Village banks empower Karamoja women

By  Francis Kagolo                  

Drenched in sweat, the women wear serious faces as they squeeze local brew out of sorghum dregs, in the middle of the town. The men are playing cards, others sleeping under trees.

The women look dead-tired but don’t worry how much they have to brew because the least important factor is their fatigue. They will rest later. 

For about three years now, the situation has been like this in Kaabong town. Unlike the dreaded days of cattle rustling, the town is a beehive of small-scale entrepreneurs. But the majority are women.

Thomas Remi, the sub-county chief for Kaabong East, partly attributes the trend to Village Savings and Loan Association (VSLA) schemes created after the disbarment exercise. He says the schemes have ignited in women a spirit to work harder and prosper.

Winnie Loongo in her retail shop in Kathile town. PHOTO/Francis Kagolo
 

Also known as village banks, the VSLAs were initiated in the hitherto conflict-laden region by mainly NGOs to fight poverty and social injustices.

For instance, through a project worth $800,000 (about sh2.1b), World Vision alone supported 13 women VSLA groups in Kaabong district, according to Molly Akawo, their community development assistant.    

Another 15 groups are for the youth who are also provided with seed capital and start-up kits to encourage savings and income generation. Some 20 youth were given sh65,000 each to start businesses.

Akawo says they trained 160 local women in small scale business management, vegetable growing, nursery bed management, and soil and water conservation. The women are provided with an assortment of seeds (9,360kgs) and tools comprising of wheel barrows, spray pumps, 1,410 pangas and 1,410 axes.

Women testify

Karamoja region, home to over 100,000 people (2002 census) and trapped in a cycle of violence and poverty for generations, is one of the least developed in the world. The residents have depended on food handouts since the early 1960s.

However, entrepreneurship is now surging in the area, with women starting to defy  by running on the forefront to venture into trade, vegetable growing, brewing, and commercial farming, thanks primarily to the saving culture created through the VSLAs . 

When 24-year-old Winnie Loongo joined Samaritan Women’s Group in Kathile town in 2012, her only source of income was brewing, earning about sh100,000 a month. Having dropped out of school in Senior One (S1) and married at 22 years, Loongo admits she lived an “almost hopeless life”.

Today, from the sh11, 000 she saves every week, the mother of two owns a retail shop plus two maize mills while her brewing business is flourishing. Before she joined the village bank, Loongo was ignorant about keeping money anywhere else apart from under her beddings. She now operates a savings account in Stanbic Bank on top of the village scheme.

“I started by getting loans of sh5000 from our VSLA which I used to open up a retail shop. You get more loans when you pay back,” Loongo explains. “My shop brought in more revenue. I bought the first maize mill in January and a second one in July this year (2014).”

Loongo earns sh1m a month from the two maize mills. She expects the monthly earnings to increase to sh3m between December , when most people harvest maize.

Using the proceeds from her businesses, she paid her husband’s tuition until he completed the bachelor of development studies from Muteesa I Royal University this year. He is due to graduate next year.

Being the first born in her family, she also pays school fees for her brother who is in S4 and takes care of two others still in primary school.

She now has big dreams. “Previously I would get money from brewing alcohol and misuse it,” she reminisces. “World Vision trained us how to save and later invest to get profits.  My standard of living is now good. I am planning to build a permanent house,” Loongo says.

Maria Nakolong, 45, the chairperson of Samaritan Women’s Group, said their husbands are supportive of the initiative. “This scheme is helpful. Most the women are now educating their children in good secondary schools. We also use the money to buy seeds and other agricultural inputs,” said Nakolong.

Women producing local brew in Kaabong town. Most of them belong to the village bank schemes. PHOTO/ Francis Kagolo   

How village banks operate

Besides training them how to save and invest, World Vision helps the women to elect responsible leaders. The organisation also offers the necessary kits including boxes, books and padlocks as well as start-up capital, seeds and other equipment to the members.

The treasurer, in particular, must have a permanent house with strong doors, which cannot easily attract thieves.

Each member has to save sh11,000 a month while a monthly 10% interest is charged on the loans to encourage hard work.

Loaning out money stops after the first 48 weeks of the year in preparation for auditing which starts after 52 weeks.
Although World Vision trained group members in basic auditing, Akawo said the organisation usually sends a technical person to help in the exercise and avoid disputes.

“We discourage VSLA leaders from hiring private auditors because they may connive with them to rip-off group members,” she explained.

After the annual audit, the members share the balance plus interest which is based on one’s savings.

“We are targeting to empower mothers because in the end they will use their incomes to improve their children’s quality of life,” Akawo said.

“The good thing is that, after seeing their wives progressing, even the men have become supportive of the project. We have not experienced domestic disputes arising out of women’s yearning to get rich.”

However, Loongo said they are facing a challenge of some members being reluctant to pay back the loans until they are threatened with arrests.