Kiva Stories from the Field

Not Your Average Courtroom Drama

17 February 2010 at 07:10 Sara 8 comments

By Sara Strawczynski, KF10 Rwanda

The atmosphere was tense. All eyes were on the defendant, a small woman in her mid-thirties. She rose from her seat and softly explained her final argument– I know now that I’m guilty. I should have paid on time, but my children were sick. I had to take them to the hospital and could not be home when it was time to make the payments. I’m sorry I didn’t explain this to you sooner, but I didn’t realize how much this matters to the group. She slunk back into her chair, and the jury began to deliberate.

The scene unfolding before me was no courtroom drama, it was a routine Community Bank meeting at Urwego Opportunity Bank (UOB) of Rwanda. UOB is a brand new field partner, Kiva’s second in Rwanda. It is also my workplace for the next three months. While here, I will be working with staff at the Kigali headquarters, as well as those located in branch offices throughout the country, to get UOB up and running on the Kiva platform.

Urwego’s most popular service is the Community Bank. Each Community Bank consists of 20 to 50 people who generally lack collateral and would not qualify for loans at commercial banks; instead, members receive a microloan (ranging from $50 to $1500 per person), but agree to cover defaults of other group members. Members elect leadership including a President, Secretary and Treasurer, and organize internally to collect weekly repayments from members. Each Community Bank establishes regulations about how the group will run, such as setting penalties for late payments and creating a contingency fund to cover any peers who cannot make a payment. During mandatory monthly meetings, members review how repayments are going, plan for future loan cycles, evaluate potential new group members, receive classes on various skills related to running a small business (such as customer service, accounting etc.), and debate challenges facing the group.

My first Community Bank meeting was long (over three hours, and a dozen babies and young children sat patiently on their mothers’ laps through the whole thing), but witnessing how the group publicly and honestly reviewed its progress and collectively made decisions held my attention, and that of the group members, for the duration. Proceedings got especially intense when the jury – all of the members of the Community Bank – debated the fate of their peer who had missed several payments. A range of feelings were expressed: sympathy for her personal challenges, anger over missed payments, worry about jeopardizing the financial stability of the Community Bank, and disappointment that she was letting everyone down. Several courses of action were proposed; ultimately, members agreed that the woman presented too much of a risk to the Community Bank, and that she would not be admitted to the upcoming four-month loan cycle; however, they invited her to continue attending meetings and agreed to admit her back into the group in the future, if she delivered a more robust business plan. The defendant was upset, but she accepted the verdict as fair.

Attending this routine meeting opened my eyes to how personal and dramatic microfinance can be, but also how the model promotes strong community bonds. Entrepreneurs had taken loans to support their own small businesses, bu they became united in the process, looking out for the financial stability of all members. Kiva helps expand and strengthen the global microfinance community, so stay tuned for Urwego’s first loans on the Kiva website in the coming weeks. In the meantime, consider supporting another worthwhile entrepreneur by checking out Kiva’s current lending opportunities.

Sara Strawczynski is a Kiva Fellow serving her placement with Urwego Opportunity Bank of Rwanda. Loosely translated from Kinyarwanda, urwego means ladder, and UOB aims to help Rwanda’s working poor climb the ladder of economic empowerment.

Entry filed under: Africa, Countries, KF10 (Kiva Fellows 10th Class), Kiva Field Partners, Rwanda. Tags: Africa, Community Bank, Kiva, Kiva Fellow, kiva microloans, microfinance, Rwanda, Sara Strawczynski, Urwego Opportunity Bank.