Friday, September 14, 2018

Our last visit was to Isimani (August 1)

The Isimani SACCOS was started in 2013 with 66 members. They now have 57 active members.  The membership consists of 35 women and 22 men.  17 officers and board members of the SACCOS and AMCOS were present. 
A total of TZS 49,200,000 (or about $21,800) was loaned last year.  Of this, 21,400,000 TZS was from Internal SACCOS funds and TZS 27,800,000 was from loans from the Iringa Hope Joint SACCOS.  A total of 33 loans were made.  The average loan was for TZS 1,490,000 (or about $660 per loan).  The loan repayments have already started and TZS 1,020,000 has been repaid to the Iringa Hope Joint SACCOS. 

The AMCOS was registered in 2018 and is a member of the Joint AMCOS.  There are 30 members of the AMCOS.  Of the 30 members, there are 13 men and 17 women. 

The AMCOS operates a five-acre farm.  The farm has three acres of maize and two acres of sunflowers.  An insufficient amount of fertilizer was used and only ten bags of maize were harvested from the three acres of maize. 

Venance Msigala gave a presentation on how the AMCOS and the SACCOS would work together.  Again there were many questions.  One of the AMCOS members asked about whether the SACCOS and AMCOS work separately?  Are they separate organizations, or do they work together?  Ascriti Msemwa, the Chairwoman of the SACCOS directed her answer to the member.  It was clear that she understands the organization very well.  It appeared that some of the misunderstanding is as a result of their AMCOS making loans of fertilizer, separate from the SACCOS. 

Sisto Uhagile, the Chairperson of the AMCOS said that the AMCOS members are new, so they are looking for direction.  They lack funds at this time.

Rinusi Ngoro, the Chair of the SACCOS loan committee, said that there had been problems with AMCOS members taking out loans for fertilizer from the AMCOS and not paying the money back.  He felt very strongly that all AMCOS members should also be members of the SACCOS, and take their loans from the AMCOS.

Consolata Mng`Ong`O, the Secretary of the SACCOS agreed that all AMCOS members must become members of the SACCOS.  Sisto Uhagile, the Chairman of the AMCOS stated that the AMCOS is new, and that the registration process should be stopped until all AMCOS members become members of the SACCOS.

There was another question about why members needed to pay for shares and fees in both the SACCOS and the AMCOS.  We responded that those are rules of the Tanzania Cooperatives Development Commission and not rules made up by our SACCOS and AMCOS.  Sisto Uhagile, the Chairman of the AMCOS stated that the members understand that they need to become members of the SACCOS, however they may not be able to pay for the fees and shares of both the SACCOS and the AMCOS at the same time. 

Peter Silayo asked what fertilizer members are using.  Ascriti Msemwa, the Chairwoman and Rinusi Ngoro, the Chair of the SACCOS loan committee responded that they use cow manure.  We are still working to help members recognize the value of using inorganic fertilizer with organic fertilizers such as cow manure. 

Rinusi Ngoro, the Chair of the SACCOS loan committee stated that they had previously bought from distribution and were promised low prices, but ended up with high prices for the supplies.  He said that if you want to help us, we need low prices for supplies. 

Ngoro went on to say that there is no market for their crops.  After further discussion, when members say that there is no market for their crops, they mean that when they want to sell their crops, middlemen do not show up in the village to buy their crops.  It does not mean that there is no market anywhere.  However it does mean that members need to find ways of transporting their crops to the location where buyers are located.  This is exactly the solution that the staff at Iringa Hope is proposing.  The staff is identifying buyers who buy regularly and reliably, and is developing plans for the AMCOS to arrange for contract trucking to collect the grain from villages and to deliver the grain to buyers. 

Having answered all the questions, we began our first interview with Sophia Chambo.  Sophia is 32 years old and has been a member of the AMCOS for one year.  She has three children.  Her children are two boys, 16 and 13 and one girl who is 10 years old. 
Sophia farms five acres of maize, sunflowers and groundnuts.  Of the five acres, two acres are owned and three acres are rented. 

So far, she has used local seed and has used manure as fertilizer.  She said that the AMCOS has been very helpful, helping her to understand better farming practices.  She intends to begin using hybrid seeds and organic fertilizer.  She says that she and her husband farm together and contract for the use of oxen to plow the land. 

Our next interview was with Rinusi Ngoro, who is also the Chair of the loan committee.  Rinusi is 52 years old and has been a member of the SACCOS for three years.  He farms 20 acres.  He raises 10 acres of maize and 10 acres of sunflowers.  He also has a shop, selling domestic supplies.  He has six children, two girls and four boys.  The children range in age from 32 years old to 11 years old. 

Rinusi’s first loan was for TZS 900,000 to purchase fertilizer and inventory for his shop.  The weather was not good that year and his income was TZS 500,000 from his maize and TZS 500,000 from his shop.  From this income, he repaid his loan and was left with TZS 100,000 of profit after repayment of his loan. 

