We had seen aid schemes in Africa that involved sending out money to buy goats, pigs and similar items for needy communities in lieu of Christmas presents in the UK. Although this scheme is good, upon our outreach programme with groups of local women, we gathered that, whilst grateful for this support, there was a general feeling that two goats or a couple of chickens could never meet their continuous financial needs.
We learnt about the existing group savings schemes they operated. These groups of women effectively had a very small microfinance scheme running already, but were unable to grow their meagre savings in their existing circumstances.
Each group member contributed a small amount of money every month (literally a few pennies) to a communal fund that was periodically lent out to a member of the group to use for her own small project. The funds were paid back over a few months with interest, and in this way, individual group members obtained access to an unsecured loan. The only way in which the fund could grow was through the addition of the interest charged to borrowers.
The women told us how they would utilise a bigger to really start lifting them out of poverty. Not needing to reinvent the wheel, we decided to support their scheme and ran a trial, lending the equivalent of £250 to a group. This was repaid on time and the Obumwe Microfinance Scheme was born.
The project was refined after numerous consultation sessions and case studies. All beneficiaries were given training in running savings schemes and only provided with loans if they already had an existing communal funding pot.
The Obumwe Microfinance Programme now provides loans with a low interest rate to cover our administrative cost. The the majority of the groups are women running agricultural projects in potato, cabbage, passion fruit and onion crops. There are also some small bee-keeping ventures which we would like to see expanded.
The groups have the autonomy to either use the funds for their communal project or to make loans to individual members. They have control of who the beneficiaries will be and have set policies, fines and interest rates. As a result, each group can increase their own fund significantly making them self-sufficient, while the initial investment from us can be re-used for another group.
To date the Obumwe Microfinance scheme has provided loans to over 50 groups and boasts a 100% repayment rate.
By donating to support the Ubumwe Microfinance scheme you will be empowering the women to expand their farms or projects and enable us to to expand our outreach programme to support more women-led projects.