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.

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.

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.

Ukwega and Ipalamwa

Ukwega

This morning we had wanted to start at 8:00 A.M.  However we found that we had a flat tire that needed to be repaired.  It took about an hour, so we didn’t get started until 9:00 A.M.

Ukwega is about a two-hour drive from Iringa, so we arrived around 11:00 A.M.  The scenery is beautiful.  The last portion of the drive is along a ridge line.  Venance Msigala estimates that we are at about 6,000 feet in altitude.  As we drive, we see many scenic views of the valleys below.  We also note how maize is grown on steep hillsides to take advantage of all of the crop-growing land possible.  There are also beans, bananas and pyrethrum grown in this area.  Pyrethre flowers, when dried, are used to produce pyrethrum, a natural insecticide.

When we start the meeting, there are fourteen officers, board members and members of both the SACCOS and the AMCOS present.  It is reported that there are 83 members of the SACCOS including 15 women and 68 men.  Of these, 50 are also members of the AMCOS, including 12 women and 38 men. 

They have submitted the paperwork for registration with the government, but they have not yet received their certificate of registration.  Venance Msigala will follow up with the Tanzania Cooperatives Development Commission to follow the paperwork. 

We then proceeded to begin our presentation on how the AMCOS will interact with the SACCOS.  Again there were many questions and lengthy discussions.   One of the questions that have been asked many times previously was whether the AMCOS could consider selling supplies to non-members.  We replied that it is up to the local AMCOS members.  However the prices to non-members will be higher than the prices given to members. 

Another question was asked about whether there were guidelines regarding how large of a loan is given to members.  We responded that the loan process for providing loans to members for the purchase of supplies from the AMCOS is different in that, when the loan is approved, the member is given a voucher for the amount of the supplies for which his loan is authorized.  Otherwise, the procedure for granting loans should be the same as before the AMCOS was in place.  All decisions on loans are up to the judgment of the loan approval committee.

There was a question about the cost of supplies.  In 2016, when members took out loans for supplies, the interest charged by the Joint SACCOS for capital loaned by the Joint SACCOS to the SACCOS was 15%.  This interest was then charged to the SACCOS member who was purchasing the supplies.  Jeff Duma then placed the order for the fertilizer.  There was a concern that with our discount plan, the price for fertilizer would be higher than previously charged.  We responded that the current plan is different than what was done in 2016. However, because we are dealing directly with suppliers, the prices that members pay should be less than the prices charged by distributors or other middlemen.

There was a concern that all supplies would need to be delivered to the village before the rains begin.  In this area, once the rains begin, it would be difficult for delivery trucks to reach the village.  We said that our timeline plan is that all deliveries should be made by October 1.  Members agreed that delivery by that date should be sufficient. 

There was a discussion about the One Acre Fund.  The One Acre Fund (1AF) supplies fertilizer to farmers at the beginning of planting season, on a loan basis.  The terms of the loan are that 1AF expects loan repayment on a regular basis immediately upon the granting of the loan.  Members reported that 1AF provided soil testing and provided Urea + DAP + NPK fertilizer to the farmers.  Members reported that the crops did very well.  However Urea + DAP will cause the soil to become even more acidic.  This is a problem at the high altitude areas.  In a later meeting we discussed this with Yara Fertilizer representatives.  We believe that we can provide farmers with better solutions.

Members reported that bean seeds were not available for planting.  Most farmers use seed left over from last year’s crop.  They have perceived that, as a result, their yields have been decreasing.  We suggested that Venance Msigala should investigate this with the seed suppliers that we are meeting. 

When farmers are selling at harvest, the prices are typically the lowest through the year.  Some farmers would like to leave their beans with the SACCOS as collateral for additional loans.  We responded that as the general rule, the SACCOS or the AMCOS should not accept the risk for decisions that farmers make.  As part of a warehouse receipt program, the SACCOS could grant a loan for 60% of the market price of crops at harvest so that farmers could have funds for the purchase of farm inputs for the next year, to pay for their children’s education, or for other purposes.  But the SACCOS should not accept the crops as collateral at 100% of market value.  Also, loans should not be given if there is not sufficient loan capital available to meet the needs of new loans for all members.

Our first interview at Ukwega was Bertha Ngusi.  Bertha is 51 years old and she has been a member of the SACCOS for three years.  She is married and has six children, three sons and three daughters.  Four of the children are married and two of the children are still living with Bertha.

