Micro-Credit Day

Hello, Friends!

Hope everyone is doing well. I'm tired from staying up late last night to watch the Manchester United vs. Barcelona game with the ex-pat (motley) crew last night. David, my co-worker, told me to root for Barcelona, and they won two-nill. Coincidence? My host dad is a Man U fan though, as well as a lot of other Kakamegans, so he was disappointed with a capital D this morning. Hah! It's funny how much Kenyans follow UK footie. It was like the Superbowl for them.

It's unfortunate that I'm exhausted because Steve, the IGTS (Income Generation Training and Support) Coordinator and I have a full agenda today. We're going to visit existing loan clients in to see what they're up to (and hopefully collect some payments), do a needs assessment for a new women's group that wants to apply for a loan, and lastly, Steve is going to teach his weekly small business management class to about 15 'community learners'. After they finish the course, they'll have the opportunity to write a business plan and apply for a loan. Since funding is so limited this year, not many of them will get one.

Our loans are a little bit strange though—they're more grants than loans. Here's how it works for individual clients. We have four groups too, which I'll write about another time:

1. Applicants attend a once-a-week small business management class at one of our four community learning centres (CLCs) for 10 weeks. We use the classrooms after the regular students have gone home for the day. Steve covers topics like risk & reward, competition, bookkeeping and customer care.
2. At the end of the course, interested applicants fill out a business plan and loan request form. If the student doesn't speak English or can't write (yikes!), Steve translates and fills it out for them in English (All official business in Kenya is conducted in English).
3. An ACCES panel reviews the applications and short-lists the best ones. I think I'm going to be leaving Kenya right before this happens. Boo!! I’d really love to be part of it…
4. Steve visits the short-listed applicants' proposed business sites to check them out. For example, if someone wants to set up a kiosk to sell used shoes, he'll check out the site to see how much foot traffic it gets, if the people around seem like they have money to buy shoes, if there's secure storage, etc.
5. With the additional info from Steve's site visits, the panel decides whom to give the loan-grants to.
6. The recipient gets the money, and sets up their business. They have a one month grace period before they start paying it back.
7. The first repayment goes to ACCES to cover admin costs and the nine subsequent payments are made to KES, Kakamega Entrepreneurs Society. KES is a savings and credit co-op (SACCO) which we partner with. We are not licensed to make actual loans, so basically the client is putting money into a savings account (as far as I understand things.)
8. Steve visits each client every few months to see how they're doing: if they're making a profit, having problems and maybe reconcile their deposit receipts with the amount KES has down as them having deposited. KES keeps track of account balances on an Excel spreadsheet, so I’m sure mistakes are made.
9. In theory, the client "pays back" the rest of the balance over nine more months.
10. Once the client deposits 10,000 shillings (about $120) in their KES account, he or she gets to keep the money, and, in theory, use it to expand their business.

So I guess the point of giving our entrepreneurs "loans," then having them pay them back, then turning the money over to them at the end, is to (1) get them in the habit of saving/paying off a loan and (2) to establish a relationship with a SACCO to be able to take out real, bigger loans in the future.

It seemed pretty strange to me at first, because when you think about it, we’re basically giving out money. However, in light of the reduced funding at ACCES, as well as the dismal individual repayment rate of our clients, I think the IGTS program is headed toward providing loans vs. loan-grants for groups (since they do better repaying), and agricultural support for individuals. We’d subsidize individuals buying goats, chickens, banana plants, corn seeds and the like.

Switching from grants to loans will help a lot in terms of general program sustainability too. But it will mean we'll have to be a lot stricter on payment collection. (We're anything but strict right now.) And "real" loans will mean we'll have to introduce all sorts of complicated things like guarantors, collateral and default collections. Not fun. Or maybe we'll just do the small business training and support part and let an actual MFI handle the loan part.

Hugs,
Katy

P.S. Will has been home for a week now and is doing very well. Though his mom just left today to go back to NYC. ;-( Though it was so wonderful of her to stay as long as she did to provide moral support and home cooking. Anyway, drop by to say hello to Will if you're in the Los Feliz area.

P.P.S. I guess I should tell you how the teachers are doing on their reduced salaries — they're hanging in there. No one has quit yet. Many of them are taking loans from the teacher welfare group they're all members of to make ends meet for now. If you're the praying type, pray that our CIDA grant gets renewed!

