I won’t give in: How savings cooperatives help

I won’t give in: How savings cooperatives help

“I won’t give up, no I won’t give in ’til I reach the end and then I’ll start again. No I won’t leave, I want to try everything, I want to try even though I could fail.” “Try Everything” by Shakira

“I won’t give up, no I won’t give in,” proclaims Shakira in my current favorite you-can-do-it song, “Try Everything.” When we fall down, it usually helps when someone is there to pull us up again. In Malawi, COMSIP cooperatives are strong community organizations whose members pull each other up to the next level and to a better, more stable future.

COMSIP stands for Community Savings and Investment Promotion. It is a national project in Malawi that is more than a bank. From what I witnessed at a gathering of the Manyamula COMSIP cooperative, they were like a support group as well as a catalyst for economic growth – giving each other advice and encouragement in their endeavors.

“Our members of the Cooperative are entrepreneurs,” said Canaan Gondwe, leader of the Manyamula COMSIP, and a member of the national COMSIP Union Board. “The mobilized Savings form the capital base from which members borrow and engage in various forms of businesses, such as poultry, retail shops, irrigation farming, baking, pre-school and carpentry among others.”

After 3-4 months of saving money from her business, Beauty was able to use the savings as collateral for a larger, low-interest loan from the cooperative. Cooperative members can apply for loans in proportion to their savings shares. Beauty used the loan to buy high-quality feed and medication for her chickens. She knows that the medications are crucial for protecting her investment in the chickens. 

DSC04928_1024

Beauty with her daughter.

For Grace Banda, a widow, the COMSIP cooperative was just the kind of encouragement she needed to try again. Before joining COMSIP she had taken a loan from one of the traditional micro-finance lenders in Mzimba, the nearest city and 44km away. When an unexpected event caused her to business to flounder, she was unable to pay back the high-interest debt and had to forfeit her collateral.

DSC04618_1024

Grace in her shop in the Manyamula market.

COMSIP loans are not only low-interest, they also have repayment schedules that are adaptable to the business cycle – with longer terms for farming and cattle rearing. The local COMSIP leaders can work with the members to give them the highest chance of success. Grace’s Kikumala Shop is still going strong, and is a good source of fresh produce in Manyamula.

These are profound ways that COMSIP helps people start again. And the result is that lives are changed. Ninety-five percent of the 150+ cooperative members have improved their housing since joining. Many more can pay medical bills when illnesses arise. Grace Banda can now pay for school for her three children. “Life is continuing to become simple,” she told me with joy and relief in her voice.

This sentiment is echoed in a wonderful article from the World Bank about the successes of COMSIP groups. Gilaselia Denesi, who became responsible for her four grandchildren when her daughter and son-in-law died, shares how joining a COMSIP cooperative in central Malawi has led to positive change in her life. ““Look at me now!” she says. “God be praised, today my grandchildren, are in school, they are not hungry and even I have some time to have tea in my home. Can you imagine that? I am wearing a new dress today and I have some time for tea!””

For more about COMSIP:

After Finly joined the COMSIP cooperative and began saving, he used a small loan to buy improved Red Creole onion seeds for his farm.

After Finly joined the COMSIP cooperative and began saving, he used a small loan to buy improved Red Creole onion seeds for his farm.

More amazing technology & Some challenges

More amazing technology & Some challenges

I had two interesting conversations this week after my blog on how technology is improving our work. (I also added another 2 SIA partners to my WhatsApp contacts!)

Mobile Banking

I had another thrilling moment of wonder at technology as I was talking to Josephine Ameyo (pictured above) about the community bank she wants to start with women in her informal settlement in Nairobi. I know the area can be dangerous – several business leaders have had supplies stolen, and our Small Business Fund Coordinator always arranges for protection when she visits the groups. So I asked Josephine how they would keep the savings safe, and how they would safely transport the savings to the bank.