He has savings of TZS 300,000, so the maximum loan he is able to obtain is TZS 900,000.  So his second loan was also TZS 900,000 to purchase DAP and CAN for four acres.  He used 35 bags of fertilizer for maize and 20 bags of fertilizer for sunflowers.  His income from farming was TZS 1,400,000 so his profit was TZS 500,000 (or about $221) after repaying his loan

His third loan was for TZS 900,000 again, for DAP and CAN fertilizer for his 10 acres of sunflowers.  His harvest is not yet complete, but he expects to harvest 35 bags of sunflowers. 

Rinusi explained that when he said there was no market, he really meant that no middlemen had come to the village.  He said that last year the price for sunflowers was TZS 50,000 per bag.  This year the price is TZS 35,000 per bag. 

He said that last year the price for maize was TZS 60,000 per bag.  This year the price is TZS 35,000 per bag. 

He said that the middlemen only show up when the price is low.  No middlemen show up when the price is high. 
He said that the original AMCOS is still in existence, but the repayment rate from their members is very slow. 

Rinusi said that his objective is to earn enough money to put his children through school, expand his shop business and to rent more land to expand his farming.

Thursday, September 13, 2018

At Tungamalinga (July 31)

Today we are at Tungamalenga.  This is my last week in Iringa, and we have a busy schedule of meetings.  Tungamalenga has registered their AMCOS with the commission and has joined the Joint AMCOS, so they are further ahead in their planning than some of the other villages.  The chairman of the SACCOS, Absalom, is also the Chairman of the Joint SACCOS. 

This SACCOS is a strong organization, with 63 members.  40 are men and 23 are women.  The AMCOS has 77 members.  40 are men and 37 are women.  The AMCOS members who are not members of the SACCOS yet are expected to join the SACCOS.

The amount loaned last year was TZS 55,000,000 (or about $24,000).  This amount was loaned to 42 members.  23 of these loans were to men and 19 were to women.  The average size of the loans was TZS 1,300,000 (or about $580). The funds loaned are made up of TZS 23,000,000 of internal SACCOS capital, and TZS 32,000,000 loaned from the Iringa Hope Joint SACCOS.

Loan repayments will take place from July 31 through August 15.  Paddy prices (Paddy is rice with the hulls on) are very low at this time, and some members are asking for rescheduling of their loans, but the expectation is that all loans will be repaid, although somewhat later. 

Venance Msigala presented the information about how the SACCOS and the AMCOS will work together.  Again, there were many questions.  One of the questions was that, since the Tungamalenga SACCOS serves members in villages that are far apart, the cost of a truck to pick up grain from the far away villages would be high.  We responded that it is up to the local AMCOS to determine the most cost effective means of getting their grain to a buyer.  We will assist them in locating the buyer that will be the most cost effective and we will assist them in identifying the most cost effective means of getting the crops to the buyer, but it will be up to the AMCOS and the Joint AMCOS to manage the process.

Another question that was asked was whether members can purchase supplies from the AMCOS by paying in cash.  This question has been asked a number of times in other villages.  There is not a problem with members paying cash for supplies, but in most cases, members will apply for loans because they don’t have the cash for the purchase of supplies. 

One of the AMCOS members asked whether they would borrow from the AMCOS or whether they would borrow from the SACCOS.  There continues to be some confusion, since, three years ago, the AMCOS bought fertilizer and provided it to members as a loan.  We responded that only the SACCOS made loans and the AMCOS only procured supplies, using funds from the SACCOS.

One of the AMCOS members stated that the SACCOS should not loan cash to members for supplies, because the member could take the cash and buy their supplies from a distributor, instead of buying through the AMCOS.  We responded that members would only want to buy their supplies through the AMCOS if the AMCOS can provide better pricing for the supplies than the distributors. 

Another question was asked about whether the AMCOS could purchase the machinery that removes the hull from paddy that converts paddy into rice.  The price for rice is about TZS 15,000 per bag higher than the price for paddy.  We responded that the economic analysis could be performed to determine what volume of paddy would need to be processed to pay for the machine with a reasonable payback period.  The AMCOS could consider doing this, but we should first plan to begin basic operations of purchasing supplies and marketing crops successfully. 

We asked whether any individual member or group of members might be willing to invest in the machine and start a business converting paddy into rice.  They responded that no member had the funds or would be willing to make the investment.

After the discussion, we held two interviews.  The first interview was with Msafiri Mwenga.  He is 36 years old.  He has been a member of the SACCOS for three years.   He is a member of the SACCOS, but not the AMCOS (He is planning on joining but has not yet done so.).  He is married with three children.  His children are a boy who is 10 years old, a girl who is 6 years old and a 1-year-old boy.  

Msafiri farms five acres of rice.  He grows a variety of rice called SARO 5, that should yield 30-40 bags per acre. 

His first loan was for TZS 600,000 to purchase 10 bags of Yara fertilizer.  His income was TZS 1,000,000 and so his profit after repaying the loan was TZS 400,000 (or about $180). 

