Posts filed under 'Rwanda'
What Do You Mean By “Profit”?
The word “profit” does not translate easily into foreign languages. I’ve now tried to convey the idea both in Swahili and in Kinyarwanda and I often come up with nothing more than blank stares or long pauses. The difficulty lies in what “profit” includes (or doesn’t). A client may answer my question as to what their monthly profit is with a confident declaration of “30,000 Francs”, but when I ask what she uses the profit for, she answers that she pays the rent and pays off her loan. If that is the case, then her profit is not in fact 30,000 Francs but rather is 30,000 Francs minus rent, loan repayment, and other expenses. Unfortunately language barriers consistently stop me from explaining this coherently.
I understand the confusion. It serves as a reminder that many of these business-owners do not have any formal training in accounting or personal finance. Afterall, for much of their lives there was probably no need for this knowledge. They began businesses with survival and advancement of their families in mind, not as a result of thorough market research or financial backgrounds. Yet despite confusion on what, precisely, I’m asking, after some quick calculations every client is able to give me some number. The only problem with the figure is that I really am not sure what it represents. I have often included these numbers in Business Profiles and Journal Updates that I post on Kiva, but I recently realized that they may be misleading so I am beginning to hold off unless I am sure that the question was properly understood.
This is not to say that clients are oblivious to their earnings. On the contrary, they are very much aware of how much is coming in and how much is going out. They price their goods extremely carefully and perfectly in line with market rate. This is particularly essential since many shops sell the same goods, and a shop that tries to sell for more than market rate will quickly lose its customers. My point is merely that a balance sheet is not something that many shop owners have learned to rely upon. Training at many microfinance institutions is improving upon this as they teach their clients basic bookkeeping before disbursing loans, but it’s not yet ubiquitous. This is why I was particularly surprised when I met Aimable, one of Vision Finance Company’s clients.
Upon first glance, Aimable’s ease with numbers was noticeably absent. There was a significant pause when I asked the size of his loan. This is particularly unusual, as this number tends to live on the tips of the tongues of microfinance clients. As Aimable produced a notebook with detailed accounts of all costs, purchases, and sales, I understood how he was able to allow these numbers to slip from the front of his mind. He kept them on paper instead. In the U.S., we might view such paper bookkeeping as archaic. What’s paper? But here, even microfinance institutions often lack computer technology and do most, if not all, of their paperwork by hand. Therefore Aimable’s meticulous calculations make him ahead of the curve, not behind.
Aimable's Balance Sheet--he meticulously tracks all expenses and income
Aimable in front of his shop, bursting into the street with his many goods for sale
As you can see from the photo, Aimable’s business is booming. In fact, he is bursting out of his small shop with his quantity of goods for sale. I can’t say that this is the result of his careful bookkeeping, but I don’t see it as a coincidence that he has both been very successful and keeps close track of his income and expenditures.
Across the board, microfinance clients are impressive in their ingenuity, drive, and ability to survive within the marketplace. With a little bit of training on bookkeeping, they could likely be even more successful. I am optimistic that in the future, such training will become the status quo. I look forward to the day when my excitement at Aimable’s papers fades as balance sheets crop up all over and eliminate the confusion over that pesky word: “profit”.
To see Vision Finance Company’s currently fundraising loans, click here. If there are none up now, please check back soon!
Julie Ross is currently serving as a Kiva Fellow at Vision Finance Company in Rwanda. She recently completed her first placement with BRAC Tanzania.
7 comments 20 February 2009
News Flash: Kiva Is Not Intuitive
Training microfinance institution (MFI) staff on Kiva never gets old no matter how many times I do it. The excitement lies in the great unknown of which questions they will ask once I’ve said my piece. Across the board, the staff I meet are professional and dedicated to their work. Most have been serving hundreds of clients for years before I dropped in to introduce Kiva, so it is not surprising that they are both slightly perplexed by this new element and also extremely invested in understanding it completely. Their questions illuminate for me how confusing Kiva is upon first (or even second or third) glance. My goal is to make Kiva as small a burden as possible so that the staff both collect the required information and do not have to take much extra time to do it. This is how the trainings tend to go:
Step 1: Introduce myself and make sure to mention Barack Obama in one way or another in order to get spirits high and interaction initiated.
