Lendwithcare microloans making big differences in Togo, West Africa

A couple of weeks ago, Ajaz (Lendwithcare's Microfinance Advisor) and I headed out to Togo and Benin in West Africa to conduct the annual evaluation of our microfinance partners. Whilst there we also met some of the entrepreneurs receiving Lendwithcare loans.

 - Nancy Thomas, Lendwithcare Executive

 

If you follow the debate on the impact of microfinance, you will be aware that one of the criticisms often put to microfinance practitioners is that microcredit only serves to support subsistence and/or unscaleable businesses. However the following two entrepreneurs I met on our recent visit to Togo showed me quite the contrary.

Meet Philippe Adanglo ...

Philippe in his workshop 

When we visited Philippe’s shop/training school on a hot and dusty day in February, it was an absolute hive of activity. In the main portion of his workshop, 15 young apprentices sat busily working away on clothes orders. Philippe currently owns six manual sewing machines (one of which he bought with a small loan funded by Lendwithcare lenders) so those who were not operating the sewing machines, assisted by tacking and preparing the material for sewing. At the side of his workshop, in an extended area, we were introduced to another 15 apprentices who were gluing, ironing and putting finishing touches to various items. 

Philippe welcomed us in with a big smile and open arms. We did not realise from his modest loan request quite how impressive his business actually was. He set-up his own tailoring business with three helpers about 14 years ago after learning the trade from his uncle and receiving a diploma as an apprentice. He now, with the help of 35 local apprentices, makes 100s of uniforms for schools and companies as well as the occasional bespoke item. And all of this on manual sewing machines! Philippe told us that he and his staff meet their current demand comfortably and he is planning on expanding operations in the near future. In fact, in the shorter term Philippe has plans to open a haberdashery next to his workshop so he can sell cloth and accessories alongside his tailoring services. 

Apart from building a successful business, what really impressed us about Philippe was the opportunity his business now provided for numerous young people from the local area through his apprenticeship programme. In total he has trained 80 people in the trade, all of whom received a diploma and graduation ceremony once they completed their apprenticeship and most of whom have gone on to set-up their own businesses. Philippe trains all of the apprentices himself and is helped by his more experienced apprentices as new people join. Philippe has now taken out a second small loan to buy more material in bulk so they can meet the growing demand of their customers and get a better price by buying in bulk.

Philippe & apprentices

And Akuwa Keke ...

Akuwa and I (Nancy)

We met Akuwa the day after we visited Philippe's tailoring shop and were very impressed by her obvious entrepreneurial skill and spirit. After her husband died ten years ago Akuwa knew she needed to find a way to adequately meet the needs of her two daughters so she started to consider different income-generating activities. She used to sell porridge from a stall on the street but this did not provide her with a sufficient or stable income so, with encouragement from her sister, Akuwa slowly started to expand and diversify her trade. She now buys a variety of goods from the port and grand market in Lome (the Togolese capital) in bulk and then sells them at retail to people in the local vicinity. These goods range from colourful cloth and children’s toys to furniture and pianos. Akuwa visits the port and sees what is being imported and which items she thinks will sell well in the area where she lives and buys these items in bulk. Akuwa told us the goods she sells come from all over the world, particularly China. 

And Akuwa's business ideas do not stop there. In addition to selling these goods, Akuwa also grinds corn to make a type of powder popularly used to make soup. She exports large bags of this corn powder via middlemen at the port to Europe and other parts of the world. Akuwa hires three people to help her with this activity since it can be a laborious task preparing the corn into the powder. The list of activities Akuwa is engaged in is extensive and before we were about to leave she also wanted us to try some of the frozen yoghurt she makes and sells on the street to passersby. She sells these for 2 cents a bag and they are delicious!

Ladies grinding corn at Akuwa's home

 
It was an absolute delight to meet both Philippe and Akuwa (and the 13 other lendwithcare entrepreneurs who welcomed us into their homes and their businesses) during our trip and although I am not suggesting these two examples represent all recipients of microcredit, I do think it extremely important we avoid viewing microcredit and all its recipients homogeneously. 

To learn more about lendwithcare entrepreneurs visit our website www.lendwithcare.org or follow us on Twitter or Facebook for latest news and discussion.

