Ugandan Update

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I thought I would provide an update on what I have been up to before I take off on my next adventure.

As I shared while in Uganda, the women had been saving money weekly to use to start small businesses to support themselves and their children. I was glad to see they were making such good progress toward their goal. But I also wanted them to get there faster.

When I returned from Uganda, I researched non profits that offer micro loans as an option for these women to get started quicker.

As I investigated, I found that even the biggest and well respected non profits can charge upwards of 20-25% interest rates for loans. While I imagine there are many reasons for this, I would never recommend that these ladies take on an interest rate that high.

That is when I started the idea of making my own organization that offers micro loans to these women, but at an affordable interest rate. When speaking with Irene and Hope we discussed grants, but agreed that a loan with a small interest rate is teaching another financial lesson.

I still have much to learn, but I wanted to start with a structure that made sense to us so we had somewhere to start, learn and perfect overtime.

So for now: women that are interested in a loan need to fulfill the following requirements before being considered:

1. They need to have completed a training program with RWO or come with established skills.

2. They need to have completed the financial literacy course that I created.

3. They need to have a clear business plan in writing.

4. And this is a big one: they need have skin in the game. The women must save 50% of their goal and the loan will cover the remaining 50%.



Because we cannot run credit checks for these loans, we require documentation of their savings to show their commitment to the program.

We decided to charge 3% interest. While this will be a loss based on the hyperinflation Uganda is experiencing, it allows us to setup an amortization chart, just like we would receive for a mortgage, and give the women a payment schedule.

The women are making weekly payments with the plan to pay their loan back within 6 months. The weekly payments gives us an opportunity to intervene sooner if the women miss a payment. We can learn the reason for the missed payment and work with the women to address the issue.

While one is goal is to have the women pay back their loan, the ultimate goal is to have thriving businesses. This allows them to support themselves, educate their children, and only enter into positive consenting relationship.

I am paying RWO a monthly fee to be the boots on the ground. RWO is making visits to the women's businesses, collecting the loan payments, and keeping a close relationship with the women. While it is not only more economical to have RWO do this work, it is also invaluable to have their knowledge of their own economy and the relationships. The only collateral we have with the women is their reputation and their standing in their community.

To date, I have 5 loans out and 3 more than I am reviewing!

Of these 5 loans the smallest loans was $65USD for a young woman to start a tailoring shop. The largest loan was $250USD for a woman with an established shop to stock up on inventory before the busy holiday season. The other three loans are: one mobile salon and two women who are selling second hand clothes. As many of you know, when clothes do not sell at a thrift store in the US, we will bail them up and ship them overseas. The women can buy a bail of clothes for pennies on the dollar. They then go through the clothes to find the items they think they can sell. One woman has a permanent store front and the other is going to move around.

We offered the women a 3 month grace period to get their businesses up and running before starting to make their payments back. But, all 5 women are anxious to fulfill on their commitment to repay the loan and will start making payments in November (which is only 3/4 weeks in).

I am excited to expand this program not only in Uganda, but also in other developmenting countries that could benefit from similar opportunities.

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