Step 2: Explain Kiva and the MFI staff’s role within the Kiva framework. At Vision Finance Company in Rwanda, the previous fellow trained all staff on what Kiva is and my Kiva summary serves as a reminder of what she taught them several months ago. As such, I keep it brief. I emphasize how the credit officers are the most important piece of the Kiva puzzle. If they were to refuse to gather the information necessary to put loans on the website, Kiva could not exist. I also make sure they understand that information on Kiva-funded clients will be put on the internet. We want to make sure that they impart this to their clients and that their clients sign a waiver indicating that they do not object.
Step 3: Introduce business profile templates I created in order to ease the gathering of client information. Prior to the introduction of the form, they were writing up the stories by hand based on what they knew of their clients. Committed to their work, each would spend upwards of an hour trying to think of how to formulate their clients’ information into a story. This was both time-consuming and slightly confusing since some were not sure where the story went (answer: on to the Kiva website). We go over the form, written in English, with explanations in Kinyarwanda (the local language) of what each question is asking. The forms, much as you would expect, request basic personal information like age, marital status, and number of children. The staff are also to ask their clients business- and loan-specific information like what their business is, how long they have had the business, and what they will do with the loan and the profits that result from it. The form is simple because we don’t want the staff to be scared off from completing it. They already have so much work that the goal is not to create a large additional burden. Staff are visibly relieved at the sight of the form, knowing that this means they will no longer have to struggle with daunting blank sheets of paper as they think of what to say about their clients.
Step 4: Questions. One of the most amusing parts of question time, for me, is that the questions are all asked in Kinyarwanda and usually the Kiva Coordinator takes first stab at answering them. That means that for several minutes there may be heated debate, many players involved, volumes rising, and I will have no idea what is being said. When the Kiva Coordinator determines that I should be privy to the conversation, he’ll inform me of the source of confusion. There has been a great range of questions, all of them valid, since I conducted my first training with BRAC Tanzania until now, 23 trainings later. Some examples:
• How do we know when the loan has been funded on Kiva so that we may disburse the loan?
(Answer: you should disburse the loan according to your timetable at your MFI, not allowing Kiva to dictate the timing. If you disburse the loan before it has been funded by Kiva, the Kiva funds, when they arrive, will back-fill the MFI’s accounts.)
• What if Kiva wants to give the client a different amount than Vision Finance approved?
(Answer: Kiva has no role in determining the terms of the loan. Kiva is only a source of funding and will distribute only the amount approved by the MFI.)
• If it is a group loan, do we fill out one form for each member of the group?
(Answer: If it is a group loan, the group president should answer all of the questions and the rest of the group members should be included in the table where their name, loan amount, and type of business are requested. All group members must appear in the accompanying photograph.)
• By raising funds on Kiva, is Vision Finance exploiting its clients to get money for the MFI?
(Answer: By putting clients on Kiva, the MFI is not exploiting them but rather raising the funds necessary to distribute their loans. The money raised goes only towards that loan and not into the coffers of the MFI or into the pockets of MFI staff.)
• What if the client does not want to be put on the internet?
(Answer: If the client is uncomfortable having his or her information and picture on the internet, then choose a different client to be Kiva-funded. We do not want anyone to be uncomfortable or feel forced to appear on the internet. Just because that client is not Kiva-funded, however, does not mean that he or she will not get his/her loan. It means only that the funds will come from elsewhere, not Kiva. Disburse the loan if it has been approved by the MFI and do not let the client’s choice not to appear on Kiva affect whether or not he/she receives a loan.)
• If Kiva’s funds are at 0% interest, does that mean that our Kiva clients don’t have to pay interest?