His second loan was for TZS 300,000 to purchase five bags of fertilizer.  His income was TZS 450,000, and so his profit after repaying his loan was TZS 150,000. 

We asked why he decreased his purchases of fertilizer each year.  He responded that, in the first year, he borrowed as much as his savings allowed.  Following that year, the Iringa Hope SACCOS had only a few bags left over from the previous year, and the SACCOS had only purchased fertilizer from Yara for one year.  Then, instead of taking out a loan for as much as he needed, he only purchased the amount of fertilizer on hand.  He should have been using 3 bags of fertilizer per acre, which, for his farm would be 15 bags of fertilizer per year. 

His third loan was for TZS 120,000 to purchase two bags of fertilizer.  He has not yet harvested the rice, so he hasn’t yet recognized the income for this loan.

He wants to sell his crop as rice and not as paddy.  Last year, he took his paddy to a company in Iringa, Lufumbe Machine, to remove the hulls from the rice, so he could then sell it as rice, at a higher profit. 

Msafiri is building a house with his profits.

Our next interview was with Silivia Kabwa.  Silivia is 38 years old and has been a member of the SACCOS and the AMCOS for 4 years.  She has four children.  The children are 3 girls and 1 boy.  The boy is 16 years old and the girls are 12 years, 7 years and 2 months old.

Silivia farms six acres.  Four acres are in rice and two acres in maize.  She also has a shop where she sells domestic supplies such as cooking oil.  Her first loan was for TZS 300,000 for buying 12 bags of fertilizer, used only for the rice.  She earned TZS 900,000, so her profit after repaying her loan was TZS 600,000 (or about $265).

Her second loan was for TZS 600,000.  She used the loan to purchase 12 bags of Yara fertilizer from the AMCOS, and to pay laborers.  She earned TZS 1,300,000, so her profit after repaying her loan was TZS 700,000 (or about $310).

Her third loan was for TZS 1,000,000.  She has not yet harvested the crop, so she hasn’t recognized the income for this year yet. 

Her yield from her rice farm is increasing, and she is investing her profits into growing her business at her domestic shop and she is spending her profits to send her children to school.

After our interviews, Absalom Kilipamwambu, who is the Chairman of the SACCOS and the Chairman of the Joint SACCOS, wanted to show us the storage facilities in the area, where farmers are storing their rice production after harvest.  Tungamalenga has an Integrated Development Center with a warehouse, however the warehouse has already been filled with bags of rice.  They could use a warehouse several times larger.  The members anticipate
higher prices that will be available several months after harvest time.  We walked across a field to view a building that was built by the government in 2017.  The building has a capacity of 5,000 bags of rice and currently has about 3,000 bags of rice in storage. 

Absalom explain the need for additional storage to Venance Msigala and Deborah Siekman.

Having completed our interviews and the tour, we head back to town.

Tuesday, August 7, 2018

Off to Kitesengwa and Ifuna


Our next visit was to Kitisengwa.  The Chairman opened the meeting by saying that the SACCOS had dropped many members because they were not repaying their loans.  They had to take these members to court to get the loans repaid.  Once the loans had been repaid, they dropped the members from membership.  A number of these members had petitioned to rejoin the SACCOS but had been refused. 

The number of members is now at 17.  There previously had been 40 members.  Of the 40 members, 20 had been men and 20 had been women.  For the last year TZS 5,500,000 had been loaned.  There were 15 loans made.  So the average loan was TZS 367,000 (or about $162). 

The Chairman explained that members thought that the money was a donation and didn’t need to be repaid.  The officers referred the issue to the police and the members finally repaid the amounts that they owed.  Then many members decided that they didn’t want to belong to the SACCOS if there wasn’t free money available. 

Before this village could consider developing an AMCOS, they needed to bring their membership to at least 20.  Therefore our discussion of how an AMCOS and a SACCOS work together was shorter than usual. 

There was a concern that NMB Bank’s charges for savings were too high.  Peter Silayo called CRDB Bank and was told that there would be no charges for the account of an organization such as a SACCOS, so he recommended that they move their account from NMB to CRDB.

The Chairman asked Peter to read a letter from Social Security.  They wanted to train officers of the SACCOS.  There was a question whether their response needed to be signed by four officers of the SACCOS.  After the meeting I asked Peter whether these requests were unusual.  Peter responded that SACCOS members trust the counsel of the Iringa Hope staff, and sometimes they are asked questions about things that are not necessarily related to the SACCOS.

We then went on to have two interviews.  Our first interview was with Hezron Ng`Alla.  Hezron is 40 years old and he has been a member of the SACCOS for three years.  He is married with four children.  He has two girls who are twins and 13 years old, and two boys, who are 7 and 3 years old. 

Hezron farms 4 acres.  2 acres are in maize and 2 acres are in vegetables.  Among the vegetables that he raises are Chinese cabbage, spinach, tomatoes, green peppers, and carrots. 

