Follow up: Problems that the women face to repay the loans

Having access to a microcredit implies also the responsibility of being able to repay it back. Not all the women are able to make the correct repayments due to a lot of different circumstances, like diseases or problems related to the weather, for example. This week we focused on the follow up process, and therefore visited some women that were not able to perform well their business and because of that have not been able to fulfill the repayments. Some of them require an advise from the field officer that is in charge of them, while other just need more time.


Rose Jackson lives in Mtongani and is a second credit beneficiary. She has three children: the eldest, a very young girl of about 17 or 18 years old who is expecting a baby, and two twins who are five months old. Her husband died suddenly last spring and she had to take care of all the family. She used to break stone at the quarry, but she had to give it up because now she has two very little babies to take care of and one of them is sick.

All these problems didn’t allow her to repay weekly the agreed amount of 23.000 shillings. The field officer that went with us to make the visit listened to her problems, understood the situation and encouraged her to go on with her business and pay back the money whenever she cans: “When you have 10.000 tsh, you can bring them; if other week you earn less, for example 2.000 tsh, you can repay that amount as well”. It is the only way she can detain the debt from increasing.


 We then moved on to Kunduchi Pwani, where we would meet the rest of the women. When we arrived to the first house, the beneficiary that we were supposed to meet wasn’t there, so we walked some streets further and found her in another house. Fatouma, a second credit beneficiary as well, cooks samaki (fish in Swahili) in her house, but today she is not working. She tell us that it is not a good season for the fishermen, that are the ones who sell the fish in the district, and that she´s not feeling well today either. Almost all of the women who are dedicated to cook fish in Kunduchi Pwani explain us that they depend too heavily on fishermen for their business, and that now it is not a good moment for fishing.


The field officer that goes with us, Haika, proposes her to start a new business so that she can earn money and be able to repay the debt, and she says that she is thinking about buying dela (a typical local clothe) and selling it among her neighbours, house by house. Fatouma assures that the little amount of money that she has earn in the last days has been invested to pay the house’s expenses, as well as to buy food for her family, and that she has saved a little part to repay the loan. Our colleague tells her that it is a good idea to think about undertaking a new business and repaying the loan little by little.


We then approach the part of the neighborhood located in front of the beach in order to find Mwambua Rajabu, who is sitting next to another neighbor. She is a third microcredit beneficiary, and usually cooks chapati and fish, but now she can not do much: the fact that there is not enough fish does not even attract fishermen to eat her food, and these are her main customers. She has a debt of 20,000 shillings, and assures that she may be able to return it back this week, because she is participating in a community group of loans where money is lent to her. These groups of people, known in Tanzania as “saccos”, help each other by putting money into a pot weekly, and this money is used by a different person each week, depending on the needs. It is really curious how microloans are distributed and used individually, but debts are shared.


The last woman that we visit feels sick, and therefore is lying in the entrance of her house. She tells us that although she promised to repay her debt today, she felt ill and had to invest the money in medicines.

In microfinance projects, not all the stories are successful stories, because although women make an effort to go ahead with their business and to make them profitable, unexpected problems, such as illnesses, can appear, and have an influence in their repayment capacity. And of course, in their quality of life, which is a priority for everyone all around the world.


Giving out the microcredits

The delivery of microcredits to women who have shown to make good use of them is subject, first, to the availability of credit that the foundation has. Being an entity that depends on private donors for its operation means that it is not always possible to make a periodic payment of the loans. In addition, due to the large number of beneficiaries who reach the foundation, it is necessary to make a selection of the women that must receive the microcredits according to different aspects, especially the proper repayment of the loans as well as the achievements in their businesses.


It’s a Thursday morning and the office is full of women sitting on chairs that have been distributed by our colleagues around the main room. It is then also when some of them prepare the sheets for each of them, that are constantly renewed with photos and data that change in every release of a new microcredit. Others are in charge of the money and put it into envelopes with different amounts, depending on the loan each woman is about to receive. The first microcredit is of 300,000 Tanzanian shillings (about 150 euros), the second one 450,000, the third and fourth 750,000 and 900,000, respectively. The repayment that the women need to make is weekly, and begins two weeks after receiving the money. The interest rate is paid back with the same regularity, and it is of 20%, the lowest percentage legally accepted.


When everything is ready, the women begin to move to a separate room in order of arrival, regardless of the credit they will receive. The process, which is carried out with five different groups, will be repeated with all of them. Our colleagues welcome the  women and invest much time, as it is tradition in the Swahili culture, in greetings. Then a colleague explains the process of obtaining a new microcredit and reads the contract for them, which is the same for all of them. Once all of them have understood it, a speech is given out. Here, women are warned that the money should be properly invested. This means that money should be used to improve their business and not for another type of needs, because if the business runs well they would be able to cover other needs.


