The first step in our process to select the women that are eligible for a microcredit is done together with a senior government official of the local community: the Village Executive Officer.
We work closely
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After that, our team takes care of the second step in our selection procedure, which is based on strict criteria. For example, women are not allowed to have other loans, a criminal record, or an addiction. In addition, we do not provide microcredits to the most deprived women, because they are focused on survival and not yet ready to start a business.
It is important that the women can clearly explain their idea for their business to our local Tanzanian team, and are willing to form part of a credit group.
Our procedures to help women
The training modules
The women that are selected for the microcredit receive basic training in entrepreneurship, financial accounting, family planning and domestic violence. In specific occasions there is a professional agricultural training. Our team in Tanzania actively monitors and coaches the women throughout the duration of their loan.
By offering these trainings, Pamoja Nguvu intends to help these women not only by having a strong foundation after repaying the loan, but also by enabling them to maintain their improved living standards in the future
The area in which we operate is the Meru District, an area roughly between the city of Arusha and Kilimanjaro Airport. It is a very varied landscape: from lush green fertile soil on the hills of Mount Meru to dry savannah. There are villages and markets where the women of Pamoja Nguvu work. A group of women who receive a loan from us always come from the same living and/or working area, so that they know each other. The social control helps us with the selection process and afterwards with the coaching and tracking of the repayments. We make women responsible for each other.
How our microcredit works
After successfully passing our selection procedures and completing the training modules we first help with setting up a local bank account. Weekly repayments are done by bank or payment by phone (Mpesa is a coming payment method in Tanzania). The loans are always free of interest. After six months the loan has to be fully repaid. For the second loan we handle a repayment period of 9 months, because this is a bigger loan
The women form a credit group of five people, one of which, the chairwoman, is in charge. The chairwoman supervises the weekly repayments and, if needed, supports with financial accounting. She is also the first point of contact for our project manager. Our Tanzanian team frequently visits the companies of the women and reports to the board in the Netherlands. They also coach the women to help make their company as successful as possible. In addition to the weekly meetings of the credit groups there are also larger meetings held, where all participants come together and share their learnings. Learning how to save, a very uncommon practice in Tanzania, is part of this.
After the repayment
Aside from repayment of the loan, important performance indicators for the success of our microcredit are also the degree to which the living circumstances and the daily disposable income improved. If the loan was successful, it is possible to receive a one-off funding for a new loan, provided there is a clear business plan. The same selection criteria apply; however, the repayments and financial accounting of the previous loan also need to have been performed in a proper way. In addition, the loaner needs to provide part of the requested amount herself. Subsequently, we offer the possibility to participate, for free, in an advanced entrepreneurship course.