Hezron’s first loan was for TZS 200,000 to buy 3 bags of fertilizer that he used on both the vegetables and maize.  His income was TZS 1,400,000.  After repayment of the loan, his profit was TZS 1,200,000 (or about $530).  The income was from selling 8 bags of maize at TZS 35,000 per bag and from selling the vegetables in the market.  Some of the maize was kept for his family’s own use. 

His second loan was for TZS 300,000.  He purchased fertilizer for maize and vegetable farming.  His income was only TZS 600,000 this year.  Because of the weather, his crops were not very productive.  After repayment of the loan, his profit was TZS 300,000 (or about $132).

His third loan was for TZS 600,000.  He hasn’t yet finished the harvest of his crops from this loan, so he hasn’t yet received the income from his third loan.

He has received his income from selling maize to the middlemen who come to the village and he sells his vegetables in the town market. 

With the profits that he has taken, he is sending his children to school and he has built his own house.  For the members who we have interviewed, we find that, at the top of the list of priorities is always:  Sending their children to school.  Education is always very important.

Our second interview is with Dominica Ngeng’ena.  Dominica is 35 years old and she has been a member of the SACCOS for 4 years.  She has 2 children.  The children are two boys, ages 15 and 10.  Dominica farms 3 acres of maize.   She also owns a business of buying and selling clothing in Kitisengwa and in the surrounding villages. 

Her first loan was for TZS 300,000.  She used the money for the loan to purchase 3 bags of fertilizer for the maize and she purchased clothing inventory for her shop.  Her income for the year was TZS 450,000.  Her profit after repayment of the loan was TZS 150,000 (or about $66).

Her second loan was for TZS 350,000 for fertilizer and more inventory for her shop.  She hasn’t yet sold her maize and so she hasn’t recognized the income for the year yet. 

She says that she has used the profits from her loans to send her children to school.  Her future objectives are to continue to expand her clothing business and to purchase more land for her farming. 
Dominica said that she purchased 3 bags of fertilizer for use on 3 acres of maize.  Best farming practices would normally require the use of three 50 Kg bags of fertilizer per acre.  So, instead of 3   This is typical of many farmers.  They use less fertilizer than they should or no fertilizer at all.  This is because of what they can afford or because they don’t understand what is needed for the best yields. 
bags of fertilizer, Dominica should have used a total of 9 bags of fertilizer for 3 acres.

We now continue on to the village of Ifunda. 


The Ifunda SACCOS was registered in 2015, so they have completed their third round of loans.  They currently have 58 members.  Of these members, 22 are men and 36 are women.  23 members received loans this year.  Of the members who received loans, 12 were women and 11 were men.  Some members did not qualify for loans because their repayments were late, and some members chose not to take loans.

The total amount of loans made was TZS 29,730,000.  Of this,
TZS 18,000,000 was from a loan from the Iringa Hope Joint SACCOS, and the remaining funds were from the internal funds of the Ifunda SACCOS.  The average amount of the loans for each member was TZS 1,293,000 (or about $570).  Members have already begun repaying loans and the SACCOS will soon begin repaying the Iringa Hope Joint SACCOS loan.

Venance gave the presentation of how the AMCOS and the SACCOS will interact.  There were not a lot of questions.  The Chairman of the loan committee said that he looks forward to the use of the AMCOS.  Farming inputs are very expensive and he looks forward to purchasing inputs through the AMCOS.

 The SACCOS Chairman recognizes the benefit of the AMCOS.  He intends to call a general meeting of the members next month to vote on proceeding to form an AMCOS.

We held one interview at Ifunda.  Our interview was with Atwasye Mlowe.  She is 43 years old and has been a member of the SACCOS for 3 years.  She is married and has 4 children.  Her children are 4 sons, ages 21, 18, 13, and 9 years old.  She farms 3 acres.  She raises 2 acres of maize, 1 acre of potatoes, and she raises chickens. 

Her first loan was for TZS 500,000 to purchase 4 bags of fertilizer.  She used 2 bags of fertilizer for her maize and 2 bags of fertilizer for her potatoes.  Her income from 25 bags of potatoes was TZS 1,700,000 and her income from 30 bags of maize was TZS 350,000.  This amount was her total sales after subtracting the maize and potatoes that she used for her own family.  Her total income for the year was TZS 2,050,000.  After repayment of her loan, her profit for the year was TZS 1,550,000 (or about $685). 

 Her second loan was for TZS 1,500,000 for fertilizer, sprays and irrigation costs for her potatoes.  She purchased four bags of fertilizer.  Her income was
TZS 2,700,000.  After repayment of her loan, her income was TZS 1,200,000 (or about $530).

She said that she sells her potatoes and her maize to middle men that come through the village.  She said that she sold her maize last year for TZS 40,000 per bag.  This was at a time when the market price for maize in Iringa was about TZS 60,000 per bag.  Hopefully we can get better prices for our farmers by organizing to sell directly to buyers, through the AMCOS.

