Help Finance a Small Business
For just $150, you can change a person’s world by helping them to start their own business in Uganda.
Multigenerational poverty is common in developing countries. Illiteracy, poor health, and unemployment compound a person’s ability to break the cycle of poverty. In 2017 we developed a sustainable microfinance model providing people the opportunity to climb out of extreme poverty through hard work and to develop a foundation which can benefit future generations in Masese.
With the cooperation and guidance from the Uganda team, composed of local educational, civic, and religious leaders, we created the Masese Microfinance Network whose goal would be to improve the economic, familial, and educational outcomes for the people in Masese through microfinance loans.
In July 2017 the Masese Microfinance Network was launched and in August the Uganda and U.S. teams met to process the first round of applications, resulting in six microfinance loans averaging $60 per loan. All six of the loans were made to women and demonstrated a variety of business opportunities including a vegetable stand, a beauty salon, tailoring and dressmaking, and the sale of charcoal.
Although loans are defined as interest-free, the teams established a payback model in which part of each payment had a small interest component. Once the loan was fully paid by the loan recipient, the accrued “interest” was returned to the loan recipient. The interest component was intended to act as a tool to help motivate entrepreneurs to save a portion of their proceeds in order to reinvest in their business.
We deeply appreciate your generosity and donation! It will help impact the future of not only Jinja, but Eastern Africa!
Any and all donation amounts are tax-deductible and go 100% toward funding the micro-finance projects.Although loans are defined as interest free, the teams established a payback model in which part of each payment had a small interest component. Once the loan was fully paid by the loan recipient, the accrued “interest” was returned to the loan recipient. The interest component was intended to act as a tool to help motivate entrepreneurs to save a portion of their proceeds in order to reinvest in their business.
The Story of Caroline
Caroline is on her second round of financing, having been successful in round one by establishing and growing her tailoring business. She is 30 years old, grew up in Bali, northern Uganda and moved to Masese nine years ago after completing three years of secondary education where she took a class in sewing. She is one of the few women in Masese who has some formal education, and after the birth of her first child she began to use that education to begin a tailoring business.
Caroline represents a wonderful case study of how her motivation and innate business sense produced a successful entrepreneurial business opportunity. Without any formal business training she was insightful enough to diversify the funding amount to increase the probability of her success. Although most of the funds went to purchasing denim to make pants and jackets, she also used part of the funds to purchase chickens, which she later sold for a goat, which she later sold for a cow! Each purchase was profitable, the chickens yielded eggs which were sold, the goat for milk and the cow for milk and breeding. As a result of her success, she moved to a bigger house, and opened a small shop in the local market where she makes and sells her clothing. The remarkable aspect of Caroline’s story was how instinctively she minimized her risk by diversifying her business opportunities, and as it worked out, both objectives became profitable. When asked about her daily sales she indicated on a slow day, 15,000 shillings ($5.00) and at the season high at Christmas, 30-40,000 shillings. Prior to the first loan she would make 5,000 shillings per day working from her old house. It is amazing what $60 can do!
The Story of Allen
The beauty of the funding for Allen shows the motivation and natural business sense that so many of the recipients have demonstrated in our microfinance program. Allen’s proposal was to resell bananas, that is, she would get a ride on a motorcycle a couple of mornings (5:00 AM) a week to purchase bananas from a wholesale distribution center, and then return to the fruit stand she had set up at her house. Unfortunately, Allen did not realize that there is substantial competition in selling bananas and the fact that they can spoil. She quickly modified the objective of her loan to start selling charcoal, as well as other fruit and vegetables. She then used her profit to purchase chickens which, allowed her to sell eggs at her stand. She has fully repaid her loan and now has a successful business in our village. This is another story the demonstrates the resourcefulness and desire to succeed when given the small opportunity presented in microfinancing.