Good News/Bad News

The Good News (there's a lot of it!!)

Will

Will's surgery last Friday went very well. The surgeon and laser surgeon guy (that's his technical title, by the way) were in and out in three hours. Since they warned us that if they ran into complications, it could take as many as 1o hours, three was great. So, Will is sore, and understandably not excited about still being in the hospital (it's been almost a month now), but is relieved that everything went OK. He has one more surgery, on Monday, and hopefully will be back home in Los Feliz on Tuesday.

After I got this great news on Saturday morning, I felt comfortable enough with Will's situation to head to the Kakamega Forest for the rest of the weekend. Along with Chelsea, a fellow FSD intern (who's going home on Saturday, sniff sniff!) and Carolyn, who is working for another scholarship organization in Kakamega, we stayed in Corey's little forest house. Corey is a primatologist friend of ours collecting data on two troops of monkeys for a Columbia study. So, the four of us had a lovely girls' weekend and Chelsea, Carolyn and I learned what it's like to be a biology researcher in the field. In a word, glamorous. Here are the pictures—we saw dozens of Blue and Colubus monkeys. The Village Troop was completely comfortable with humans and if we stayed in one place, would run all around us.

RAIN

The rains came back on Sunday night—Mother's Day. It's been raining every day since, and sometimes all night, too: maybe Mother Nature is playing catch-up for the week she missed. So, I'm glad the farmers are out of the woods for now. Still, don't forget when you're driving your SUV and running your AC all night that you're not just changing the climate at home, your changing it EVERYWHERE. And here, people don't have the ability to adapt to climate change as easily as we do... If it stops raining here, rest assured that people will starve. I would say just a small percentage actually has the money to think about irrigation...

ALEXANDER RYAN

Danielle & Phil had their baby on Tuesday!!! I am so excited and can't wait to meet him. Everyone seems to be doing well. Bummed that I have to be so far away at a special time. Can't believe Danielle didn't schedule her offspring around MY travel itinerary! :-)

The Bad News: The budget for the rest of 2009

At work, we got our final budget numbers from Canada on Monday and they're pretty rough. I guess our grant from CIDA ran out in March, and it's unclear whether we're going to have a new one... We'll find out in June or July. The part that was the hardest for me was the fact that we're cutting teacher's salaries from about half of what they were to 150 shillings ($1.20) a day. That's how much I paid the mason's assistant for the rainwater project. The mason himself got 300. But the teachers are college-educated, trained professionals. Here's about how far 150 shillings will take them (keep in mind they are not paid for holidays or vacations.)

Soda - 25 shillings on the street, 40 at a midrange restaurant
Beer in Kakamega - 100 shillings (cheaper in the villages)
Brunch at Golf Hotel, nicest place in town - 500 shillings
Roundtrip matatu ride to Kakamega from the schools - 100 to 160 shillings
1 kilo of ugali flour - 40 shillings
Firewood for a day - 35 shillings
Glass of fresh juice in Kakamege - 30 shillings
Malaria test - 75 shillings
Medicine to treat malaria - 800 shillings

I am deeply disturbed by the whole thing, knowing how hard these teachers work. True, some of them only stay in our non-formal schools for a year, until they can get job at a public or private school (better salary, benefits, and a longer contract,) but some of them do it for the love of the kids. I can only hope that most of them have spouses who are also working. I've been stressing out all week over what I can do, but feel pretty helpless. I figured it would take about $1,500 per month to keep the 40 teachers at their current salaries. Should I give them some of my savings? Or at least curtial my Tusker lager intake and donate the money instead? As much as my first instinct is to throw money at the problem, would making a donation to ACCES to help with teachers salaries be a sustainable solution? What would be a sustainable solution?

The teachers get the news late today at the annual teacher meeting at the offices. We'll see how they take it.

Rain, The Recession and Reagan Med Center

Today is a strange day.

First of all, the sky was hazy this morning on the way to work. Normally its clear and bright; I've not seen it like this before and it seems unnatural. It also hasn't rained in five days. The maize is starting to look a little lackluster. The word on the street is that it should rain EVERY day in the rainy season, with a break of one, or two days at the most. So this is irregular. Elizabeth's theory is that the rain patterns are changing because people have cut down so much of the Kakamega forest for firewood and settlements. My hunch is global warming may have a hand in it, too: the rains were pretty late this year. I've never paid so much attention to rainfall, but I've never lived in a agricultural community that doesn't use irrigation, either.