Atwasye is currently buying chickens, raising them and selling the chickens.  She currently has 50 chickens.  She plans to have 250 chickens by October.  Her future plans are to raise 1,000 chickens at a time. 

She has used her profits to grow her chicken business and to send her children to school.  Her oldest son is currently studying at Tumaini University in Arusha.  Atwasye had been successful in growing her income for the benefit of her family through the use of access to credit.

Sunday, July 29, 2018

Our last meeting of the week is at Kiponzelo.  When we arrive, we find that there is a large meeting of the Chama Cha Mapinduzi (CCM) meaning “The Party of the Revolution.”  CCM is the dominant ruling party in Tanzania and the longest-ruling party in Africa.  This is the party of the President, John Pombe Magufuli, who was elected in 2016.  Many of the members of our SACCOS are also important members of the CCM and are attending the meeting.  Elections are coming up and are scheduled for August 12.  As we drive around we see the green flag of the CCM flying at many village locations.

There are only four members that show up for our meeting.  The Secretary
of the SACCOS opens the meeting.  Partway through the meeting, the Chairman of the SACCOS stops in at the meeting.  Peter Silayo steps outside to speak with him.  The Chairman said that he apologized for not attending the meeting, but he and the Board of Directors discussed this before the meeting.  He said that he would be well represented by the Secretary and three members of the Board of Directors of the SACCOS, and that the members attending our meeting would brief the rest of the officers and board members later in the day.

This meeting was smaller than normal.  However our meetings are never too large since only the officers and the board members of the SACCOS, and of the AMCOS attend the meetings, if an AMCOS has been organized.

The Secretary reports that the SACCOS has 94 members of which 48 are men and 46 are women.  The SACCOS has TZS 7,900,000 in purchased shares and TZS 14,000,000 in member savings for a total of TZS 21,900,000 in total capital (or about $9,700).  The SACCOS has an additional loan from the Joint SACCOS of TZS 45,000,000 (or about $19,900).  The SACCOS has started to pay back the loan and has TZS 28,000,000 remaining on the loan.  The SACCOS made 49 loans for a total of TZS 45,000,000 loaned (or about $406 per loan).

The AMCOS was getting organized and had more than 20 members, the required number to become registered as an AMCOS.  The members were ready, but the harvest was not good and they stopped working on the AMCOS because the members did not have the funds to purchase the shares and the entrance fee required by the AMCOS.  However they now have 20 members and they are ready to move ahead with the registration.  They plan to have a vote for officers and a board of directors and to move ahead with the AMCOS.

One of the members stated that when he orders fertilizer from distributors, sometimes he gets “Fake fertilizer.”  Members at other villages said that the distributors re-bag the fertilizer and put filer material in with the fertilizer.  Without being there, it is difficult to know what is actually happening.  If other best farming practices were not used, or if there wasn’t enough rainfall, it would be easy to blame poor yields on bad fertilizer.  However he said that he trusts Iringa Hope to ensure that members receive the correct product that they ordered.

The Secretary said that so much is changing in marketing, if Iringa Hope could help, they would be grateful.  I asked him to elaborate.  He said that members sell to the first “Middleman” who shows up to pick up their maize.  He said that some members were paid TZS 25,000 per bag of maize, when the price of maize at other buyers in Iringa was between TZS 33,000 and TZS 38,000.  Other members said that the middlemen only show up when the price is low.  They don’t show up when the price is high.  When the cost of production is high, it is difficult to make a profit at those prices.

Venance described the forecast sheet that we provided to them that lists the products and the varieties of supplies that we would like a forecast for.  The Secretary said that he would return the forecast to us on Monday or Tuesday of the next week.

As we wound up the discussion of how the SACCOS and the AMCOS work together, one of the members thanked us for what we are doing.  He said that they would look forward to having an Integrated Development Center built in their village.  They would look forward to having warehouse space available in the village in a secure building.

Our first interview in Kiponzelo was with Sophia Kuwoko.  Sophia is 36 years old and is a member of the Board of Directors of the SACCOS.  She has been a member of the SACCOS for four years.  She is married and has one son, who is 14 years old.
She has a farm of two acres and she raises potatoes and maize.

Her first loan was for TZS 500,000 to purchase two bags each for DAP and Urea fertilizer and hybrid seed for her one acre of maize.  She said that she bought the seed from a distributor and that the seed was number 6229, but she didn’t know what brand it was.  She made income of TZS 820,000 and so she obtained a profit of TZS 320,000 (or about $141) after the loan was repaid.

Her second loan was for TZS 750,000 for fertilizer and seed for her potatoes.  She purchased DAP + CAN + SA (Sulphate of Ammonia).  She obtained 30 bags of potatoes from her one acre of potatoes, which she sold for TZS 40,000 per bag for total income of TZS 1,200,000.  Her profit after repaying the loan was TZS 450,000 (or about $200).

She reported that she sold the maize to Musoma Foods for TZS 410/Kg.  This was last fall and the price paid was probably consistent with market pricing at that time.  We should contact Musoma Foods as a potential market buyer for our members’ maize.

