What do you do when your cooperative increases prices by four times? You start a micro-finance project, of course. And not just any micro-finance project: a program that creates the infrastructure for farmers to save money, and incentives them to put aside small amounts of money every other month, for years and years.
The following was written by Wafidi Ahmed, Project Coordinator:
IDA stands for Individual Development Accounts and the general idea is that you encourage people to save by matching the deposit. The ultimate goal is to save enough so we can build wealth through the acquisition of assets, such as land, farming equipment, and education. We decided to start the programme after talking with Ken Schultz, a lawyer and social worker in the United States, and Ben Corey-Moran of Thanksgiving Coffee, who supported the idea of a program that could teach financial literacy to the members and help them use their income to create wealth. For all of us, it seemed to be a perfect fit.
The Grow Through Savings Program, at this time, has 15 participants, who have opened savings accounts with Crane Bank located in Mbale, Uganda. The Bank offers a 14 percent interest rate on accounts per annum. The Bank also has agreed to hold financial literacy seminars for the participants. We had our first seminar on July 2, 2007, which was filmed by two people, who are doing a documentary on the Cooperative.
Every other month a participant is required to deposit $5 in his or her account every other month. Each $5 deposit is matched at a 1:1 rate. We opened accounts in fall of 2006 and we have had a 100 percent rate of success so far. The participants are very excited about the program and see how their money can grow through this program.
The purpose of the account is for the participants to acquire assets to help them expand the production of coffee and other cash crops or to put enough money away to help their children attend secondary education, which is not free in Uganda. Both assets are critical to build a better, more secure future. The program is also designed to provide us financial literacy so we can make better decisions with our money.
The participants include Muslims, Christians, and Jews. We require that at least 50 percent of the participants are women. We are very eager to expand educational opportunities for women because many women here are forced to leave school at a very young age to help out at home. This is a core goal of the IDA program. For us, education is a very important asset.
In order to grow, the “Grow Through Savings Program” needs additional revenue streams to supply the matching funds. Donations are being channeled through US-based Kulanu.org, and should be sent by check to:
Harriet Bograd, Treasurer
Kulanu, Inc
165 West End Ave, 3R
New York, NY 10023
***Please write “Uganda IDA program” in the comments field online or the memo field of the check.