Second, the office is feeling very sedate today. We got word a few weeks ago that we'll have to cut our program budgets by 50%, and the reality of our new situation is sinking in. My understanding is that private donations from Canadians are down 30%, we will not be getting any of the usual grants (Rotary Club Canada, Wild Rose Foundation, etc.) that have been part of our annual budget for years, and CIDA (Canadian International Development Agency) may cut our funding for this year entirely, or if our grant is renewed, it will be for a reduced amount.The recession has caught up with Kenya.

Thus, no new scholarships for 2009 for orphaned or extremely needy students (normally we do two rounds of scholarship applications per year), no personal effects or school supplies this trimester (toilet paper, soap, toothpaste, maxi pads, pencil, 3 pens and some binder paper) for the the existing high school and technical school students we sponsor (we may even have to drop some of the students entirely), no medical camps, no staff training or development, some elementary teachers may be fired (which is crazy, because they're stretched thin as is), no 10 o'clock tea, no mandazi (fried dough) on Fridays and no new mirco-loans. Additionally, two vacant positions will not be filled and we are considering moving to smaller offices.

Also, we are all grounded from doing local travel to the Centres until the final, revised, halved budget is approved in Canada. So I haven't been able to go out with Steve to continue teaching English to the adult learners or to start meeting our five loan groups. I want to pay for Steve's transportation with my own money (a trip to the field on a matatu is only about 2 dollars), but that wouldn't be fair to everyone else who's had to stay put. So I'll wait. I guess I could also try to go out alone, but I need Steve's help in translating in Luhya and Swahili a lot..

So even though this is all pretty devastating (to the kids the most), Kenyans are generally an upbeat bunch, and my coworkers are making the best of it -- joking when they can and rolling with the punches. We'll come through it. We're looking for additional grant funding possibilities on-line and I'm even checking out Kiva which Audrey at CG turned me onto, to see if we can partner with them. I'm excited about the Kiva possibility and would be thrilled if it works out. When I get a job and have an income, I'll look forward to sponsoring an orphan's school fees.

And lastly, as a lot of you know, my boyfriend is at UCLA Reagan hospital right now undergoing a series of pretty involved surgeries for a bacterial infection (long story—he blogs about it here). Today, I am coming to understand the meaning of the phrase "worried sick": My thinking is foggy (more so than usual!), my stomach is in a knot, I feel warm, my temples are tight and I feel exhausted, even though I got an (almost) full night of sleep. Everyone's been really supportive of both me and him, but I sucks being half way across the world when you wish you were home. Don't worry though: I'll be OK, and more importantly, he'll be OK, but I will be happy, relieved, and grateful when this is over and he doesn't have to deal with being sick or in pain, constantly having blood drawn and tests done, having to decipher various medical opinions, being stuck in the hospital, having to deal with insurance crap, etc, etc!

And actually, in writing this post, I'm feeling better already... therapeutic blogging.

Love from Africa and thanks for your support,

Katy

Rainwater Harvesting Project photo album

I finished my FSD project! Though in the spirit of participatory community development, I should say, "The community finished its project, which I supported them in executing!" Which is the truth.

Here are the pictures. Hooray!

I originally scheduled two days of construction and it took seven. Typical. You should see my lessons learned document. If I wrote a "What I knew about rainwater harvesting systems going into this" doc, no doubt the lessons learned would be twice as long.

And yes, I know I didn't come here to do a water project, I came to do micro-credit and women's empowerment, but once I got here, I found that the greatest need in the community is water for our learning center school kids. Clean water will keep them healthy and able to avoid typhoid, diarrhea, cholera, etc. etc. If you want to see the grant proposal I wrote to FSD for the project (which took me a good week to put together!) I'd be happy to send it. I'm quite proud of it, and feel like I have a decent handle on grant writing now. When I get back and need a break from job searching day in and day out, I'd like to continue to try to write grants for ACCES.

Now to work on the micro-credit program, which will basically entail working with Steve (the micro-credit coordinator) on how to make the program viable, since our funding from Canada has been cut more than 50% in the last month. Oy.

Big hugs,
Katy