Sophia reported that she will be using her profits to send her son to school.  She said that she also wants to start a small business opening a shop as a restaurant.

Our second interview was with Samora Kihongo.  Samora is 40 years old and has been a member of the SACCOS for five years.  He is married and has four children; three daughters and one son.  The children are 15, 13, 10 and 3 years old.

He has a business cutting and selling wood and farming.  He owns four acres and he raises maize and
potatoes.  Prior to this year, he used his own capital.  His first loan was this year for TZS 2,100,000 (or about $930).  He has used his loan to purchase trees to cut and sell for firewood and to purchase fertilizer and seed for maize and potatoes.  He buys trees for TZS 3,000 per tree and sells the wood for about TZS 7,000 per tree.  So far he has purchased and sold twenty trees this year.   He has not yet sold his maize and potatoes, so he has not yet recognized his income for the year.

In the past, he sold maize to the middlemen that came to the village.  The current price offered has been between TZS 30,000 and TZS 35,000 per bag.  This is on the low end of market prices.

When he was using his own capital, there were gaps when he didn’t have the cash that he needed to purchase trees.  Since he has obtained a loan, there are now no gaps in his available funds so that he can continually purchase trees.

He has been using his profits to send his children to school and he intends to purchase a chain saw for his business.

Saturday, July 28, 2018

Visiting Bomalang ‘ombe

The trip from Iringa to Bomalang ‘ombe is about a two hour drive.  It starts out on a paved road, then shortly turns into a rough gravel road, and then, for about the last 45 minutes of the drive, it is a hard packed narrow dirt road with deep ruts cutting across the road.  During the rainy season, the rain washes deep ruts in the road that stay there for the remainder of the year.  We are told that the road is re-graded every year, but we saw no evidence of the re-grading.

The Chairperson of the SACCOS began the meeting with introductions, then we quickly moved into the reports of the progress of the SACCOS.  The SACCOS has 56 members, of which 24 are women and 32 are men.  All are members of the AMCOS.

There are eleven members attending the meeting today.  All are either officers or members of the board of the SACCOS or the AMCOS.  In addition the Pastor of the local parish is attending. 

The SACCOS has TZS 5,000,000 in internal capital.  They borrowed
TZS 10,000,000 from the Joint SACCOS.  Of this, TZS 1,000,000 remained in the bank and TZS 14,000,000 (about $6,200) was loaned to the members.  There were 34 loans taken out for an average value of $182 per loan.

Of the above loans, some loans were taken in cash and some loans were taken in farming inputs, such as fertilizer.  The members paid interest on the loan of the value of the fertilizer, procured by the SACCOS.
Yari Kimata, who we later interviewed, said that he previously didn’t understand the benefits of having an Iringa Hope AMCOS, but now he is glad we are there to explain how the AMCOS and the SACCOS can work together.  He said that he thinks that they will be able to move ahead rapidly and perhaps have their AMCOS registered in August.

When Venance began explaining how the AMCOS and the SACCOS will work together, as in meetings in other villages, there was a lot of discussion and many questions.  Today, our meeting in Bomalang ‘ombe was no exception.  There was a question about how does an AMCOS survive, when all the capital is in the SACCOS.  This is an important issue for members to understand.  Because the AMCOS purchases farming inputs direct from the suppliers, the AMCOS obtains better pricing than the members are able to obtain when they purchase supplies from distributors.  The expenses of the AMCOS and the Joint AMCOS are recovered by a small mark up applied to the supplies purchased and the members are still able to obtain the supplies at a lower price that they otherwise would have paid.

Another member asked about how much interest will the SACCOS charge to the AMCOS.  This is another good question because it is important for members to understand that the SACCOS charges interest to members who take out loans, whether in cash or in vouchers for farming inputs.  The AMCOS manages the transactions and takes cash from the SACCOS and carries out the purchases at the members’ direction.  Therefore, the member pays interest, not the AMCOS.

Another member stated that the distributors are always late coming to the village.  If we make it clear that farming inputs such as seed and fertilizer will be delivered on time for planting, non-members will want to buy from the AMCOS and, very likely will want to join the AMCOS.

Last year, the SACCOS purchased fertilizer for members in lieu of cash given to the members as loans, and the members paid back the loans, as if they had been given cash.  The SACCOS Treasurer said that, due to complications in the past, we should implement the AMCOS and let the AMCOS purchase the farming inputs for the members and let the SACCOS focus on granting Micro Finance loans.

The Chairman of the SACCOS shared his concern about the quality of the fertilizer that had, in the past, been purchased.  Fertilizer had been delivered, but it was the wrong type, meant to be used on other crops.  It was delivered late.  It was probably fertilizer that was left over from last year and was re-sold this year.  The fertilizer was hard and had hard lumps of fertilizer that made it difficult to use. 