She responded with good news, “We shall not deal with cash. We have a popular money wire transfer app in Kenya known as M-Pesa which is available in mobile phones here. When people apply for loans we shall remit the cash through that service. And when they repay their loans we shall give them bill-pay number, which is also available from the mobile service provider. There shall be no money exchanging hands hence it will be the safest mode of money transfer.”

The women will be able to borrow money and repay loans through their phones, using the vast network of certified M-Pesa dealers to securely manage the cash. Amazing! (Read more about mobile phones in Kenya.)

Those Left Behind

The second conversation was a sober reminder of the growing technology divide. Margaret Ikiara, director of Community Initiatives for Rural Development (CIFORD Kenya), is a local leader in a very rural community in central Kenya. She works with many women who are caring for children whose parents have died from HIV/AIDS; women who are struggling to grow enough food for themselves. Sure, some of these women have cell phones, but they are not phones that can handle WhatsApp.

“I saw the update in the SIA Website and surely technology is fascinating and changing so fast,” wrote Margaret. She continued with a troubling contradiction, “In our community what puzzles me and leaves me with no words is that even in the fast changing world there are parents who are not taking their children to school. That means there are people who will be 3 decades behind others. They can not write letters, emails, nor use WhatsApp.”

It is a clear reminder that even as technology is making lives easier it is not close to reaching or aiding so many people in the places where SIA works. This, in essence, is the call for Spirit in Action. Let us strive even harder to support these women so that we are all progressing and benefiting together.

Rehema us tells about how their savings group keeps their funds secure, and their records accurate.  In rural Uganda, a box is enough to keep the funds safe.

Rehema us tells about how their savings group keeps their funds secure, and their records accurate. In rural Uganda, a box is enough to keep the funds safe.

“A partner who has walked with us side by side”

[Above: A video snippet of Canaan’s speech; with Winkly Mahowe interpreting into the local language.]

It was exactly a year ago that I was in Malawi and witnessing the amazing change happening in Manyamula Village. When I was there, Canaan Gondwe, who has been an honest and dedicated leader in his community, gave a wonderful welcome address to us and the gathered SIA friends. Imagine you are in a crowded, cinder block meeting room, the smell of dust outside, the music from the band and the clapping and singing are dying down. Over 100 of us settle ourselves in the plastic chairs and give our attention to Canaan:

Manyamula COMSIP Cooperative members sing a song of welcome. (Malawi, 2014)

Manyamula COMSIP Cooperative members sing a song of welcome to Tanya. (Malawi, 2014)

“On behalf of Traditional leaders, Area Development Committee, Government Staff present here, all Cooperative and Small Business Fund members and all people gathering in this room and on my own behalf, I feel greatly honored and excited to sincerely welcome Tanya Cothran (SIA Administrator) and Dr. Boyd Cothran (SIA Board Member) in Malawi and in particular here in Manyamula COMSIP (Community Savings and Investments Promotion) Cooperative, “where together we grow.” Feel free and feel at home in the warm heart of Africa (Malawi) to interact with each of us and hear remarkable stories of positive change in our lives.

The Manyamula COMSIP Cooperative Society, formerly known as MAVISALO, and the Small Business Fund project, supported by Spirit in Action, have played a critical social and economic role in enabling members to escape poverty and marginalization. I am saddened to recall and report the situation of our members before these institutions were established in this area:

  • About 80% had never used a bank
  • About 90% had poor housing infrastructure (houses that are grass thatched, houses that leak during rainy season, houses built of mud and with poor ventilation
  • Members of the cooperative had to travel 44km each direction to access commercial lending institutions with high interest rates, high demand of unaffordable collaterals, coupled by short period of loan repayments
  • About 60% of our people were food insecure; members could not afford fertilizer

I am extremely excited and pleased as a leader of the Cooperative and the Small Business Fund (SBF) that these programs can and have begun to reverse the above mentioned trend. Both the cooperative and SBF project have continued to post continued economic growth on its members from year to year.

