Today We Are At Kitasengwa

Today was a double header.  Our first stop was Kitasengwa which was followed by Ihemi.  They are both located just off the highway southwest of Iringa. 

We arrived at Kitasengwa about 10 and had chai.  The pastor greeted us when we arrived, and then caught a bus to his home village in the Njombe region.  His elderly mother lives there on the 15 acre family farm.  Since her children have moved away, and their father is dead she only farms a few acres.  Recently some squatters showed up and claimed part of the farm.  He and his brother are now going to get them thrown off.  The law here seems strange to us.  If you own land but don’t use it for 3 years someone can claim it as a squatter. 

Kitasengwa started with a large group (63) then quickly dwindled to 34 because many people thought that we were going to offer them “free money” and so they signed up.  

Villagers here have often signed up with government SACCOS which then go broke when no one repays their loans and the government does nothing.  When they found out that they needed to save, have plans, repay their loans, etc. they left.  Since then this group has not added any new members.  A discussion followed regarding reasons for this.  We learned that there are several things happening here.

First a new SACCOS came to town promising easy money for loans for anything.  Right now their loans are running 60-70% per year but all you need is to sign up with your land, etc. and they will give you a loan.  This has attracted a lot of people – but we expect it will go bust (just like all the others) and everyone will lose money to the “businessman” who owns it in a few years. 

There is also a new bank that is offering loans of fertilizer and seed.  The problem is they do not tell you the interest rate nor the cost, but will bill you at the end of the season.  We are expecting that people who go this way will also wind up with a very large bill at the end of the season – something we have seen elsewhere.  The problem with all of this is of course that many, many people are convinced that these are great deals, even though they have been cheated before (think Nigerian scams in the US – how do those guys keep making money?)

Perhaps the reason that these things are popular now is that the last year was very hard here.  Many people make and sell bricks in this village.  Unfortunately the area where they make bricks was flooded last fall and many of the bricks were ruined while others just could not be reached and thus could not be sold.  Locally the crops also suffered from a drought and yields were down.  If you did not use fertilizer and proper seed you probably got almost nothing. 

There is however a second issue here.  The SACCOS leadership has been reluctant to recruit more members because they are having trouble collecting.  It turns out that one of the members was given a large loan and decided that the money was really “Tom’s money” and so he did not need to repay it.  When he did not repay 7 other members decided they would hold off on paying too and see what happens.  The chairman and the Treasurer did get these 8 to agree to a delayed repayment plan, but everyone thinks that this will not be paid either.

At the heart of this issue is a problem we have been working to avoid all along.  This SACCOS elected an Evangelist as the chairman.  At Iringa Hope we have a rule that NO church officials can be officers.  We do this for a number of reasons.  One of these reasons is that when someone is late you need to take prompt, forceful action.  In this case when they held elections they did not count the Evangelist as a church official and elected him.  By the time we realized the error they had already made some loans so we decided we better wait and work with them.

As we talked about the collection issue with the chairman he said, “How can a churchman force someone to pay.  I have tried and tried to appeal to him but he just makes excuses, lies to me, and ignores me.  What can I do?”  

Peter told him that since he took the job of chairman he needs to push to collect.  Since they have done a work out plan and he ignored it, it is time to go to the village elder and write a letter to him informing him he pays or he will be arrested and his property seized.  After sending this letter he can go to the police and have him arrested.  The chairman is clearly troubled.  He delays and delays.  Later on, during our meeting, he decides that we are right and tells the man that he is greatly sadden that he has to do this, but he will act if he does not pay within the week.  We will see, but it may be best if the chairman were to stand down after this is collected.

Our meeting was pretty much the same as our others.  The main difference came at the end when the delinquent borrower got up and offered excuses for not repaying his loan, followed by a complaint that he hadn't been given any fertilizer this year.  Peter explained that the reason he didn't get any fertilizer this year was because he hadn't repaid his loan.  Then the chairman stood up and informed the man that he was going to send him a letter and then have him arrested if he did not repay his loan.  We could all see the strain this placed on the chairman, but he took on this responsibility when he was elected.

We were running short on time and needed to get to Ihemi so we only interviewed one SACCOS member here.  The woman’s name is Fausta Msisi, who is 34 and married with 4 children.  She has been a member since the SACCOS started and will be glad to see the late borrower thrown out of the SACCOS.  She thinks that when he is gone and the other members realize how much they are paying at the other places the membership will grow.

Fausta has taken out two loans.   The first loan was for 200,000 TZS ($100), which she used for making bricks.  When she sold the bricks she earned a profit of 800,000 TZS ($400).  She used her profit to increase her savings and to buy a pig.  The pig had piglets which she later sold. 

Her second loan was for 400,000 TZS ($200).  She used this loan to make bricks and bought 3 more pigs.  She now has 4 pigs and 10 piglets.  She was fortunate that the flood that destroyed the bricks of some of the SACCOS members didn’t affect her bricks.  The price of bricks is down this time of year so she plans to wait until May to sell them.  That is the season of the year when people are more likely to buy bricks for house construction.  At that time of year, when she sells all of her bricks, and then sells the pigs, she expects to earn a 2,000,000 TZS profit ($1,000).  Fausta clearly understands how to make the SACCOS work for her.   

We will post the Ihemi report tomorrow (after we get back from Magubike).

The pastor waited to greet us before he left.  He is an old friend of ours.

Peter sat down with the chairman.  He is a part time evangelist here and is struggling with how you collect a debt.  He realizes he agreed to do this when elected but the reality of this did not hit him until now.

This SACCOS meets in a village community building.

The main meeting ran as usual with Sandy and Tom giving greetings followed by Peter giving a class and answering questions.

This member told the chairman that he did not have to pay his loan back because, "It is Tom's money."  He was promptly told that it is the SACCOS money and he knows this.

The chairman slowly rose and informed the member that he would be getting a letter from the village.  If he does not pay after this he will be arrested and his property seized.  It was clearly a painful thing for the chairman to do.

Sandy sat down with Fausta Msisi, who is 34 and married with 4 children.  She said that she and many others would be glad when they collected on the trouble loan.  They intend to throw him out of the SACCOS.

Fausta has taken out two loans.   The first loan was for 200,000 TZS ($100), which she used for making bricks. She is now on her second loan and expects to earn over 2,000,000 TZS ($1,000).  She clearly knows how to make her SACCOS work for her.