Video updates from Togo part three: “A small loan is like oil in an engine; it allows people to move forward"

Finally, part three of Tracey's video updates from her April 2013 trip to Togo is here! Here are also parts one and two for some context.

To round off my blog/video updates from Togo, I wanted to share with you some lasting impressions from the trip.

The passion and commitment of the WAGES staff

Many of the office staff began their careers as Loan Officers, including the General Manager, Ramanou Nassirou who, when talking about the entrepreneurs said “most of them know how to run their business, we just provide them with a small loan to get them started - a small and affordable loan is like oil in a car engine; it allows people to move forward". 

I have already written about how WAGES supported clients who lost everything in the massive fireswhich swept through the great markets of Lomé and Kara last year and this demonstrates further the commitment that WAGES have to improving the lives of their clients. 

The importance of a good loan officer

 A good loan officer will take time out of their incredibly busy work schedules to support entrepreneurs beyond simply disbursing loans and collecting repayments. This makes a huge impact on the lives and successes of the people they serve and their businesses  and I saw it time and time again with the WAGES' staff.

Yaya’s story: Yaya was one of the very first entrepreneurs to receive funding from Lendwithcare back in 2010.  Yaya told me there has been a big difference between before the loans and now.  He is able to send his children to school, they eat three meals a day and his business has ensured the health of his family. Recently one of his children was sick but he was able to afford to pay the hospital fees – something he’s sure he wouldn’t have been able to do before.

What access to finance really means

Access to financial services such as loans and savings accounts are absolutely vital to people who would otherwise never be able to move their business beyond the most basic hand to mouth existence. 

Assiahame’s story: I met Assiahame at her small hairdressing salon in a side street of Atakpamé.  She told me that her salon alone didn’t have enough regular customers, so her loan enabled her to diversify into selling jewellery, bags as well as hair pieces. Before finding out about WAGES she had previously used a money-lender who charged her 50% interest on her loan and used to hassle her for the repayments.

And that like any small business, there are many challenges and although access to credit helps lessen the burden, it is not always enough ...

The need to diversify when things get tough

William’s story: I had met William a year ago and was struck by how important he is to his village, near the town of Atakpamé.  Not only is William a fisherman employing twelve people in the village, he is also the local Pastor.  This year when I met William he was starting to diversify his income sources as it is becoming harder and harder to make a living from fishing.  He told me that fishing was only good for three months of the year and it was becoming increasingly difficult to make that income last.  As is typical of men like William, rather than just accepting the situation he was thinking of other ways in which he could earn a living.  He had just started a very small business, selling musical instruments and has now taken a loan so he can grow this business.

I hope you have enjoyed this small window into the lives of some of the entrepreneurs featured on lendwithcare.org.  I really enjoyed meeting them and hearing their stories.

Finally, I would like to thank everyone who made my time in Togo so enjoyable and rewarding, especially Felix Kilinglo and the Loan Officers from the Atakpamé branch; Forgive, Lolonyo, Sylvain, Success, Dodji, Emmanuel and Esso and Mensah Dakevi, the WAGES lendwithcare officer and Sambieni Yarikoi who accompanied me for all my time in Togo and were the perfect example of the warmth and hospitality of Togolese people.

Tracey Horner, Head of Lendwithcare

  

Role of Credit Score While Acquiring Disability Loans!

The department of social security provides some monthly income to the disable people so that they can live their life without facing any ado. Physical as well as mental disability makes people helpless and doesn’t allow them to work and earn that is why DSS provides them small income. But sometimes these incomes are not enough to meet some urgent needs. At that point of time disability loans provides them the most needed helping hand to meet their requirements with ease. 

There are many specialized lenders available in the offline and online market that consider disable people as a potential borrower because they get the stable source of income via disability benefits. The amount and term of these finances are determined on the basis of benefits obtain by the applicant from DSS but its approval is strictly depends on their credit score. It means loan seekers need to have good credit rating to qualify for these financial services.

Credit rating of the individual plays a vital role in acquiring these finances because lenders offer these loans with jobless status and without taking any collateral. The interest charges also depend on the credit worthiness of the borrower as lender offer low rate to high rating holder and high rate deals to low credit scorers. That is why, it is important that one must improve his/her credit rating before applying these cash assistance.

