Hagari Micro Finance
In 2016 an organization called Urugo Rwa Amahoro put on a small business training for the women in our ministry and other members of the community. The training taught them how to set up a business plan, create a budget and reviewed several projects and the problems that could expereince when running a buisness. Over 100 people attended this training. During the training our moms initiated a savings group. Each week they would meet together and save as much money as they could. The Hagari Staff were so impressed with their initiative that they opened a savings account for them to put their money into and started working towards setting up a Micro Finance Program where people could save money and also get a loan.
In Rwanda the government assess families and put them in socio-economical categories. The lowest is Category 1 and the highest is Category 4. People that fall into Category 1 and 2 can only get loans from other micro-finance organizations by applying as a group or by providing collateral (which most do not have). These are typically people that work non-contract jobs and often live below the poverty line of $1.90 a day. 11% of Hagari families are in Category 1, the remaining are in Category 2. The people in our ministry do not have access to these loans nor do they have access to credit cards so getting a leg up to start a business is nearly impossible.
We spent months meeting with the people who participated in the training, visiting different Micro loan organizations and setting up policies for our micro loan program. Everyone we talked to, including the mommas who we wanted to give loans to warned us “Don’t do it, they will never pay you back!” But in our hearts we knew that these moms were worth the risk.
On May 13, 2016 we issued our first loan in the amount of 30,000 ($36). Since that day we have issued 142 loans for as little as 20,000 ($24) to buy chickens, to as much as 1,600,000 ($1,885) to purchase a motorcycle for use as a taxi. Out of all of those loans only one person has defaulted and not had the money in their savings to cover the remaining debt!
These loans are helping many families to take steps toward being financially independent.
Dusabe is one of the mothers we work with in Hagari who has really made a success out of being able to access credit with Hagari Finance. When she attended the small business training she was not running a business and even though she had ideas and dreams fear of failure and the uncertaintly of how to operate a buinsess held her back. In the training she learned about how to make a business plan, how much she could invest and what returns she was likely to get, as well as record keeping and all the other aspects of running a buiness.
When Hagari started offering loans she borrowed 80,000 RWF ($90 US), which normally would have taken over 6 months to save, if at all possible. With this money and her business plan she started a small tailoring shop with kitenge (local African material) for sale. It was hard and scary not knowing if she would be able to pay back the loan and if people would come to her shop. Even though it started out hard, she pulled some money from other sources as well as sales from her ship and she paid the loan back ahead of schedule.
The second time she again borrowed 80,00RWF and as the business grew she was more confident in paying back the loan, which again she did ahead of schedule. Most recently she has just finished paying back her third loan of 120,000RWF ($140 US) which she used to purchase more expensive and nicer kitenge which is what her growing client base wants. She is currently looking at her budget and the cash flow in the business to see if she needs to borrow some more to further increase the selection she can offer.
Access to the training and the loans have allowed Dusabe to become financially secure. This is allowing her to take the steps out of the cycle of poverty which has trapped her for so long.