K-Loans: Empowering Women and Girls in Kasese District




Educate A Child International (EACI) K-Micro Loans goal is to promote increased access to sustainable loans and other financial services to women and girls in the Kasese District by 2018.

STEP 1: $2516 USD will support 68 women loans at 100,000 UGX = $37 USD each per month.
STEP 2: Every woman will pay back to EACI 100,000 UGX in one month.
STEP 3: With the $2516 USD being paid back to EACI, then in the 2nd month EACI will sign up another 68 women and repeat the Steps 1, 2, 3 again until EACI reaches its goal of 816 women.

Women in our community will be selling a range of products such as dry beans, maize, cassava flour, ground nuts, fish, palm oil, matooke, charcoal, fire wood and other small productive businesses.

Project Background:
Educate A Child International (EACI) has for the last 2 years piloted and promoted Village Savings and Loan Associations (VSLA) in Kasese with support from the Government of Uganda where over 200 groups have been formed and functional. About 87% of the poorest households do not have access to credit. That is why EACI attempts to alleviate poverty through the provision of Micro-Finance; a powerful poverty fighting tool that helps the poor to come out of poverty by accessing collateral free financial services. This experience has demonstrated that VSLAs can help address the major economic challenges faced by the poorer segments of the communities especially women and the youth because this category does not have access to loans from conventional banks due to lack of security. It has also shown that VSLAs, if consistently marketed and targeted, constitute a financial intermediation mechanism that supports group coherence and professionalism, rapid capital growth as well as group graduation to financing mechanisms involving formal Micro Finance Institutions (MFIs).Women have been designated as the target group because they are the most marginalized and tend to use resources more productive than men. By providing loans to women, EACI expect to see a rise in house hold income that will benefit the entire family and loans will empower the marginalized group by enabling women to have ownership of assets. EACI will provide loans to the poor through a community owned financing program that utilizes peer lending model. However, the loans will target income generating activities in an attempt to reverse the age- old vicious cycle of low income, low savings and low investment. Our guiding principle will be providing opportunity not charity in this project.

EACI believes it’s better to provide a continual stream of credit that will enable the poor to lift themselves out poverty. Access to credit will help them overcome vulnerability. Money will be lend out at 5% interest.

Problem Statement:
Kasese District is one of the Districts that make up the Rwenzori Region in Western Uganda with 29 Rural Sub-Counties and 6 Urban Councils and 110 parishes and 765 villages. At the last census of 2014 the District population stood at 694,992 people with annual growth rate of 3.6%. Understanding who the poor are, what causes them to be poor, and which areas with in Kasese District have the highest density of poorer and more deprived households is critical in formulating strategies to alleviate poverty among women and the youth. Despite positive development efforts throughout the district, poverty still remains an issue in Kasese, with 55.2% of households being either ‘moderately poor’ or ‘extremely poor’. The highest percentage concentration of ‘extremely poor’ households are found in the LLGs of Kitswamba, Muhokya, Kitholhu, Lake Katwe, Hima, Karusandara, Mpondwe Lhubiriha, Katwe Kabatoro, Nyamwamba and Bulembia Divisions. Moreover, survey results show that 28.7% of households not able to satisfy 3 or more basic needs out of the 5 identified and critically, 3.2% of households are deprived in all five areas of the deprivation index, indicating an extreme inability to afford basic household needs. Poor households extremely poor tend to live rurally, engage in petty livelihoods, and their household heads are likely to be less educated, and more frequently singles, divorcees or widows.

Almost half of the District’s residents have perceived a decline in wealth over the past 5 years (47.3% of households), most notably poor households and those with the most deprivations. This is predominantly due to high commodity prices/inflation, lack of capital, food shortage/drought and illness. Political and tribal conflicts can’t be under estimated. According to KDLG
(2015) unequal power relations, resulting in women’s dependence on men for decision making, ownership and control over household assets and income, greatly hampers women’s involvement in productive activities and restricts their contribution to economic development. Furthermore, in spite of efforts to address this issue, low educational attainments among women further render them susceptible to unemployment or underemployment and poor standards of living. The fact that 42% of women in the District are literate, compared to 52% of men. Households headed by singles, divorcees and widows are more likely to be poor, which highlights the particular susceptibility of female-headed households to hardships and poverty. The main challenges faced by women and female-headed households are low earning due to limited access to income generating opportunities, not being productively employed, being economically dependent on others, owning limited or no land, shouldering many different responsibilities, having limited control over productive assets and limited decision-making powers.

Goal:

To contribute towards improving the quality of life for women and girls by enhancing, innovation, enterprise development and accelerating  sustainable economic opportunities.

Purpose:

To promote increased access to sustainable loans and other financial services to  women and girls  in Kasese District by 2018.

Objectives:
1. To facilitate access to small loans by 33 VSLA groups (100% women and girls groups) by  2018

  • 2. To build the capacity of 33 VSLA (100% women and girls ) in business skills , enterprise development  financial literacy and employability skills thus enhancing their economic opportunities by  2018.
  • 3. To facilitate financial linkages for 792 women and girls VSLAs (55% being new groups) to access other financial services from formal financial institutions by 2018.
    4. To promote the linkage banking as a sustainable model for financial inclusion

Project Outputs and Results:
Objective 1: To facilitate access to small loans by 33 VSLA groups (100% women and girls group) by 2018.

  • Objective 2: To build the capacity of 33 VSLA existing group (100% women and girls) in business skills, enterprise development, financial literacy and employability skills thus enhancing their economic opportunities by 2018.
    - 33 VSLAs trained in Financial Education
    - 160 girls trained in financial literacy and employability skills
    Objective 3: To promote environmental conservation among the VSLAs by 2018.