(Answer: Clients are still to pay the MFI’s standard interest rates. The 0% rate from Kiva is for the MFI so that they may have more money available to disburse more loans and to help them cover the costs associated with serving their clients. If Kiva clients did not pay interest, all MFI clients would soon hear that certain clients are not paying interest and mayhem would ensue. It is more equitable to have everyone pay interest and for the MFI to use the interest to increase their impact on the community.)
• Why does it matter that the loan amount on the form matches the amount that Vision Finance has approved and will distribute?
(Answer: Kiva values honesty and transparency. As such, all loans raised on Kiva must match precisely the amount that is actually disbursed to the client. Ifs more money is raised on Kiva than is distributed to a client (for example, if the requested loan amount is listed instead of the actual loan amount, and the two differ), the MFI will be responsible for reimbursing the loan to the lenders.)
What the trainings remind me is that if we want quality business profiles and journal entries posted to the Kiva website, then it is important that we fully explain to MFI staff why they are filling out this form in the first place. Though some have never used a camera before and many spend little or no time on the internet, all want to understand the concept of Kiva and where they fit into it. For me, working with the dedicated credit officers at both BRAC Tanzania and Vision Finance Company has been just as rewarding and informative as meeting with their clients.
Julie Ross is currently serving as a Kiva Fellow at Vision Finance Company in Rwanda. She recently completed her first placement with BRAC Tanzania.
7 comments 3 February 2009
Portrait of a Client
The noon-day heat of equatorial sun beat down on tin roofs and dirt roads. It was quiet, the sounds a little muffled outside the paint shop of Rwandese Kiva client Marie Chantal Mukasafali.
“The business is good here,” she says, “thank goodness our inventory doesn’t spoil.”
Marie Chantal, operator of this small enterprise for well over a decade, has kept her eyes open for opportunities. She chose to begin a paint shop, she says, because housing construction became a large market in the aftermath of the 1994 genocide in Rwanda, during which many buildings were appropriated or destroyed.
“I got the seed capital for my business by selling my former house.”
Today, Marie has bought another, larger house than the one she sold for her business, complete with a dining room and indoor plumbing.
Marie’s story is by no means an anomaly among the many Rwandan micro-finance borrowers funded by VFC. All around, the clients visited demonstrated keen business acumen, quick to take advantage of any opportunities they could find.
One farmer on the Rwandan-Congolese border-town of Gisenyi has taken advantage of his location to export tomatoes to Congolese merchants. A retail seller of clothes and shoes near Kigali treks to Kampala, Uganda (a nine-hour bus ride) instead of the nearby capitol to get cheaper goods to sell in his shop. An owner of a fabric store in the south of the country sells not only to her own neighborhood, but also across the border to land-locked Burundi.
Entrepreneurs who have some more savings plow their earnings back into the business, often with master strategies.
Small grocery shop owners invest in wholesale purchases of goods – beans, rice – during the harvest season, so that they can sell them for higher values during the later months. “This grain was 250 RwF per kilo when I bought them,” says shop-owner Yvette Mukamana. “Now they are 350.”
Irene Nsabyimana, a cook for a children’s school, has even invested money in school dormitories, so that more children can board at school and eat from her business.
This diversity of business strategies is no oddity. Many clients are involved in several businesses at once. For instance, one shop owner conducts buses in his off-hours. Another drives a motorcycle-taxi to make some extra money.
The work ethic encountered in the clients I have interviewed in the past few months is matched only with their generosity. A majority of families in Rwanda (almost all of the clients interviewed) are taking care of foster dependents. Many are teen-age orphans who lost their families in the 1994 Genocide.
“The vulnerable children come from so many places,” says John, my Kiva colleague here at VFC. “Some of them, their parents were killed. Others, the parents are in prison for what they did.” Then there are offspring born of rape. Families have taken in the children from all sides, as many as could be provided for, though the associated cost is often difficult.
“The school fees are very high,” says Marie Chantal.
But for the entrepreneurs, and the families they care for, Rwanda is a nation of hope and growth.