All of them accept the conditions and are aware what the loan must be invested in. Then, an exchange of proposals takes place, and it is then when the women express those improvements and changes that they believe the foundation could make. Some of them confess that Tevi is one of the best organizations focused on microcredits, while others ask for more time to repay the money, and some of them propose monthly loans instead of weekly.


After the chat, it’s time to hand out the envelopes with the money and to sign the contract and a receipt with a copy for both parties.


Each woman opens her envelop and counts the money to check that it is correct. Once these procedures are over, a date for the first repayment is set: two weeks are given to fulfill it.


Before leaving the office, the book of records is given to them , where loans and repayments have been updated.

The process to obtain a microcredit

Women know about the existence of microcredit financing mainly thanks to other beneficiaries that often live in the same neighborhood. Those interested in having acess to a microcredit should meet other four women interested in order to form groups of five and register to apply for a loan. This is a strategy designed by the foundation to secure the repayment of the credits: if there are problems, they can help one each other. Also, because it is a way of counting with the pressure that the rest of the group can apply. The main requirement is that these women live in the same area and know each other, as well as their business.

Once registered, a field officer of the organization goes to their neighborhood to see how they live and how they run their business. It is in that moment when the first interview is done, based on a standard questionnaire. Women are asked about their lives in general: how many people depend on them, who else contributes to the family economy, what kind of business they conduct or plan to start running, their level of education… With all this information, an assessment of their capital need is made.

One or two weeks after the first interview, another field officer repeats the visit in order to check the answers that the group of women had given, evaluating if they were enough sincere. It is then when the officer decides if the microcredit is granted or not.

Once granted, microcredit repayments are returned on a weekly basis, and must be registered in a book that the foundation gives to the women, which must be constantly updated.


Sometimes loans are denied because there is some irregularity in the initial questionnaire, or some kind of relationship among the women is found. Women from the same group are not allowed to be relatives, because if there is an economic problem in the family, all of them would have problems to make the repayment.

This is a short summary of the procedure followed to get the first microcredit . This week we went to see which are the steps followed to get a second loan. The first thing is a visit of the field officer, that goes to the beneficiaries’ home or business to speak with them about the evolution of their investment. Four main questions are made: how the first credit has influenced their lives, if then women have faced problems to return the money, how is the business running and what they intend to do with the next loan.

These are the stories of three of those women who will be able to access a second microcredit because they are running their businesses really well and are able of making  weekly repayments properly.

Mudanaibi Mameno lives in Bondeni, where she runs a guengue , a street stall where she sells vegetables. The first microcredit allowed her to improve the revenue of her business, as well as to start a new one based on selling kitengue, dela, and other local clothes, by cash or by credit. Now, she no longer sells vegetables , because it is not a business as profitable as the clothes. With the next loan, she intends to rent a room to sell different types of clothing, instead of visiting her neighbors’ house.


In the same neighborhood, we also visited Rose Penti, who has always been dedicated to growing and selling her own vegetables. With the first loan she was able of increasing her  business because it allowed her to buy more fertilizer, which means to extend the crops, both in quantity and diversity. Furthermore, she also began selling granulated soap in the evenings. With the second microcredit she plans to buy more fertilizer and increase the sales, as well as to improve her way of life by building a new home for herself and her five children.


We take a dala dala to Mtongani, where Mary Andrea Shirima receives us in her shoe store, located in one of the streets that has access to the soko, or local market. Mary has always sold shoes: she first sold plastic shoes (or yebo yebo), but credit allowed to enlarge the store where she sells, as well as to start selling rubber shoes. If she has access to a new microcredit, she wants to continue making bigger her business, which means also to increase her quality of life.


Knowing the local food through the women

Today we want to tell you the stories of four entrepreneurs who have opted for cooking as a strategy to make a living. Due to their limited resources, they decided to apply for a microcredit in order to start with their business. Today most of them are second or third microcredit beneficiaries, and have become a reference in the communitarian kitchen.


Theodora lives in Bahari Beach with her brother and two other people . Some time ago, she used to work as a farmer for the government in another region of Tanzania, but the government decided to fire her together with many workers,  and therefore she got unemployed . Soon after, a government measure allowed the workers with secondary studies to go back to the countryside to work.  She was one of them, but did not appear in the list that was published, so if she wanted to work she would not receive any salary. It was then when she decided to moved to Dar es Salaam to start her own business. She requested a microcredit and started to run a little food stall in the front part of the house where she lives, serving breakfast and lunch. She tells us that now she is becoming very well known in the area because of the food she cooks. She offers us a pair of mandazi, a kind of sweet rolls that she prepares for breakfast. After trying them, we can ensure they are delicious.


