IWC’s Uganda Micro-Enterprise Demonstration Program: A Successful UU-Sponsored Experiment in Direct Micro-Lending

By Karen LaFrance, IWC Business Manager

Abbey Ssejjuuko and Rev. Renee Waun, in center, with women entrepreneurs at Mutundwe Village

Abbey Ssejjuuko and Rev. Renee Waun, in center, with women entrepreneurs at Mutundwe Village

Introduction and Findings:  December 2017 marked the completion of IWC’s Uganda micro-lending program. Somewhat sadly, the pilot effort will not be continued nor expanded to other locales.  But IWC did achieve several important benchmarks.

Program Objective: With its designated “Africa Fund” raised in 2009 at the First International Convocation of U*U Women, IWC wanted to encourage women’s economic development in furtherance of the UN’s Millennium Goals.  The Board did not want to “throw money at” poverty in a foreign land; rather, it wanted to have a sustained impact on women’s economic empowerment and, along the way, a meaningful experience for IWC members.

IWC demonstrated that the original concept of local micro-lending and training for poor women works: 1) it results in positive economic change for poor families; 2) it does not have to be done through large multi-national intermediary NGOs; 3) it requires a focused staffing, management and operational funding effort; and 4) training plus experiencing the economic power of securing financing has a positive effect on women entrepreneurs, encouraging both self-sufficient concepts and collaborative thinking.

The Demonstration: Organized around “lending circles” in the tradition of Muhammad Yunus’ ground-breaking Grameen Bank that served the poor in Bangladesh, the program offered direct loans of $200-$500 USD to 40 women entrepreneurs.  Participants paid these loans back, met together weekly and demonstrably improved their business practices and profits.  To sustain the effort without further funding and assistance, IWC and the Uganda-based staff spent the final 18 months helping the participants organize a nonprofit women’s business group using their own savings as capital for micro-loans. Suppressing some of the individual – often overt – competitiveness among participants in the original lending circles, this entity carries on IWC’s program through its members’ collaborative efforts.

In-Country Partner:  African Rural Schools Foundation (ARSF) has been IWC’s essential in-country partner. ARSF is a unique collaboration between several UU congregations in the USA and committed leaders in Uganda, whose purpose is to build schools for children orphaned by the AIDS epidemic. 

ARSF’s USA founder is Rev. Renee Waun, retiring minister for several UU congregations in W. PA, Ohio, and W. Virginia. Her congregations have provided the financial support for the Foundation and, by extension, they became key supporters of the IWC micro-enterprise program. Mr. Ssebunya Kizza, ARSF staff at the main school in Mutundwe Village, played an important management and networking role, particularly in partnering with Centenary Community Development Bank, LTD and with the local Rotary Club.

Abbey Ssejjuuko, IWC/ARSF community organizer, was a key hire.  A recent college-level graduate and Kampala resident, Abbey showed a strong interest in entrepreneurship and had very handy multi-lingual skills. IWC sent Abbey to micro-enterprise training, provided a monthly salary and expenses, a laptop, and mentoring.  Abbey’s community connection skills and enthusiasm were critical for the success of the program: he encouraged program participants every step of the way, making sure that they made their loan payments.

IWC Management: I managed the project from USA, writing grants, reviewing business plans, helping to devise reference-checking policies on potential participants with no credit history, developing training curricula, preparing loan guidelines with participant and staff input, reviewing loans that the lending circles recommended, mentoring Uganda staff, coordinating with Rev. Waun when she travelled to Uganda and monitoring all program components.  Management took place through weekly internet phone conference calls via Skype or VSEE. I provided reports in IWC newsletters, on-line webinars and IWC’s annual breakfast meetings at GA.

How the Demonstration Was Funded:  Funding for the project came from the $10,400 USD raised at First International Convocation of UU Women in 2009, grants from UU Funding Panels (2012-2016), and individuals. The lending capital of $7,000 USD resulted in 39 loans to 40 women. The face value of these loans was $11,758.70 USD (27,045,016 Shillings—UGX); as capital was repaid, it was loaned out again.  All loans were paid back by borrowers and IWC charged no interest.  IWC’s funds for loans plus remaining Africa Fund contributions were used in the final year and a half for essential staffing costs.

Lending Circles in Practice: “Lending circles” are small groups of entrepreneurs where participants learn about business, get input and feedback from peers on their business plans, and are jointly accountable for members’ loan repayments.  IWC’s circles met weekly to make loan payments and to learn.  They were organized around business types; besides retail and food-oriented businesses and hair “saloons”, members raised pigs or chickens, made bricks, sold phone cards, and provided rental housing units. A popular use of loan proceeds was building secure enclosures for livestock or for the actual business location.  None of these businesses were “bankable” in the Western sense. But, to encourage understanding and usage of banks for securing savings, IWC required participants to open bank accounts.

What’s Going on Now:  Rev. Waun (“Renee”) made her last annual pilgrimage to Mutundwe Village in January 2018 to attend innumerable retirement parties.  Members of the women’s entrepreneurial group greeted her. The group has made two loans to date and has been recognized for its initiative by the local council.  One of the lively leaders from the IWC program is President (see photo of women).

The Future:  Abbey, who worked so diligently for the program, has developed a business plan and started lending circles near his home. He was pleased to tell Renee that there are 80 women making weekly payments into a savings account which will be used for loans to the women. Renee wrote to us: “I was just thrilled to hear this news because Abbey has done such a magnificent job with our pilot program and now he is pulling together his own program. All that training, experience and work has paid off and I couldn’t be happier for him.”

Afterword:  For one of the coolest reads ever, please see Muhammad Yunus’s Banker to the Poor: Micro-lending and the Battle against World Poverty, PublicAffairs, 2007 version (available on Amazon).