Micro Loans - Building Businesses – Building Futures
The Livingstone Tanzania Trust’s micro-loan project provides business training alongside affordable loans to those unable to access the banking system. In this way community members are empowered to improve their income and their quality of life, (housing, diet, clothing, health care); women members gain respect, confidence and status within the community as they challenge local gender stereotypes; households improve their resilience levels and reduce their vulnerability; community members are able to take advantage of the of economic opportunities that development brings rather than being left behind; and importantly when the community members spend their money they spend it in the local community, benefiting other small businesses.
Elizabeth for example is a 41 year old grandmother who never went to school and cannot read or write. With a loan of £60, she bought some baby goats, fattened them up, sold them for a good profit, she then put her daughter through secondary school, bought 5 piglets and fattened them up, sold one to repay the loan with interest and ended her year with 3 pigs and a sow and a business that can provide her with an income for life.
The Livingstone Tanzania Trust’s micro-loans are managed through registered community groups. LTT loan the group funds and it is their collective responsibility to repay the loan with interest before the next round of loans are provided. This creates a sense of responsibility to each other and ensures that the money is repaid.
LTT’s micro-loans project continues to grow and evolve and now that the members have some money, LTT are going to open up a saving programme that, in time, will enable LTT to withdraw from the project in that community.
The members have invested in micro-loans in a variety of small businesses covering: -
- Quarry work
- Agriculture, crops and livestock
In Year One, the scheme invested £3,000 which generated a turnover of £8,700 with a net profit of £5,700 providing on average an income of £110. In Year Two, the scheme invested £4,220 which generated a turnover of £15,200 with a net profit of £8,320, providing on average an income of £160. In the second year 23 people were employed by our members.
The members have been spending their profits on
- investing back in the business
- basic needs (more food, new clothes, medicines when needed)
- children's education
- home improvements – additional bedrooms, new toilets, modern roofing
All the members of the programme recognised that the micro-loan and their hard work had resulted in an improved quality of life and improved outlook for future. It is wonderful to see the confidence and self-belief that this has created.
In projects like this it is important to recognise the links between loans, their success and the training and mentoring/support that ran alongside the project. It is this support that is equally as important as the loan itself.