Steps That Helps In Improving Credit Rating:

• Get The Copy Of Your Credit Report And Rectify Errors:-

The first step towards improving your credit rating is to get the copy of your credit report and check its accuracy. You must request your credit report from all the three major credit bureaus to analyze and mark the errors, if any. Rectifying the errors and updating your information helps in boosting your credit score easily without facing any difficulty.
 

• Pay Your Utility Bills And Credit Card Payments On Time:-

Paying your bills on time helps you in improving your credit rating. Every timely payment puts a positive effect on your credit rating and gives a good payment history. Do keep in mind that missing or delaying single payment can decrease your score which is not good for your report.

• Settle Your Existing Debts, If Any

Unpaid debts can damage your credit rating very badly so if you have any then try to settle them as soon as possible. Paying back the existing debts helps you a lot in improving your credit rating and achieving the necessary score to get the new loan easily at low rates.

Visit the website at www.disabilityloans.net/disability-loans.html and get further details about these online cash help for disabled.

"Liberation loans" offered by our partner in Pakistan to free poor people from spiralling debt

After the 2014 Oscars ceremony, Steve McQueen's film “12 Years A Slave” deservedly took home the big prize of best picture. However, it is important to remind ourselves that the barbaric practice of slavery is not something we can consign to the history books. It is still a contemporary issue in many countries around the world.

The epic 1957 Bollywood film ‘Mother India’ movingly portrays the story of a family struggling to survive against the machinations of a local moneylender. Many decades later this is still one of the rare examples of Indian cinema vividly reflecting the reality faced by millions on the Indian sub-continent, and instances of local moneylenders charging usurious rates of interest remain as prevalent as ever throughout much of South Asia.

As well as providing loans to people wanting to establish or develop their microenterprises, lendwithcare’s partner in Pakistan, Akhuwat, provides ‘liberation loans’ to people who are struggling to repay debt that has been taken from local moneylenders. In most instances, borrowers took out small loans at interest rates of up to 20% per month and the debt has spiralled out of control. Sometimes borrowers have already sold what few assets they own, yet still struggle to keep up with repayments. Shahzad Akram, Akhuwat’s Chief Credit Officer, recalls instances where young borrowers have even committed suicide and some moneylenders demanded that borrowers sell their daughters to repay the debt. In parts of southern Punjab and Sindh it is not uncommon to find borrowers and their children who have been forced to become indentured labourers for feudal landlords as they struggle to repay debts that were often taken out many years ago.

Akhuwat calls them liberation loans because they free the borrower from the seemingly never-ending cycle of increasing debt. Each request is carefully considered on an individual basis to ensure that the application is genuine. There is a maximum loan size of 100,000 rupees or about $1000, although most loans are smaller, typically around 35,000 rupees or $350. Akhuwat does not charge any interest and borrowers are asked to simply repay the loan in monthly instalments over a period of up to 18 months. Each year Akhuwat makes several thousand liberation loans to clear the debts of heavily indebted borrowers.

Rather than providing the borrower with the cash, Akhuwat instead directly repays the whole amount owing to the moneylender in the presence of the borrower and often other witnesses as well. It then asks the moneylender to sign a contract stating that loan has been settled in full and that he/she will not demand anything further from the borrower. The organisation also educates borrowers on the dangers associated with taking out short-term high interest loans to ensure that they do not fall into the same debt traps again.

[The first example of a liberation loan to be uploaded on lendwithcare can be found here. Ilyas Maseeh found himself in spiralling debt after one of his relatives got him involved in a court case. He took out a loan from a private money lender who imposed harsh conditions on this loan. Akhuwat is now helping him clear his debt and resume a normal life.]

Akhuwat, which was established in 2001 by Dr Amjad Saqib, has grown quickly to become one of the largest specialist providers of microloans in Pakistan – it now has almost two hundred thousand active clients, including many non-Muslims, served by more than 250 branches located throughout the country. Akhuwat provides interest free, referred to as Qard Hasan, loans to the working poor. Qard Hasan loans are promoted in Islamic teachings as one of the mechanisms to assist poor people; indeed they are preferred to providing the poor with outright charity. With an average loan size the equivalent of just US$144, Akhuwat lends to some of the poorest people in Pakistan without any formal collateral and has a remarkable on-time repayment rate of 99.83%.

