Small Enterprises and Smaller Loans

Gaining access to a loan is nearly impossible in the village.  Most villagers don’t have bank accounts - they often don’t have enough money to open an account or rarely have enough money to keep the account open if they are able to open one – and banks typically aren’t nearby.  Yet, an influx of cash is needed in these areas because villagers have entrepreneurial dreams too – just like their friends and family in town.  That’s where Village Savings and Loans (VSL) groups come into play (something I’m just now learning about… in my third year of working with community groups - ugh... late but at least I got to the party) and help fill this important gap. 

The Manyoonyo Community's Village Savings and Loans (VSL) Groups met and held a meeting for us to watch.  The the small blue box by the woman's feet is where they keep their money.  The man to the left and the woman in the stripped shirt were the group's secretaries (in charge of taking all notes about loans given and repaid).  The group's formal name was "God is Good."  They've had such popularized success that a second VSL group in the community has started.  It's called "To Live in Poverty is a Choice."

The idea is that a group of five to twenty individuals come together and save a small amount of cash per week as a way of consolidating their resources for the good of the group and the gain of the individual.  Every week, money is saved by group members and then loans (very small loans on the scale that we Americans are used to) are given to individuals looking for a small influx of cash for a side project here or there. 

In my current job I’ve been tasked with assisting the Women’s Empowerment Coordinator of our project with recording what’s working, what’s failing, useful innovations, and ways to promote this method more fully.  It’s been incredibly interesting – maybe the most interesting thing I’ve worked on this entire year.  

The longer I’m here the more I realize that it’s ALL economics.  Sure, being able to grow more food (increasing yields) is important, but adding more value to the already produced crops is equally, if not more, valuable.  And then there’s the fact that economics and demand drive market availability and that influences what a farmer grows.  It’s important to grow the food, but economic viability and access to diverse income fields is something that can’t be harped on enough - it's the only way to truly escape chronic poverty.  The average person in Zambia lives on less than $2 per day, anything above that can make an enormous difference, especially when it comes from a source separate from farming.

The group really tried to promote transparency by collecting money (both for loan repayments and savings) in front of the entire group.  Keeping detailed records, as seen here, is the cornerstone to their transparency efforts.

So, I’ve been traveling around and meeting different groups that are involved in VSL.  The response has been great.  To be honest I was coming into the project a little pessimistic, a little biased in a negative light toward their work.  I’ve seen so many groups not work that I had a hard time being open-minded and thinking this may be different.  I’ve been happily mistaken.

Although it is early on (the groups started about 6 weeks ago), they are meeting weekly as they're supposed to, saving regularly, and issuing loans to group members – exactly the way they’re supposed to work!  Here are the basic rules: groups set the amount that each member needs to save (between $1.50 to $6 per week), a member can’t take out a loan until they’ve saved for four weeks, the group sets its own interest rate (typically 10%), a loan user must repay their loan within one month’s time, and when the group would like to withdraw the money they’ve been saving over time (like at a bank) they’re allowed to do so without question.

Made up of 20 members, this group was largely women (17 women to 3 men).  This was great to see.  Typically men are in charge of finances in the village, so to see women taken initiative in this program was wonderful.

During a meeting last week the group we were visiting collected all their loans on the exact day they were due: not one single loan of the seven outstanding went un-repaid.  In total the group collected about $32 in outstanding loans and saved an additional $10 for their coffer.

In another meeting a woman told me she had just been issued her second loan for about $70 because she had successfully repaid her first loan ($16) on-time.  She was planning on using the new loan to buy rice from Tanzania, import it into Zambia, and then sell it to local restaurants.

It's not a lot of money - these loans - but it's something to start with and it has vast potential to grow into something much bigger over time.

