Kiva Stories from the Field

Nabwire Carolyn, Manager of BRAC Uganda’s Kalerwe Branch, awakens at 5:30 each work day.  A devoutly religious person, she spends the first half hour of each day in prayer.  Next she prepares her two children for the day.   Joshua, age 4, attends pre-school and Ester, age 2, goes to day care.  Carolyn prepares breakfast for the children and her husband, Joseph, who is a computer programmer and web designer.  At 6:30 Joseph departs in the family car to drop the children off at school on his way to work.

Carolyn walks to the Kalerwe Branch.  BRAC requires branch managers and credit officers to live within the boundaries of their branch.  Given the overburdened and unreliable public transportation system in Kampala, and the fact that the BRAC work day begins precisely at 7:00 am, this is a wise policy.

On this day, Carolyn was met at the branch office by five credit officers and Mr. Emma, the branch support staff.  Olive, Demali, Annette and Jackie are micro-finance C.O.’s.  Ms. Raymond is a newly hired credit officer assigned to launch an individual loan program at the branch.

The Kalerwe branch recently celebrated its one year anniversary.  Carolyn, Annette, and Jackie have been there since the first day. 

Carolyn related to me the difficulty of opening a new microfinance branch in Kalerwe.  There are about ten different microfinance institutions operating within her branch boundaries, which extend out about a three mile radius from the branch office.

BRAC follows the same procedure whenever a new branch is opened.  The first step is to conduct a survey of every household in the area.   Carolyn and her credit officers expanded concentrically from the office in ¼ mile increments, not missing a single residence.

The BRAC survey asks basic questions of residents to determine their relative wealth compared to their neighbors.  

At the end of the day, Carolyn took her survey results to the LC1, the local elected official who oversees most activity in the area.  The two of them went through the surveys and the LC1 used a red pen to check off the lowest 50% of residents in terms of wealth and income.   Anyone with an existing loan from another Microfinance Institution was eliminated from consideration.

The households with the red checkmarks were BRAC’s initial target customers.  Carolyn and her staff went back to those homes to invite the female head of household to an informational meeting.  Their initial greetings were not always positive.  Many MFI’s have operated in this area, promising much and delivering little.  The BRAC staff was able to overcome much of that distrust and skepticism at the informational meetings.

Groups were formed consisting of four to five subgroups of five members each.  The sub-group members were friends and neighbors who were required to guarantee each other’s loan repayment.

When I asked Carolyn about her best day as a BRAC Manager, she said it was the day she disbursed her first loan, just six weeks after opening the branch.

After one year, the Kalerwe branch is nearing full capacity.  The maximum number of members served by a BRAC branch with 4 microfinance credit officers, assuming a maximum of 30 members per group and three group meetings a day for 5 days, is 1,800 members.   The current membership roll at Kalerwe stands at approximately 1,400.

When I asked Carolyn about her worst day at work, she told me about the time it flooded and she had to slog through mud and flood water to reach her group meeting, only to stand on a table once she arrived.

The part of the job Carolyn enjoys the most is attending group meetings.  Like snowflakes, no two meetings are the exactly the same.  She finds them interesting and usually amusing.  If she is having a bad day, she says she forgets her troubles at a group meeting.

Carolyn believes in BRAC.  When I asked her what makes BRAC different from the other Microfinance Institutions operating in her territory, she replied;

1.        BRAC’s interest rate is lower.

2.       They do not ask for collateral.

3.       They keep overhead down to about 10%, loaning the remaining 90% to poor borrowers.

4.       They do not make members feel inferior.  Members interact freely with a respectful staff.

5.       The objective is poverty reduction and empowering women, not profit.

6.       They loan money to poor women who have been denied credit by other MFI’s.

7.       At meetings all members sit on the ground on mats in a horseshoe or circular pattern, which she believes is unique and indicative of BRAC’s spirit of equality and group dynamics.

 One of Carolyn’s primary duties is to prevent loan fraud.  Every afternoon and between morning meetings, she personally interviews loan applicants at home and at their place of business.   On the home visit, Carolyn listens for comments from neighbors and assesses the applicant’s living conditions.  She confirms the size of the family and the marital status of the applicant.  Not only is she there to approve or deny the loan, she also has to determine an appropriate loan amount.  Loaning too much money places an unnecessary strain on the borrower and creates a temptation to use excess money for personal purposes.

At the applicant’s place of business, Carolyn fills out a loan appraisal form as she critically examines the business.  She asks questions, examines inventory, and tests equipment to confirm it operates.