Our members of the Cooperative and SBF project are entrepreneurs. The mobilized savings (shares), which currently are 4.8 million Malawian Kwacha [about $10,000 USD], form the capital base from which members borrow and engage in various forms of business: such as poultry, retail shops, irrigation farming, livestock production, baking, bicycle repair, shoe repairing, carpentry, tomato sales, fish marketing, transport, music shows, restaurants, pre-school, barber shops, photography, and winery sales among others.

COMSIP and Small Business Fund members in their meeting hall.

COMSIP and Small Business Fund members in their meeting hall.

Impact

I am extremely excited to openly expound the positive change and better life that members of the project enjoy:

  • All 167 members (with 47% women) have embraced a culture of savings and investment.
  • Members of the cooperatives and SBF have created self-employment
  • There is increased income and general economic empowerment at household level because of improved skills and experience in entrepreneurship
  • Better housing for 95% of cooperative and SBF members (Houses with burnt bricks and iron sheets)
  • Increased asset acquisition by members (eg. Motorcycles, bicycles, band equipment)
  • Improved health at household level (good nutrition); our members afford to go to private clinics and pay medical bills.
  • Members of the cooperative support their school-going children well (uniforms, fees, transport)
  • Improved food security amongst members.
  • A total of 20 members have either done electrical wiring of their houses or are completely connected to the power grid.
  • Increased cooperation among members
  • Reduced marital violations (including income abuse)

Support from Spirit in Action

Through and over the years of our operation in the Cooperative and Small Business Fund, Spirit in Action has been a true and faithful partner; a partner who has walked with us side by side on our growing of the institution. SIA has assisted the Cooperative with grants that have moved the organization to acquire relevant assets and projects like the maize mills, motorcycle, poultry project, camera, and a laptop.

Through its Small Business Fund project from 2004 to date, SIA has supported 102 families with business training and skills with $150 paid in two installments. Over and above, all traditional leaders, SBF and Cooperative members are grateful to SIA for these landmark projects.

Conclusion

The Manyamula COMSIP cooperative, as a rural-based economic vehicle, embarked on the journey to economic empowerment of its members. With the assistance of Spirit in Action, our true and faithful partner, the cooperative and SBF project want to achieve positive change in our members. Finally, I am pleased to report that the Manyamula COMSIP Cooperative, in a recent supervision missions by government officials and COMSIP Cooperative Union national leaders, has been rated a national model and a success story amongst all rural economic cooperative in the country. I believe SIA is very proud to be associated with such remarks. We believe that this partnership will grow even to greater heights in the future.

COMSIP sharp! [Cutting through poverty!]

SIA sharp!”

The band (who had also received a low-interest loan from the cooperative) played before the presentations.

The band (who had also received a low-interest loan from the cooperative) played before the presentations.

Opening a Savings Account in Uganda

Opening a Savings Account in Uganda
Rehema us tells about how the savings group keeps their funds secure, and their records accurate.

Rehema us tells about how the savings group keeps their funds secure, and their records accurate.

We sat on very small wooden stools and faced a group of about Ugandan 25 women sitting on woven leaf mats. In between us sat a green metal box with three locks. I listened with growing excitement as Rehema Mutesi told me and the other Small Business Coordinators about the Kasozi Village Savings Group.

If the women kept the profit from their business endeavors in their houses, the money would be quickly spent, with none of it going to savings. So, about two years ago they started talking to the local Spirit in Action Small Business Fund Coordinator, Godfrey Matovu, who helped them form their own micro-savings group. The 30 members meet once a week and commit their savings to the secure green box, in increments as small as the equivalent of 5 cents.

DSC05615Each transaction – how much each person has saved and how much they have borrowed – is recorded in a green ledger book. Then the money is placed in the green box, which is secured with three locks. Three different women have keys, and “the ones with the keys are not neighbors. They are all from a different place,” Rehema told us, assuring us of the safety of the saved funds. Then she added, above the loudly mooing cow, “and the person with the box also is not one with a key.” All these safety measures are important because at the end of last year’s saving cycle the box held over 3.8 million Ugandan Shillings (about $1,800)!

