Today We're at Mgama

Today we went out to Mgama.  Mgama is a “typical” rural village of about 1,200 (if you include the surrounding area it is closer to 2,500).  There is no power or water and cell phone coverage is spotty.  To get to Mgama you drive down the hill from Iringa, go west about 30 minutes then turn on a narrow and bumpy dirt road for another 30-40 minutes.  There are no banks or financial services in Mgama of any kind.

We got to Mgama about 9 for a 10:00 meeting so we could allow time for chai and mandazi, those square fried breads that visitors to Tanzania always seem to enjoy.  During our chai break,  Pastor Mgeyekwa told us about his parish.  There are about 900 members at ten preaching points.  His members earn about $300-400/year from agriculture.  Many of them are familiar with methods to improve their crops and their incomes, but there is just no capital available in the area.  This is why they are interested in joining Iringa Hope.

When the chairman, secretary, and treasurer of the local SACCOS (it does not yet have a name) joined us we talked a bit about their membership.  Currently they have 47 members – 21 men and 26 women.  This is an increase of 10 since they first started to get organized last year.  (See our blog 2012.)  They have saved 3,000,000 Tsc over the last year and have applied for registration.  In addition, their partner, St. Paul’s Lutheran in Stillwater MN, has donated 5,000,000 Tsc for them.  As a result they now have enough capital to complete their registration.  We will try to get this done in the next month or so.  (When the announcement of the donation from their partner parish was made to the group, it was acknowledged with applause and ululation – an audible expression of thankful hearts.)

As we talked the chairman apologized for making loans last December without being registered.  Instead of scolding him (as he expected) we congratulated him on his initiative.  They made a total of 16 loans, lending out all 3,000,000 Tsc that they had (they cannot access the other 5,000,000 until they are registered).  We looked over their loans and noticed that 2 were for school fees.  They were reminded that loans for anything that doesn’t produce an income is against the rules of their constitution.  The chairman apologized and promised that they would not do this again.  We also talked to the loan committee and told them it was their job to reject these applications.

Tom looked over the loan applications to see what the people of Mgama were doing and how much profit they expected to make.  Meanwhile Peter got a chance to give his first class to the other members who were here.  We delivered a safe for them, which brought lots of smiles, handshakes and “Asante sana safe”s.  Tom had to get in the last word so he told them that their job now was to fill it up.

We did a few interviews, but we could only ask about the expected profits on their first loan since the first round of loans was just issued in December and they won’t know the final results until June.  Still, we talked to three of the members of this SACCOS to see what they hoped to achieve.

Betha Sizya, 54, was a “typical” borrower that we met.  She is a widow with five children (all grown).  Three of her children completed Form 4 of secondary school (the equivalent of high school), but one of them only completed  Form 3 and another only Form 2 because she couldn’t afford school fees.  Betha borrowed 900,000 Tsc (about $550) and planted maize and tomatoes using the CVP methods.  She expects to earn a profit of 900,000 Tsc or more from this (the maize yields here are very variable due to the rains).

We also talked to Sada Mtenga and Nerika Gambi.  They were also planning to plant a mixture of maize and tomatoes and expected to earn over 900,000 Tsc.  Overall of the 14 real loans that were made here (the two loans made for school fees, not counting as “real loans”), 13 were for planting maize and/or tomatoes and 1 was for business.

Tom noticed that there was a huge difference in profit between maize and tomatoes.  The loans for maize were showing a $2-5 dollar profit for every dollar borrowed while the loans for tomatoes were only showing $1 for every dollar borrowed.  We asked why they bothered to plant tomatoes when they yield a lower profit than maize and were informed that they plant smaller amounts of tomatoes and irrigate those crops, so there is less risk involved. 

On our drive back to Iringa Town we didn’t run out of gas and the radiator didn’t overheat.  

Once you turn off the road you go about 30-40 minutes down a rutted, dirt pathway.

There is no electricity or water and the cell phone coverage is spotty here.

It was a smaller group.  Many of the members have jobs they go to during the weekdays.

Our intern Peter got to give his first lesson.

Betha Sizya, 54, was a “typical” borrower that we met.  She is a widow with five children.  She wants a loan so she can farm using the CVP methods.

We also talked with Sada Mtenga and Nerika Gambi (pictured here above and below).  They were very happy we had taken the time to come see them.  "Asante sana" they said over and over.

On our drive back to Iringa Town we didn’t run out of gas and the radiator didn’t overheat.