“I want to take English lessons,” says Claudette Nyiragicari, a fabric-store owner. Rwanda has just recently moved to eliminate French in favor of English in public schools. “And when can I get another loan? This loan was not enough.” She has already made enough money to pay off her current loan, months ahead of schedule. Gesturing to the bundle at her feet, she says, “I was only able to buy a few bundles of fabric.”
The call for financing is echoed all over the country. Many shared their future plans and hopes.
One convenience shop owner expressed her desire to start a hair-salon business. Another wants to start a wholesale trade, which offers better returns and faster turnover than retail.
Even John, Marie Chantal’s husband, shared his goals. “I’m going to driving school now, and want to buy a car for a taxi-service.”
Each in her own way, the clients interviewed in Rwanda are modestly working towards a better standard of life.
“I’m able to buy some more food for the kids,” says Domina Ngirimana, a mother of nine.
1 comment 19 November 2008
A long overdue staff introduction
Yes, as I am leaving. Julie Ross, the next Kiva Fellow to be placed in Rwanda, will take over with better and I’m sure more consistent postings here. But in the meantime, a quick note on some of the staff here at VFC, whom you will soon meet in more detail:
The Managing Director, Shem, is a genial and humorous man from Uganda. He is a new director here, having done previous work in other accounting and finance positions, including the largest microfinance institution in Uganda. He joined World Vision, the Christian international umbrella organization for Vision Finance Company, as Senior Financial Specialist in Africa, then moved to Rwanda to help with financial management. At the same time, the previous MD for VFC resigned, so Shem stepped in.
Antoinette is the head for administration and human resources here at VFC. She is a graduate of Butarye university, the nation’s best university in the south of the country. She studied public administration there, and joined World Vision right after college; she hopes in the next few years to start up a training center of her own. The target population is vulnerable orphans and widows – Antoinette hopes to teach them vocational skills they can put to use in making a living.
Patrick is the operations manager here at VFC. Having studied finance in university, he has been with World Vision for fourteen years – starting with a program for orphaned and vulnerable children. His involvement in this program led him to the calling of serving the poor and disadvantaged. True to nature, he can always be found with a smile on his face and a gleam in his eye.
Donat: the finance manager here at VFC. (The name does not derive from the sticky sweet, but rather the French for “Donate.”) Donat exudes energy at all hours, even late at night while slogging through paperwork generated by external auditors. “This was supposed to be over with last month!” he complains loudly, in good cheer.
Ben and Providence are the directors of the MIS (the computer record-keeping) department. Ben is technically above Providence in rank, but let’s not talk about these things over-much, as the two just got married in September. They get teased about this a respectable amount.
Jean-Paul is called the “baby brother” Kiva coordinator. But don’t let the name trick you. Jean-Paul is indispensable to the Kiva process. When loan officers come to the headquarters, bringing photographs, stories, repayments and journals, he is the one who single-handedly posts it all onto the Kiva website, producing the content you see today. Jean-Paul, as are several other members of Vision Finance staff, is still in university. He holds this full-time job during the day, so that he can finance his education; then he attends classes at night.
Then of course, there is John Gasangwa. John has been absolutely instrumental in helping with Kiva work in my time here. Responsible for all donor relations (and now, also duties as a loan officer), John was the one who accompanied all my visits out to the field, whether for training, journaling, or just plain travel. John is, of course, as loud, crazy, and energetic as befits his position. Born in Uganda in a refugee camp (his parents left the country in the 1959), he has since returned to Rwanda to “be a part of the solution,” as he puts it, with a hope to serve the disadvantaged in his country. Having graduated from Butarye with excellent marks, he aspires to go to business school in the states – but is certain, by all counts, that he will come back to Rwanda to help solve the challenges that the nation faces.
For more about the kind and wonderful and generous staff here at VFC, stay tuned for Julie! There is sure to be more to come.
Add comment 19 November 2008
News Flash
Earlier this month, the Rwandan government announced that French was no longer to be the official language of communication and teaching. Currently, French is used as the language of instruction in over 95% of schools; all of them must now switch to English. In addition to schools, government workers must be fluent in English. The agenda is effectively to phase out French in the country.