By Dr. Ajaz Ahmed Khan

Lendwithcare in the Philippines | Stories from survivors of Typhoon Haiyan

Tracey Horner, Head of Lendwithcare, has spent the last 14 days visiting lendwithcare entrepreneurs in typhoon-affected areas of the Philippines. Below she retells the stories of just some of the entrepreneurs she met ...

Lendwithcare entrepreneur, Anecito Rivera, before Typhoon Haiyan

Two days ago I met a widow called Generosa Pantuan who has six boys aged between sixteen and thirty three, she also has five grandchildren.  Her business is selling ready to wear clothes. Her house was destroyed by the typhoon.  Her son reconstructed the shelter above her business with tin sheeting donated by an NGO, however it is was not enough to repair the house as well.  The typhoon destroyed all her stock of clothes, luckily she has been able to buy new stock on a sale or return basis.  The savings she had built up with FCCT helped her a little.

Generosa lives with one of her sons and his wife who fish and then cook and sell the fish. The fish she was cooking when we arrived is called Kitong and is one of the tastiest fish I have ever eaten. She insisted on giving me some, I pointed out that she needed it more than me but she was insistent and it would have offended her to refuse – we had the fish at dinner that night and it was delicious – this really sums up the Filipino spirit. The family fishing boat was partially destroyed by falling debris during the typhoon, they have mended part if it but don’t have the money to repair it properly, making fishing too dangerous in the boat right now.

Generosa at work before Typhoon Haiyan

Since the family house was destroyed they have converted a pig pen into a temporary shelter. I saw that there were many holes in the roof that had been patched with bits of plastic sheeting. They hope and wait for more relief.  Proper shelter is their biggest problem. They hear a rumour that they might get some galvanised iron sheeting but haven’t heard anything yet and are waiting patiently.  They did get some rice, sardines and noodles as relief supplies in the early days.

Next I met Anecito Rivera, he has four children, all boys aged between 11 – 17.  They all live here in one room house.  Anecito can only afford to send one child to school.  Although there is a government school with free tuition, you have to pay for books and uniforms and other extras which makes it unaffordable for lots of poor families.

Anecito is a fruit and vegetable vendor. He used to buy and sell in the local market but his entire stock was lost during the typhoon and he can’t afford to buy more.  Right now he is reliant on the income his wife brings in from her job at a drug store.

I had been asking everyone I met “tell me how Yolanda has affected you” and Anecito simply replied “Yolanda had a big impact on me – so badly affected I can’t explain.”  He has a small plot of land by his house where he plants crops and he had a mango tree which was bearing fruit. He told me that when he saw his mango tree was ruined by Yolanda he cried.

He has recently re-planted some crops of banana, sweet potato, and papaya. He hopes to harvest and sell these at the local market in the future.  The banana crops will take one and a half years to fruit but the others can be harvested in four months.

When I asked him how he felt about the future he said that he never loses hope and has optimism that he will be able to revive his businesses.  He will take out one of FCCT’s restoration loans soon to revitalise his business and do some repairs to his house.  Like the others he received some food aid and he also received some tarpaulin like material. 

For more updates from the Philippines stay tuned to the lendwithcare blog and our Facebook and Twitter pages.

Make a loan to a small business owner today and help them and their families find a sustainable route out of poverty - www.lendwithcare.org  

More from Lendwithcare in the Philippines | The impact of Typhoon Haiyan

Day 12 and Tracey retells the stories of the Lendwithcare entrepreneurs she has met whilst in the Philippines ...

I had to accept that we were not going to get to Leyte or any of the other worst affected islands due to the bad weather. There has been an area of low pressure over the Philippines for the last couple of weeks which has been causing constant rain and high winds and severe flooding in some areas. 

CARE/Peter Caton

Instead we decided to travel four hours north of Cebu city to meet with one of Lendwithcare’s partners, a Co-operative called FCCT. FCCT have many branches, including two in the north of Cebu which was affected by typhoon Yolanda, as it is known here (if you say typhoon Haiyan people look at you blankly). 

