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This is a report based on the first part of the loan funds that was sent through to Peter and Violet Erima in Tororo, Uganda in 2023. This partnership started in 2023 but there is a long history between BHW and Peter and Violet over many years, going back to 2002.
The partnership formally started in 2023 after we met again with Peter and Violet in Jinja, Uganda at the Foundations for Farming Conference in October 2022. The initial funding for the partnership was US$4,000 with further annual allocations of $4,000 to be sent in 2024 and 2025.
Faith Harvest Ministries presently has 20 churches scattered throughout the Tororo, Bugiri, Busia and Namayingo (near the lake) Districts. There are loan groups in each of these churches that were started before any funding was sent by Bright Hope World. Each one of these groups is what is known as a savings and loan group. Almost all of the people receiving loans are involved in small scale agriculture. They are subsistence farming and are very weather and circumstance dependent. However, Peter has indicated that the loan beneficiaries are faithful and are continuing to make payments.
Bright Hope World sent US$4,000 in March 2023. That funding was allocated between 27 people in three different churches. The loan groups in those churches had received what I understand to be additional training in savings, loans and business. Peter and his wife Violet do the training, Violet has a significant degree of experience in business training in management.
All loan beneficiaries were subsistence living and the funds that were sent gave a boost to what was already being done.
Each group has a leader, a secretary, and a mobilizer. The mobilizer is the one who is “out in the field” meeting with, encouraging and helping the beneficiaries, and ensuring that repayments are made. The loan beneficiaries meet monthly. This applies to all of the loan groups, regardless of whether they have received a boost from BHW.
Here are the basic details of the loans:
1) Loan sizes range between UGX 600,000 (US$154) and UGX 1,000,000 (US$257). However, when the next lot of loans go out after the further funds are sent, the maximum size of loan will be UGX 600,000 and kept at that. Peter did discuss that there are significant challenges and increased costs which meant that it was difficult to limit the initial loan size to, say, 300,000 UGX. The interest rate is presently 1% per month. I pointed out that I thought this was not adequate to match inflation in Uganda, although I understand now that inflation is a very modest 4.6%. I indicated that I thought the loans should have an interest of 2% per month. This would grow the loan pot.
2) Peter asked for an allocation of funds to cover administration costs. He indicated that all of the money, except for stationery costs, was allocated to beneficiaries. He would like there to be an allowance of an additional $400 for administration of the programme. By way of example, he pointed out that if loan beneficiaries repay their loans using the mobile money system there is a commission charged of approximately 1.5%. There are also other administrative costs relating to meetings and stationery etc which seem reasonable to be covered, particularly when all of the original budgeted $4,000 per annum is going to loan beneficiaries who appear to have been well prepared to borrow. I would recommend increasing the payments to $4,400. Full records are kept of each loan by the group leader and secretary of each group.
3) I asked Peter if there were any other needs. He indicated that it would be helpful if there was a laptop for this programme. This may be something that I could look at taking to him if I get there later on this year. I would certainly be looking to meet with him in Tororo and meet one of the loan groups at least to see how the record keeping is going.
There are three other churches with groups in them that have been trained and are standing ready to receive the next $4,000. As further payments are sent the number of churches with boosts to the loan groups (which already exist) will increase. We are adding to something which is already happening and assisting them to grow and stabilise.
I asked Peter what his 3-to-5 year plan would be. He indicated that in 5 years they would like to have benefited more than 500 people through the loan programme. This seems very realistic and achievable here.
There are difficulties at times with payments although Peter indicated that they were not significant. Some loan beneficiaries are, at times, not able to pay. This is exactly what you would expect when they are farmers and are seasonal and weather dependent. Loan beneficiaries ask for additional time to pay but he did not indicate that loan defaults were a big problem. The beneficiaries make the nonpayment up later.
I have to say that I enjoyed the discussion with Peter. He is a very straightforward person to discuss matters with and gave me very clear and helpful information. I detected no problems whatsoever with this programme and was surprised at how readily he was able to provide appropriate information. He was very grateful for the support received from BHW and is looking forward to expanding their influence. The loan programme certainly seemed to be a very important part of his strategy.