Each member can borrow a portion of their savings for a one-month period. They are charged a small interest rate, which is included back in the savings fund and disbursed to members at the end of the annual cycle. One of the group members took a loan this year to pay for a certification course in hair braiding. Now she is braiding hair in the village and in the nearby town, as well as mentoring and training some girls who have dropped out of school.

Canaan gives advice to the Kasozi savings group and encourages them. "You need to be organized and have strong leadership."

Canaan gives advice to the Kasozi savings group and encourages them. “You need to be organized and have strong leadership.”

I was impressed to see how these women were working together to encourage each other to save for those bigger expenses. Things like re-thatching their homes, paying for school fees, and medical expenses. I saw that the women supported each other emotionally too. They did a skit for us, showing how to care for a child with fever. They clapped for each other and laughed together. One of the members is a district counselor, but within the group she is on equal footing with all the others.

Before we ended our visit, Canaan Gondwe, the SIA Small Business Fund Coordinator from Malawi who also leads a savings group, stood up to give the women a few words of encouragement. Speaking from his own experience, he assured them,  “This is a journey towards economic empowerment. In five year’s time, you will never be the same.”

New Wheels for MAVISALO (Grant Update)

New Wheels for MAVISALO (Grant Update)

Do you know that joy? That moment when, after saving and saving, you finally have enough to make that big purchase?

The Manyamula Village Savings and Loans Cooperative (MAVISALO) felt that joy this month. After six months of diligent saving the Motorcycle Fund reached it goal!

Growing Grassroots

To back-up a second, SIA supported the formation of MAVISALO in 2009. Since then, the cooperative has provided a safe place to save money and access low-interest loans. Loans help people expand their small farms and local businesses. Savings are kept safe until a family can afford to buy a cow or a tin roof to replace their thatched one.

This group of 165 members deals with a lot of cash.

Loan payments and voluntary savings are collected each Tuesday. And so each Tuesday the MAVISALO Treasurer must travel to Mzimba to deposit the collected money to keep it safe and accounted for. Though Mzimba is the nearest town it is still a bumpy, dusty, hour-long bus ride away. Except there isn’t bus service between Manyamula and Mzimba. So people ride standing in the back of trucks to travel the 14 miles.

And packed in the back of a truck isn’t a safe way to carry lots of cash.

In addition, MAVISALO needed a better way to reach their many, distant, rural members – especially to conduct site visits before approving loan applications or to check on loan defaulters.

One of the bumpy, dusty "roads" around Manyamula Village in rural Malawi.

One of the bumpy, dusty “roads” around Manyamula Village in rural Malawi.

A Compromise

So MAVISALO requested funds from SIA to purchase a motorcycle. And SIA, wanting to support this amazing grassroots institution while also encouraging a sense of ownership of the motorcycle, proposed a compromise. A SIA grant would cover half the cost, and MAVISALO would have to save for the other half.

Canaan Gondwe poses on MAVISALO's new motorcycle. A log book will track usage, mileage, and scheduled maintenance.

Canaan Gondwe poses on MAVISALO’s new motorcycle. A log book will track usage, mileage, and scheduled maintenance.

That was last July. And now: the joy!

MAVISALO has saved loan profit and contributions from their maize mill and bought what Canaan Gondwe (MAVISALO Coordinator) calls their “sturdy and strong” motorcycle. Proving again their resourcefulness, MAVISALO enlisted a Malawian organization, COMSIP, which supports cooperatives like MAVISALO, to help them find a good bike and pay for the registration and insurance.

“The Cooperative is grateful to SIA and all members of the cooperative for raising the fund on a cost sharing deal,” announced Canaan in his recent report, “and we pledge to put the motorcycle to its proper care and use.”

Congratulations MAVISALO! Your diligence has paid off! I have no doubt that the bike will be well maintained and used for many years to come, enabling this strong and sturdy Cooperative to better serve their members and work even more efficiently.

Related Posts Plugin for WordPress, Blogger...