Tracey's original route

First I met with the staff of FCCT who explained all the services they offer to their members, including loans. You can tell from their motto “only having savings breaks the bonds of poverty” that they strongly believe in encouraging their members to save. In fact, they even have a “kiddies savings plan” where children, from the moment they start school to when they finish year six, can save a third of any allowance they get from their parents. When these mini-savers graduate junior school they can withdraw their savings to spend on a graduation dress or new shoes. The interest rate they receive is 5% - I could only dream of finding a savings account that pays that much to my own son in a children’s account in the UK. FFCT also offer a good rate of savings to adults which they pay from the interest they charge on loans. 

Loan repayments are collected by staff every week – they go and visit the borrower to avoid them having to interrupt their business to travel to the office to make their loan repayments. Any profit FCCT makes is returned to their members at the end of the year. As well as savings and loans, FCCT offer mobile money transfer services. 

By the time I finished hearing about FCCT’s services it was the end of a very long day. We had dinner with the FCCT staff and they told me how terrifying it was to be in the middle of such a “super typhoon”. Luckily typhoon Yolanda hit during the day which meant that a lot of people had time to get to an evacuation centre (which in practice are schools or churches). They all said it was the most terrifying experience of their lives and most of the staff had experienced around 70% damage to their own homes. They told me this in a very matter of fact way. Apparently the Philippines experiences an average of 20 typhoons a year so they hadn’t realised quite how bad this one was going to be. After a night in a simple guest house, we breakfasted on the tastiest fried eggs on toast I have ever had – I wish I knew how the chef, who was a member of FCCT, had made them so delicious. We then left the FCCT office to meet some of their members who had been affected by the typhoon. 

First I met Melbina Tuico who has four children. She runs a food stall and as a side line rents DVDs to provide an additional source of income for her family. Both her business and home were completely destroyed during the typhoon. But she needs to feed her family and send kids to school so Melbina immediately moved her business next door to an area outside her sister in law’s house, which is manageable in the short-term. She said that business has been OK since the typhoon since people still come to eat. She provides breakfast lunch and dinner, her customers are neighbours but also people from other villages since she prepares such delicious BBQ food. 

When I asked her about the future she replied “only god knows my future”. She is hoping and praying that someone will help her rebuild her house and restaurant area again. Shelter is her main problem as they are now all sharing her sister in law’s house. The children keep asking when they can go back to their own home. Melbina and her family received some relief goods from humanitarian organisations working in Cebu but she has not been able to get any construction materials. She said she can’t focus on her business properly while she is worrying about whether her house will be rebuilt. I wished her good luck, not knowing quite what could be done for her in the short term. CARE and other relief agencies, who have specialised expertise in emergency shelter relief, are rightly focusing on the most vulnerable who don’t have anywhere else to go. 

However it is very likely that FCCT will offer her what they call a “rehabilitation loan”, which will be on a deferred repayment basis and at a very low interest rate. I asked them to send me details as soon as possible so that we can put it on the lendwithcare as I know our lenders will want to help. 

Stay tuned for more stories from the Philippines here and on our Facebook and Twitter pages.

Make a loan to an entrepreneur trying to build a stable future for themselves and their families today by visiting lendwithcare.org 

Day 8: "How is the Philippines coping after [Typhoon] Haiyan?"

Tracey Horner, Head of Lendwithcare, is still battling the elements in the Visayas (the Philippines) to find out more about the impact of Typhoon Haiyan on local businesses and livelihoods.

Most typhoon affected said they were just thankful they still had their loved ones. Feel inspired by their courage.
— Tracey (@traceymohabir) January 17, 2014

CARE-ACCORD distribution of household items in Ormoc

Tracey's journey that had included a visit to one of the worst affected areas of Typhoon Haiyan - Tacloban - has been less than smooth

Tried to get to most affected island ,Leyte but bad weather forced the ferry to do a u turn. Now on way to visit LWC partner in Cebu.
— Tracey (@traceymohabir) January 16, 2014

Very lucky I don't get sea sick as the abandoned ferry crossing was very rough. Unlikely to get to Tacloban, v disappointed.
— Tracey (@traceymohabir) January 16, 2014

But she has managed to meet a number of lendwithcare entrepreneurs on the island of Cebu and learnt a lot about how businesses and families have coped in the aftermath of the strongest typhoon to ever hit landfall and how our local partner, SEEDFINANCE, is helping communities get back on their feet

Post by lendwithcare.org.

Post by lendwithcare.org.