I heard this news, of course, with some astonishment. Were the teachers going to learn English overnight? What were the implications of switching languages for millions of Francophone employees and civil workers? For high school and college kids already dealing with quarter-life crises? My first inclination was to interpret the announcement as a sort of grand political gesticulation, not unlike a motion for certain wars. This I read as foolhardy: postcolonialism might be all the rage, but after all I haven’t heard of Mexico abolishing Spanish.
To my surprise, my colleagues and friends took this news with all due nonchalance. Oh that’s nice, they said – it was a move that neither surprised nor nonplussed any of them. As they explained to me, the change had been justified for two reasons:
As has been well documented, the first is political. The soured French-Rwandan relations after the 1994 genocide undeniably smolders in the background of the decision. A report this year from an official commission investigating the role of France in the Genocide alleged that the French provided weapons and support to Hutu-extremists behind the killings, and furthermore facilitated the escape of militants from the pursuit of justice. Rwanda has over the past decade made several motions to sever ties with France, including the shutdown of the French embassy and the French-Rwanda cultural exchange center in Kigali.
However, the main reason on record for the move (as stated by Industry and Trade Minister Vincent Karega) is business – English is, in his words, the “backbone for growth and development not only in the region but around the globe” – while French is, he dismisses, “spoken only in France, some parts of West Africa, and parts of Canada and Switzerland.” The business impetus became even more important in recent years, after Rwanda joined the English-speaking East African Community, consisting of Rwanda, Burundi, Uganda, Kenya, and Tanzania.
Admittedly, my indifferent colleagues say, the change will not be easy for many citizens of Rwanda. But they’re not concerned, quite simply, because for the majority of Rwandans neither French nor English is lingua franca; Kinyarwanda remains currency. As with many other matters, the shift mandated by top-level announcements does not reach very far below.
By some estimates, English is spoken by 3% of the population. French is spoken by around 8%. In the marketplaces and streets, transactions continue as usual; money and goods exchanged hands as they always have, in the vernacular. Here at VFC the loan officers looked at the headlines, shrugged, and saw little of relevance for the clients they serve.
1 comment 29 October 2008
To Begin
Mornings, always one rooster does not know the time of day. As is customary in the neighborhood, most chickens start calling between five and six – but renegade number one is early. 4:30, last time I checked.
To be sure, were it not for the roosters I am guaranteed to wake soon after. Shortly after six the children start to make pattering noises outside my door, as they run out to wash and brush and use the outhouse, and to heat the water kettle for the plastic basin in the washroom. There are four of them – aged 7, 7, 9, 12 – plus an assortment of relatives. School starts early in the neighborhood, and they must all start walking by seven.
These are the children of a colleague, with whom I have been staying since I arrived in Rwanda. Their neighborhood lies 10 kilometers outside Kigali, near the military camp. Rwanda being the land of the mille collines, the thousand hills, our house opens onto a road with a far view of the surrounding peaks and valleys, which in the mornings are liquid with fog. With the west wind and an uncertain sun in the banana leaves it is as beautiful as you can imagine.
My adoptive family is quite a well-off one – they have a car, a few servants, a house under renovation – by no means poor when compared to the 60% of the Rwandan population under poverty line. Simplistically, poverty line here goes by the dollar-a-day standard, which you can benchmark roughly to a liter of milk, two bottles of water, or a half-pound of passion fruit. Meals, then, are necessarily starchy in composition – boiled bananas, rice, beans, potatoes – limited meat.
When I have eaten breakfast, I walk down the dirt road towards the main intersection where a great number of people wait, on toe like a swarm of runners at the starting block. They must scramble to get onto a public taxi, one of the local mini-buses that shuttle between town and the local residences. I am of course no match – you will perhaps permit me the luxury of hiring a motorbike to work, which is too a means of public transport in these parts.
Yesterday my colleague Jean and I made our first expedition into the field, which has given me a new appreciation for dust. In the upcoming weeks we will be venturing further afield – so more to come.
–Kathy
1 comment 21 August 2008
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