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Microcredit for Farmers in Mubende, Uganda
Category: Microcredit | By SDR, 23-Oct-2019 | Viewed 164  Comments 0 | Source Maya Smeulders

Microcredit alive and prospering in Uganda


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Maya Smeulders - Uganda Microfinance


After ten years the Mubende, Uganda microcredit project

sponsored by the Abingdon Vesper Rotary Club has been building on its successes. Today the project is as fresh and popular with farmers as the day it started.  This is evidenced by the 80+ farmer groups wanting to join and the enthusiastic participation of group leaders in our Training Seminars. On day one we welcomed 120 chairmen, secretaries and Key Farmer Trainers (KFT), and on day two 80 treasurers for bookkeeping training.
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Abingdon UK

The microcredit project consists of an interest free three-year loan to an established group of farmers. This is combined with training in bookkeeping and sustainable organic agriculture by a Key Farmer Trainer.  From the loan the group gives small 10-month loans to its members. These enable them to buy or rent some land, pay for labour or buy an animal or seeds. Above all we stress that loans must be used for income generating projects only.
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Abingdon UK

It fulfills a very real need, as it is impossible for ordinary small scale farmers in Uganda to escape the cycle of poverty without the kind of training and loans that we provide.  Interest on bank loans prevents a group from building up a loan pool and lending schemes of the Ugandan Government do not reach the rural population. These either have unattainable conditions or they simply disappear before they reach grassroots level.  Thousands of farmers in Mubende are extremely grateful for the opportunities Abingdon Vesper Rotary has given them. 

As part of the project we encourage people to use their profits for education, mosquito nets, water filters, water harvesting and other farm and home improvements.
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Mubende, Uganda

From the beginning of the microcredit multi year project in 2007 we have given out loans to 102 farmer groups with a total of 2900 members.  Counting also the members' families, we can say, that well over 20,000 people have directly benefited from it. The impact goes even further, as these groups set an example for other people in the community, who then set up their own groups.

By visiting Mubende every year, Members of Abingdon Vesper Rotary Club provide training and encouragement and make sure that the programme is running well.  Every group that has microcredit is visited and we also meet lots of potential groups, so that we can evaluate them before they receive a loan.  These visits form an important part of the programme.  Throughout the rest of the year we stay in regular contact with the local Co-ordinator via email and WhatsApp.

A small number of groups have fallen apart and have difficulty in paying back the loan or are doing so very slowly.  In four cases the group leaders were unwilling to pay back.  We successfully recouped money from a number of groups and shall continue our efforts to recover all outstanding microcredit, but inevitably some of the outstanding money will not be recoverable.  Today the deficit stands at 2,500 pounds which is only 3.6% of the total sum lent.  As any bank can tell you, losses are not unusual in the "lending business".  Our losses are comparatively small, especially taking into account the vulnerability and "credit rating" of our "customers". 
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Abingdon UK

The continuity of our microcredit program is not only helping the farmers, it is also giving Rotary a very high reputation in Mubende. 

This is truly "Rotary the World Over".




Maya Smeulders
Mubende Projects Coordinator
mayasmeulders@hotmail.com

Editor's note: This is a summary of Mays' full article which can be found at:
http://ragm.org/docs/Abingdon%20-%20Mubende%20Microcredit%20Project1_376.pdf
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