Later we moved to Silver Sands,  the neighborhood where Sabina and Christina live. The first one sells chicken pieces to her neighbors , while Christina runs a terrace where she cooks traditional food: rice and ugali , a flour paste that is eaten with vegetables in sauce and meat or fish. She’s done so well with her business, that she has been able to hire an employee who helps in the kitchen. Now she plans to expand her business selling drinks .


The last of our cookers lives in  Kunduchi Pwani, a poor neighborhood also located in the north of Dar es Salaam. When we arrive , we find Mwanahabibi grinding ilik seeds to prepare one of the juices that she sells in her small shop. Grinding the seeds is a job that requires persistence and time, and that is why she tells us that some days while she prepares juices , her son helps out with the store. Her business has gone well , and that has allowed her to buy a land to farm, from where she gets other products such as banana and kasaba, two products  widely consumed in the country.


Meeting the women at Mtongani

Before coming here, trying to imagine how our work would be was really difficult. Mainly, because everything would depend on how we would manage with the women beneficiaries of microcredits, that are the main reason of our project. After nearly two weeks of preparations, last Friday was the day: we met them. We arrived at the office and some of our colleagues from Tevi were already waiting for us. We then caught a Dala-Dala (local bus) and traveled for about 20 minutes until we reached Mtongani, a little quartier in Dar es Salaam’s surrounding where many beneficiaries live. There, 5 women were waiting for us in order to let us know their stories.


Maria was the first of them. She received us at her home, and kindly told us about her story. She was a beneficiary of a second microcredit, and was managing to sell clothes among her neighbors: kitengue, kanga and dela, which are local clothing full of color and really typical. She was thinking about starting a new business with charcoal, but was really happy with her actual life: she knew really well her clients and was being very successful.


We then moved on to meet Somoe, a really exemplary woman beneficiary of a second microcredit. Before receiving any loan, she used to work at the stone quarry located near to hear house. There she broke stones everyday. Nevertheless, having access to credit had changed not only her job but also her life. She stills sell stones for construction, but now employs someone else who can lend her a hand: a 15-old year girl who is happy about helping. Somoe also manages three more business: a little grocery and the sell of water and charcoal. When she thinks about obtaining a third microcredit, she has clear that she would improve the conditions of her actual businesses. But she also would like to sell her products a little further from home.


Stumae was the third woman that we interviewed. She received us with a big smile. She is a cooker. She buys fish, cooks it and then sells it among her neighbors. Nevertheless, it is a tough job: everyday she has to buy the products in her neighborhood, but if there’s no fish there she then has to travel to Kunduchi or to Bagamoyo to buy it, two cities that are not so close by. Not getting it means not working, and therefore no earning anything.


Vicky also used to cook and sell food, specially guengue (mainly vegetables such as tomatoes or onions). That’s what she told us in our fourth interview. She received us in her little house, full of shoes. So many that we thought that she was selling them. We were not right, but close: she is now selling clothes and perfumes to her neighbors. She happily explained us how her friends and clients phoned her every time there was a big event in the quartier and asked for special clothes. She is also a lender and allows her clients to repay little by little.


Our last interview was made to Tatu, the youngest of these five successful women. Mother and wife, she runs a little shop in the sokoni (local market) where she sells groceries. She dreams about building her own house in Mwanzu, another city. Therefore, she works hard and would like to have access to a new microcredit.

Karibuni to Tanzania

It’s been now 12 days since we landed in Tanzania to develop our project. We have spent those first two weeks exploring the neighborhood in which we live, as well as knowing our work colleagues and the environment we move in: markets, bars , quartiers.. A different and exciting experience that we are very happy to live.

Here we will work in Tevi, the local foundation for which we will design the communication, marketing and fundraising plans. Tevi Foundation is a nonprofit organization that works for gender equality and the empowerment of poor women from the district of Kinondoni ( Dar es Salaam ) through microcredit financing. It is estimated that in Tanzania there are about 8 million small businesses that need this kind of financial services, which are mainly concentrated in rural areas. With these loans, women are able to start their own business: from the sale of food and beverages to hairdresser services.

In the coming days, our work will be to visit some of these women to know their stories and compile them in order to disseminate them and spread the work that the foundation carries out and try to get donors that can allow its continuity. For the moment, we are managing the translation of documents into Swahili, a fascinating language, so that we have no communicational problems.

We´ll just keep on telling you about it!