The Treasurer said that fields in Bomalang ‘ombe are being prepared now for planting in August.  Can we get fertilizer and seed forecasted now and ordered for delivery in August?  Apparently for the soil conditions in Bomalang “ombe, potatoes can be planted three times per year and farming inputs are needed for planting in August. 

Yari Kimata said that the loans from the Joint SACCOS that were received and loaned to members from last October have not yet been re-paid, but funds are needed to loan to members for planting in August.  Apparently since planting can take place on a year round basis at this location, Bomalang ‘ombe may need additional consulting on how to manage this year round loan process.

The Pastor thanked us for bringing the AMCOS information to them and asked us to thank the Joint AMCOS for what they do.  He also said that he wants us to go to the Yara Fertilizer warehouse when they will be shipping bags of fertilizer to Bomalang ‘ombe to ensure that their shipments are correct and he would like us to stamp the bags with an Iringa Hope stamp to assure that it is the correct fertilizer.

The Chairman of the SACCOS said that people are used to selling maize.  Have we thought about marketing other crops?  Since this is an area that also raises potatoes, Venance responded that we should consider the marketing of potatoes.  Potatoes can only be stored for about a month, so, since they are perishable, they are not candidates for storage in the IDC warehouse. 

The Chairman said that they are looking for sources for seed potatoes.  He said that it would be helpful to receive recommendations of varieties that would be best for the soils and climate of Bomalang “ombe.  Venance said that it would be important to have all the farmers growing the varieties that the buyers wanted. 

The Chairman of the AMCOS said that using the AMCOS to organize the collection of Potatoes to a central location for selling is a function that the AMCOS could do very well.

Since some of the members were sitting in front of a window, it was difficult to take a photo because of the glare.  We suggested that we all move outdoors in the sunshine to take a group photo. 

Our first interview today was Zaina Luhwago.  She is 50 years old.  She has been a member of the SACCOS for four years and serves as the Secretary of the SACCOS.  She has four children; one son and three daughters.  Her three daughters are 30, 23 and16 years old.  Her son is 10. 

Zaina raised one acre of potatoes.  For her first loan, she took out TZS 495,000 for fertilizer and for hired labor to raise the potatoes.  She was received income of TZS 1,495,000 and was able to obtain a profit of TZS 1,000,000 (about $440) after repaying the loan.  From the profit, she has been able to purchase school uniforms and send the children to school.  She was also able to wire her home and connect it to electricity.

Her second loan was for TZS 350,000.  She rented an additional ½ acre and is raising one acre of maize and ½ acre of potatoes.  The loan enabled her to purchase seed and fertilizer for the maize and potatoes.  She has not yet harvested the potatoes or the maize, so she hasn’t yet recognized her income.

She intends to use her profit from this loan to continue to send her children to school, and increase her savings so that she can borrow more.  (The SACCOS requires members to have 1/3 of the value of their loan in savings at the SACCOS.)  She also plans to purchase more land.

Zaina says that the SACCOS has made a difference in her life.  She is happy.

As she is leaving, Zaina tells us that she is Itiweni’s sister.  Itiweni, our Senior Manager of Iringa Hope is originally from Bomalang ‘ombe.  Later, Itiweni informs us that in Tanzania, all of your cousins are called sisters. 

Our next interview is with Yari Kimata.  Yari is 33 years old, is married and has one son, 10 years old.  He has been a member of the SACCOS for four years, and is now a member of the board of directors of the SACCOS.  Yari owns and manages a shop where he sells the things that are needed in the village, such as soda, flour, rice, cooking oils and any kind of domestic supplies.  He has had the shop for five years. 

He has used his profits to pay for his son’s school uniforms and primary school fees and to connect his home to the local electric lines.  In the future, he plans to use his profits to increase his savings and to increase his loans, and to buy land for a shamba (a small farm) and to hire laborers to help him to run the farm.

He said that the SACCOS is known by many people in town and more non-members are talking about wanting to become members.

Thursday, July 26, 2018

At Kilolo

Kilolo is about an hour from Iringa.  They have heard about the AMCOS from listening to Radio Furaha and were eager to hear about it.  They had been organized as a local group for lending to each other, and have only been registered as an Iringa Hope SACCOS for one year, since June 12, 2017.  There are seven officers and board members and the Pastor of the congregation present for the meeting.  The Pastor has been a strong supporter of the SACCOS and, after hearing about the AMCOS was very interested in hearing more about it. 

When the Iringa Hope SACCOS started one year ago, it had 19 members.  It now has 43 members.  The members are engaged in farming, fishing or in small businesses. 

The SACCOS has local loan capital of TZS 653,000 (or about $300).  They borrowed another TZS 14,790,000 (or about $6,500) from the Joint SACCOS.  This combined amount of loan capital was loaned to 24 members.  This resulted total loans of TZS 15,443,000 (or about $284 per loan).  The interest that this SACCOS has been charging is 2% per month.