The successes I’ve seen have been great, although I’ve noticed a few yellow flags: 

So many of the individuals that we’re working with on this program are mimicking what they’ve seen work before by neighbors.  Many of the women are buying crates of tomatoes and then selling them on the roadside, along with other tomatoes already being sold by their neighbors.  Some are selling bananas in the same manner – small tables of bananas upon bananas dot lengths of roadside.  The list of examples like this goes on and on, and because it’s a big risk to take to sell something outside the norm it doesn't seem too likely to change anytime soon.

The businesses are being invested in with small bits of money – pennies, really.  I’ve taken to calling them “penny businesses.”  One woman I spoke with said she took out a loan for $1.50 and earned $4 after selling tomatoes.  After repaying her loan she remained with about $2.25… not much, but it is something. 

The group and me at the end of the day.

VSLs are a great start for many of these groups.  If nothing else it teaches book keeping and allows the group to function with a singular meaning / focus in mind: financial independence.  But most importantly, the VSL groups are helping to diversify incomes for the women and their families, so that they don’t have to be wholly dependent on one activity for money, which is bound to pay dividends in the long run.

The Trashy Side of Zambia

Zambia is a beautiful place,  but some corners of it are just plain trashy.  It’s hard to think that the nation that is home to half of Victoria Falls, incredible forests, endemic species of antelope, and other things that make you say, “Wow!” or “Huh?! That’s incredible!” is also home to piles of strewn about trash.

There are some trash pick-up services in the bigger cities, but not many people use those.  No one enforces where trash (or rubbish as it’s sometimes called – thank you British people) is disposed of, so people throw their bags, bottles, and everything else out the window or doorway.  Sometimes it gets swept up, sometimes blown away by the wind, and sometimes it just gets crushed and pounded into the ground.  I’ve never been able to fully understand why it isn’t disposed of directly into a pit, like what can sometimes be found in villages, but it isn’t.

Kids in the village helping their father burn a pit full of old trash.  It was like watching kids form Lord of the Flies... the burning plastic made for beautiful color variations.

Mainly it gets pounded into the ground and at times it seems like the entire road surface is made up of crushed plastic Fanta bottles.  During the occasions that it is swept up people try to burn it.  That makes for some really wonderful sunsets full of yellows, oranges, reds, and the occasional purple.  You wouldn’t believe how beautiful pollution can be!  I’m not sure why that Native American in the old PSA from before my birth was crying… he should’ve just lit it all on fire, sat back, and watched the amazing hues.

Watch him in his little canoe:

Once I was talking to some travelers from the UK and they commented that they believed Zambia would be the most beautiful country in all of Africa if only the trash wasn’t so easily seen.  Sadly, it’s pervasive.  

Piles and piles of trash can be found in every community (cities, towns, etc.) of Zambia.  Oddly enough, trash in the village isn't all that bad.  Mainly, I think, it's because they don't buy a lot of plastic containers or pre-packaged things.

It’s so pervasive that I once heard a story about a volunteer that threw a bottle out of a car’s window.  When another volunteer asked why they did that, why not hold onto the bottle, the first volunteer responded, “If they don’t care about litter in their own country, why should I?”  Ugh… not the answer I would hope or want to hear.

Not everyone feels so indifferent about the trash situation here – local artists have tried bringing the issue to the public’s attention by creating different sculptures throughout Zambia (namely in Lusaka and Livingstone).  The artists have constructed wire-caged sculptures of rhinos and elephants and then filled their bodies with trash found around town.  Eventually wind and rain work the trash out of the sculptures and what’s left is a half-filled elephant with trash strewn about.  But, I like the idea.  I like it a lot!  Their hearts are in the right place.

Zambia is an incredibly beautiful place full of beautiful and wonderful people, but the trash situation here is gross.  It's unsightly, smelly, and something that I wish would go away rather quickly.

Zambia really is an incredibly beautiful nation, but the trashy side of Zambia sure is ugly beyond belief (I know this is often a problem in a lot of developing nations, but I live here - so, I'm going to complain and write about here).  Even if the trash gives me amazing sunsets it also makes me cringe – mainly during the other 12 hours or so of daylight.