Another valuable source of information is feedback from the members of the borrowing group, especially her sub-group of four loan guarantors.  Although these women might be reluctant to speak publically against a loan application, they often approach Carolyn or her Credit Officers in private with their concerns.

Finally, the applicant’s credit officer conducts a separate but identical loan assessment.

After conferring with her C.O., Carolyn signs a loan approval which is sent to her Area Manager and Country Office for review.  In one year and approximately 1,400 loans, the Kalerwe branch has not had a single uncollected loan.

Another of Carolyn’s major responsibilities is to train and develop her credit officers.  Most BRAC employees are green; joining the company with no previous microfinance experience.  Carolyn is proud that several of her C.O.’s have been promoted since the branch opened.

Carolyn attends three group meetings each morning.  Her role is to observe and double check the C.O.’s work.  She randomly samples five pass books against the computerized collection sheet to confirm the C.O’s entries.  She also evaluates the C.O.’s conduct of the meeting, including promptness, attendance, and meeting content.

Recently, BRAC Uganda partnered with Kiva.org to raise 0% interest funds for BRAC.  The Kiva model is based on “peer to peer” lending from individuals in developed countries to poor borrowers in developing countries.  The model requires a digital picture of the borrower as well as a written profile of the borrower and the business purpose of the loan.

Branch Managers have responsibility for collecting this information.  Carolyn has quickly become an expert using a digital camera at group meetings.

 The manager and C.O.’s arrive back at the branch at about noon.  They spend the next hour counting and reconciling loan repayments from the morning meetings against the computerized collection sheets.

At 1:00 pm disbursements begin.  All members whose loans have been approved are scheduled for a loan disbursement appointment.  The women are called into the office one at a time from a waiting room.  After the member signs loan documents, Carolyn confirms her identity, signs the documents releasing the money, and records the loan in the member’s pass book.  The credit officers then disburse the loan amount from funds collected that day.

After lunch, Carolyn typically conducts loan due diligence, visiting homes and businesses of prospective borrowers.

The BRAC business day ends at 4 pm.  Before leaving the branch Carolyn must enter all collections and disbursements into BRAC’s proprietary RADAR program on the office computer.  Next, she prints computerized collection sheets for the group meetings scheduled the following day.  Once that task is complete, she returns home to her family, fully prepared for a fast start at 7:00 am the next day.

How does a 48 year old widow in Uganda with no job, no savings, very little education, and no business training provide for eleven orphans, ranging in age from 9 to 17?

One answer is to take out a US $180 micro-loan from BRAC Uganda and work very hard to establish and operate two successful small businesses.

The story of how Bayiyana Regina came to be the sole supporter of eleven orphans is both a tragic commentary on life and death in Uganda and an inspirational tale of sacrifice and perseverance in the face of overwhelming adversity.

Regina and her husband had eleven children. They lived a modest but relatively secure life based on his salary as a primary school teacher. Then in 1987 her husband developed a “headache that lasted three days, and he died”, according to Regina. She was left with no savings, no pension and only a small, one room mud brick home located in a swampy flood plain in Bwaise, Uganda, a northern suburb of Kampala, the capital city.

Since then, seven of her eleven children have died; two from AIDS and the remaining five “fell sick” from unspecified illnesses. Of the surviving children, one is “missing”, two are “just around”, and one is a student at Makerere University, Uganda’s leading university.

The eleven orphans in Regina’s care are all family members. Some are her grandchildren, where both parents died of AIDS, and some are the orphaned grandchildren of her deceased brother. She looks after seven boys and four girls.

When I asked Regina about the worst day in her life, she paused and replied it was the day her brother went off to work and never returned. He died on the job. Regina counted on her brother. He lived nearby in a small, half-finished two room home. He and Regina relied on each other for mutual support. The day he died, Regina knew she would provide for his orphans as well as her own.

Regina’s greatest hope in life is that her son will graduate from university and get a good paying job to help support the children. Until then, she works extra long hours to contribute to his tuition. When school is not in session he returns home to work hard like his mother, performing casual labor such as delivering water and doing other peoples’ laundry.

Regina is a very serious person. As I interviewed her following her weekly BRAC group meeting she seldom smiled and never laughed. When I asked her what she does for enjoyment, she replied she “sleeps”.