    Output 1:
    - 33 VSLAs trained in the environment conservation
    - 20 Established environment conservation structures in the communities
    Objective 4: To promote the linkage banking as a sustainable model for financial inclusion.

    Output 2:
    Youth financial inclusion (from the informal to the formal financial sector).
    Linkage banking adopted as a financial inclusion model in the national frame work.
    33 VSLA groups able to access loans from other banks.
    Trained mentors and support groups in linkage banking.
    Youths able to access financial services from banks and other formal and informal financial institutions

Geographical Coverage/Scope:
The project will be implemented in entire district of Kasese targeting women groups. However, the project will start with Ten women groups of 15 members making them 150 members and will be a continuous process.

Project Duration:
The project will last a total of 12 months an equivalent of one year.

 

Implementation Strategy:
The project will be implemented in line with EACI policy and in accordance with international norms of efficiency, transparency and sustainability. While implementing the project EACI will endeavor to apply some of the best practices that EACI learnt in regard to implementing other projects. These include selection, deployment and support to competent CBTs & Village Agent; forming and strengthening Savings Groups; use of robust management information systems; establishing linkage and creating synergies with other stakeholders/programs in the district; institutional capacity building and close supervision and monitoring.
 

Activities:

  • - Mobilization of community and local leaders.
  • - Identification and assessment of VSLAs to benefit first.
  • - Training the identified groups in-group dynamics & organizational development.
  • - Training the identified groups in savings and loan mechanisms.
  • - Disbursing loans to the identified groups
  • - Conduct monitoring & supervision visits.
  • - Train clients in business and financial management.
  • - Develop relevant templates/tools to guide VSLAs.

Expected Achievement:
There is going to be increased house hold saving and investment capacity among participating VSLAs ,Increased community capacity in management of savings and loans mechanisms, increased ownership of assets by women, increased demand and access to formal financial services, increased involvement of project targeted VSLAs in viable non-traditional IGAs, increased participation of women and youth in viable IGAs and enterprises, increased and effective utilization of household income among VSLAs ,increased tree planting in communities ,functional environment structures in communities, women able to mitigate risk, plan for the future and make choices and policies will be adopted.

Success Indicators:

  • - 33 new VSLA groups functional
  • - Increased savings and loan portfolios for participating VSLA groups.
  • - SGs accessing formal financial and business development services.
  • - Women owning assets.
  • - Women and girls trained in business skills engage in viable income generating activities.
  •  - Women and girls linked to technical and business development service provider.
  • - 33 VSLAs trained in the environment conservation.
  • - Establishing environment conservation structures in the communities.
  • - A credit discipline culture inculcated amongst beneficiaries.
  • - Investment and income generating opportunities increased through diversification.
  • - Strengthened financial intermediation system.
  • - Overall credit outreach in rural and urban areas enhanced.
  • - Increased monetization of rural areas resulting in a vibrant rural financial sub sector created.

Major Risks and the Expected Intervention:

Major Risks

Mitigations      

Men forcing their wives to surrender the money to them.

Involving men in the establishment of the VSLAs

Potential risk of fraud and misappropriation

Internal audit system every after 5 days at the office and  field level

Negative attitude from girls about joining VSLAs

Involving girls in the exchange study visits with girls who have engaged in VSLAs

Complaints from  men about women involvement in the VSLAs

Sensitizing men to change their negative  attitude towards VSLAs


Monitoring and Evaluation Plan:
The main monitoring and evaluation activities include;

  • - Baseline studies & mid-term review; Baseline information will be collected during the first two weeks of project implementation while mid-term review will be held after 5 months of project implementation.
  • - Field monitoring by donors, board and project staff; Field monitoring visits will be held at least once a month to track performance on the different indicators and to ensure that deviations are corrected early enough.
  • - Monthly technical and financial reports; The field loans officers shall collect the data from the VSLA groups and individual businesses and submit monthly report to the linkage officer.
    - The linkage officer shall compile, with support from project officer, monthly and narrative reports that shall be submitted to the project manager who will compile and submit monthly reports to EACI Board.
  • - End of project evaluation; The end of project evaluation will be conducted in the last month of project evaluation. The findings will be shared with stakeholders in the district and lessons learnt will inform scale-up activities and future design of similar projects.
  • - Photo and video reporting shall characterize this project.

Environmental Impacts:
Through this project, the identified VSLAs will be trained and equipped with skills in wet land management, waste management and environment conservation and established environment conservation structures in the communities will encourage the VSLAs in championing issues of environmental management in different communities. They will later on be linked to the district environment officers so that they can link up with the Government directly.

Sustainability:
Ensuring sustainability of interventions is one of the major goals in EACI’s strategic plan. To ensure that the services and benefits of EACIs program continue long after the funding has ceased, EACI plans to among others;

  • 1. Empower beneficiaries to own and manage the project interventions
  • 2. Develop and strengthen community structures
  • 3. Develop and maintain strategic partnership with financial institutions.

Beneficiary Empowerment: 
From the onset EACI’s strategy is to give responsibility to the beneficiaries to spearhead implementation of the proposed interventions. EACI will focus on transferring knowledge and skills, facilitating linkages, intermediating the supply of affordable savings, lobbying duty bearers to address the needs of beneficiaries.

Strengthening Community Structures:
Empowered Community-Based Structures are crucial for continuity of the interventions. For the EACI project the Village Agents (VAs), Community Based Trainers (CBTs), Saving Groups, Sub County Implementation Committees and EACI staff & management will closely work together. To ensure sustained delivery of services the CBTs and VAs will be selected from the communities where they will serve. The savings made by individual women will also be used to build their own revolving fund so that at the end of the project, women have enough savings base to lend out to group members.

Call On Donors:
Our intention is to start producing reusable pads locally in Kasese so that we save the many girls and women in Kasese District. We therefore request you to support this project.