Venance Msigala presented a discussion of how the AMCOS would work with the SACCOS.  There were a number of very good questions asked.  Pastor Lubava stated that he likes the idea of an AMCOS.  He said that the planting season is coming soon, and asked how their group could purchase supplies for the planting season.  Peter Silayo said that their SACCOS could purchase supplies from the Joint AMCOS.

A question was asked about what the price difference would be between the AMCOS and distributors.  We responded that the AMCOS prices should be better that the prices from the distributors, because the Joint AMCOS would be purchasing supplies direct from the suppliers.  In addition to the reasonable prices, AMCOS members would also be receiving better quality inputs and would be receiving the inputs on time for planting season. 

Venance passed out a form that requested a forecast of farming input supplies that would be needed by AMCOS members.  This form is important because the Joint AMCOS will need to know the quantity of supplies that will need to be ordered from suppliers.  A question was asked why the form only listed one fertilizer supplier’s products?  We responded that Yara Fertilizer was the fertilizer company that most members preferred.  However if there were another fertilizer supplier that this group preferred, we would also include that company’s products in the Joint AMCOS orders.  However we may not be able to obtain a significant price discount for small quantities. 

Another question was asked regarding bean seeds.  Farmers have stated that the bean seeds are not always available at planting time.  So farmers have planted the seed left over from last year’s harvest. As a result, yields have been decreasing.  This question was also brought up in other meetings.  We responded that we would investigate other sources of bean seeds for AMCOS members. 

Another question was asked about the interest that would be charged for loans from the SACCOS for inputs.  We responded that the interest on loans from the SACCOS to purchase farming inputs should be the same as that charged by the SACCOS for any other business purposes.

A question was then asked about when loans for farming inputs to be purchased from the AMCOS would need to be repaid.  We responded that these loans would need to be repaid on a schedule that was similar to any other loans from the SACCOS.  They would need to be repaid after the harvest, just like any other loan for the purchase of farming inputs.

A question was asked about the requirements for when an application to the Joint AMCOS could be made.  We explained the requirements for an entrance fee and for the purchase of shares by the members.  We also stated that the group would need to have a vote to form an AMCOS by at least twenty members and then the AMCOS group would need to request an officer from the Cooperatives Commission from the Kilolo district to come to meet with the group and give them training.  The Chairman of the SACCOS responded that they are planning to hold a meeting by the end of the month to vote to start the process.

All of the questions were answered so we then held two interviews with SACCOS members.  Our fist interview was with Mariam Lubava.  Mariam is 22 years old and single.  She was a member of the SACCOS when it was registered, one year ago.  She was also a member of the local SACCOS group for two years before they formed the Iringa Hope SACCOS.  She is now the Treasurer for the SACCOS.

Mariam owns a shop where she sells cereal products such as rice and maize, cooking oils, sugar and other cooking supplies.  She purchases these supplies in Iringa shops and resells the products in her Kilolo shop to local customers. 

Her first loan from the local SACCOS was for TZS 300,000 to purchase supplies to sell in her shop.  Her income from the loan was TZS 400,000 for a profit after repaying the loan of TZS 100,000. 

Her second loan was for TZS 300,000 again.  Her income from the shop was TZS 470,000 for a profit after repaying the loan of TZS 170,000. 

Her third loan, this time from the Iringa Hope SACCOS was for TZS 600,000.  In addition she reinvested the TZS 170,000 profit from the previous year in her business.  She hasn’t yet recognized the income for the full year from her shop, but she says that her revenue is continuing to grow. 

Her objective is to be a big business woman in the town of Kilolo.  She intends to expand her shop to sell to local customers in town.  In addition she plans to distribute products for sale to other shops in the surrounding villages. 

Mariam says that she is glad that the Iringa Hope SACCOS is a continuing program.  She says that the SACCOS is enabling her to continue to grow her income and she sees more growth in economic activity in Kilolo because of the SACCOS.

Our second interview is with the Evangelist, Abilada Kikoti, who is a member of the SACCOS.  He is an Evangelist at the nearby preaching point at Amani.  He is 56 years old, is married and has eight children, six daughters and two sons.  They range in age from 30 years old to two 10-year-old twins.

Abilada has a business selling charcoal, and farming two acres of maize and beans.  He raises the maize and beans for his own use. 

He has also been a member of the local SACCOS for one year and a member of the Iringa Hope SACCOS for one year.  His first loan from the local SACCOS was for TZS 300,000 for his charcoal business.  He generated income of TZS 380,000 for a profit, after his loan repayment, of TZS 80,000. 

His second loan, from the Iringa Hope SACCOS was for TZS 450,000.  He hasn’t yet recognized the income for the full year, but says that his business is growing. 

His objective is to continue to grow his charcoal business, and to buy an additional four acres of land for raising crops.  He intends to hire laborers to help him to farm the land.  He says that the SACCOS is not only helping him, but also his whole family.  He has been able to send his children to school and to provide better food at home. 

We will be interested to hear how his plans develop and how he is able to continue to increase his income.

After the interviews are over, we say goodbye to the members still near the church and we head back to Iringa.