All this changed as we walked down the soggy lane approaching her modest house. Her orphans ran to be at her side. The first to arrive was Marvin, a young boy who was injured in a fire. He has burns on his arms and legs and about half of his left foot is missing. None of that seems to bother Marvin. He wore a constant smile on his face and he was the first to reach his grandmother. She handed him her bag, which he proudly carried for her. I sensed Marvin occupies a special place in Regina’s heart.

As the children grouped around us, Regina’s stoic composure softened. She smiled and hugged her orphans. They obviously worship her and she relishes their company and devotion.

Regina’s microfinance group was formed less than a year ago. It consists of five sub-groups containing five members each. At their first meeting, the 25 group members elected Regina as their group leader for a two year term.

Regina’s primary business is selling roasted chicken. She buys live chickens during the day, kills and cleans them, and then roasts the birds in a charcoal fueled oven and sells them on the covered sidewalk in the commercial center of Bwaise. She starts selling roasted chicken at about 6 pm. Her first customers are commuters returning home from work. Her next customers are revelers leaving bars in the area. Regina stays on the job until the last roasted chicken is sold, sometime well after midnight.

She shops hard during the day to locate plump birds, paying between 4,000-4,500 shillings each. After roasting and cutting the chickens into pieces, she is able to sell one chicken for 5,900 shillings. She sells six chickens a day Monday-Thursday and seven chickens each day on Friday-Sunday. Her average weekly gross profit from selling roasted chickens is 75,000 shillings, before subtracting fixed costs such as charcoal fuel. This is approximately US $45.50 per week.

One of the threats to Regina’s business is not being able to obtain a reliable daily supply of live chickens. At certain times of the year, especially around holidays, chickens are in short supply.

To even out her cash flow and to guarantee a minimum income, Regina opened a second business of selling fresh water from a water company tap located on her property. She borrowed 300,000 shillings (about US $ 180) from BRAC. With the proceeds of her loan she was able to have the water tap installed as well as replenish working capital in her chicken roasting business. Regina estimates she generates 6,000-10,000 shillings ($3.60-$6.00) profit per week selling clean water to neighbors who do not have a water tap.

The profit from her water business is small but very important. With responsibility for feeding and caring for eleven orphans, earning cash money every day is essential. If the chicken roasting business fails to meet her family needs, she can count on cash income from the water tap.

The daily diet in Regina’s home consists primarily of starches such as posho (made from corn flour), matoke (banana based), potatoes, and cassava. The children wear second hand clothing purchased at Kampala’s sprawling St. Balikuddembe market for 2,000 to 5,000 shillings ($1.20-$3.00).

Some of the orphans sleep with Regina in her one room house. The balance sleep in one room of her brother’s former home, under the supervision of Stephen, an extremely polite teenage grandson who is Regina’s “right hand man” in the family.

Regina’s greatest challenge is paying school fees for the children. Uganda has universal primary education which theoretically provides free schooling for children from Primary 1 through Primary 7 grades. It doesn’t really work out that way. First, additional fees such as uniform fees, book fees, and teacher’s transportation fees are often imposed at public schools. Second, public primary schools are not always available. In Regina’s parish there is only one public primary school and 10 private schools. Finally, the quality of public school education is widely perceived to be sub-standard. The majority of students in the Kampala area attend private schools.

One private school a short distance from Regina’s home charges about 25,000 shillings ($15) per term for a primary level student. Tuition is higher for secondary grades. There are three terms per year.

With a monthly family income of only about $65, it is easy to see how school fees take a large percentage of her household budget.

Regina is a determined woman. She has never been late on a weekly loan payment. She spoke to her credit officer and branch manager about taking out a larger loan when the first loan is paid off. With the additional capital she could raise up a small portion of her swampy land to build a poultry house. Rearing her own chickens will improve profitability by lowering her cost of goods as well as insuring a supply of birds year round.

She has also considered borrowing money to finish the second room of her brother’s house and renting it out. She figures the rental income will repay the loan and eventually contribute to family income.

When I asked Regina what would happen to the children if she was not there, she looked at me through sad eyes and said they would be on the street.

As I bid good bye, I was filled with profound respect and admiration for this saintly grandmother. Impulsively, I bent down to kiss her on the cheek. The children howled in delight and shock at the sight of a tall blond stranger kissing their grandmother in public.

The meaning of my kiss was to let her know that she is not alone. She has the respect of her grandchildren, her neighbors, her peers in the BRAC group, her BRAC credit officer, her BRAC branch manager, the social lenders at Kiva.org who supply funds to BRAC, and at least one American businessman who stands in awe of her unselfish determination.