marina Cofer-Wildsmith Bruce Galloway
BI Rotary Club