In 2016 an organization called Urugo Rwa Amahoro hosted a 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 and create a budget. They also reviewed several projects and troubleshot problems they might encounter when running a business. Over 100 people completed this training. During the training, mother from Hagari initiated a savings group. Each week they would meet together and save what money they could. The Hagari team was so impressed with their efforts that we opened a savings account for them to put their money in and started working towards setting up a micro-finance program, where people could save money and also get a loan.
In Rwanda the government assesses families and puts them in socio-economic categories. The lowest is Category E and the highest is Category A. People that fall into Category D and E can only get loans from other micro-finance organizations by applying as a group or by providing collateral (which many 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 E, 77% are in Category D and 12% are in Category C. The majority of 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. Even if they could get a loan from other banks or micro-finance institutes, the standard interest rate is 17%.
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 mothers 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 families were worth the risk.
On May 13, 2016 we issued our first loan for the amount of 30,000 ($36). Since that day we have issued 177 loans, from 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, over 95% of them have been repaid!
These loans are helping many families to take steps towards financial independence and kwigira!