Her first loan was for TZS 150,000 to purchase seed and fertilizer for one and a half acres of beans.  Her income from the loan was TZS 350,000 for a profit of TZS 200,000 (or about $88).  With the profits she bought three pigs. 

Her second loan was for TZS 350,000 to purchase seed and fertilizer for two acres of beans.  She earned income of TZS 930,000 for a profit of TZS 580,000 (or about $256).  With the profits, she bought maize as feed for the pigs and she was able to send her children to secondary school. 

Her third loan was for TZS 450,000.  With this loan, she was able to rent an additional acre of land, so she is now farming three acres of beans.  The crop is not yet sold for this year, so she hasn’t yet recognized the income. 

With the profits she is planning to purchase hybrid chickens and purchase a tiling machine, to tile other farmers’ fields on a contract basis.  She is also a sales agent for pyrethre flowers.  These flowers, when dried, are used to produce pyrethrum. 

This is a good example of how, with the access to credit through Micro Finance loans, and with hard work, SACCOS members are able to grow their businesses and increase their income, for the benefit of their families.

Bertha said that she gives thanks for the help and advice that Venance Msigala gives to her to help her increase her income.  “He does a good job as a teacher.”

Our next interview was with Samweli Kigala.  Samweli is 43 years old.  He is married with one child who is two years old.  He farms five acres of maize and has one pig.  He has been a member of the SACCOS for four years.

His first loan was for TZS 250,000 to purchase seed and fertilizer for two acres of beans.  His income from the loan was TZS 600,000 for a profit of TZS 350,000 (or about $150).

His second loan was for TZS 600,000 to purchase seed and fertilizer to plant three acres of beans.  His income from this loan was TZS 1,300,000 (or about $575) with net profit of TZS 700,000 (or about $310).

His third loan was for TZS 900,000.  He is waiting for the beans to sell before he recognizes the income. 

With the profits, he plans to build a small building that he can use as a restaurant to sell chips and soda pop.  He also plans to sell his beans at the Iringa market.  He previously sold his beans to middle men who came to the village.  He hopes that he will earn higher prices by selling in the market. 

Before we left for Ipalamwa, we were invited for lunch to the Pastor’s house.

We drove to Ipalamwa by turning back down the road that we drove to Ukwega.  Ipalamwa is about a half hour away from Ukwega.  We met with the officers and the board members of the AMCOS and the SACCOS.  There were supposed to be fifteen members at the meeting, but the Chairperson said that some members didn’t get the communication.

The AMCOS is registered with the Tanzania

Cooperatives Development Commission.  The certificate of registration was issued on May 15, 2018.

We heard more about the One Acre Fund.  Members said that the One Acre Fund delivers inputs on time.  Other villages have complained that often distributors don’t have supplies in stock and deliver inputs late or not at all.  It will be important to ensure that our AMCOS locations place orders on time for delivery on time.  We have currently included a sufficient interval for an ordering due date in our timeline milestone plan.

Another question was, “Why do we need to join two organizations and pay fees to two organizations when they are both under he same roof?  We responded to this question that even though our Iringa Hope organization works for both the AMCOS and the SACCOS, the Joint AMCOS and the Joint SACCOS are indeed two separate organizations and the requirement for separate registration fees is not optional but is a requirement of the Tanzania Cooperatives Development Commission.

Venance will be making recommendations of the seed varieties that are known to do well in each area. 

Another question asked was, “Can the AMCOS market two crops; maize and beans?”  Our response was that we are investigating alternative markets to ensure that there are markets available at the best price for the AMCOS members when they want to sell their crops.  Our first priority is for maize, since it is the predominant crop for this area.  We will also investigate markets for other non-perishable crops.

The Chairman of the SACCOS said that people from other lending institutions, including other cooperatives and the CRDB BANK, have contacted him.  Their interest rates are all very high.  He thanked us for the work that is being done.  He said that he tells all other institutions that before they contact him, they should contact Iringa Hope and discuss any proposals that they have.

He thanks Iringa Hope for the work that it is doing and he thanked Venance Msigala for the good work that he is doing to advise their members.

We then proceeded to have two more interviews.  The first interview was Jeneda Kasuga.  Jeneda is 50 years old.  She is married and has six children.  She has three daughters and three sons.  Their ages are 35, 25,19,12, 9, and 7.  She is a member of both the SACCOS and the AMCOS.  By coincidence, Jeneda is a relative of Gedion Chusi.  Gedion’s father is originally from this area.  Jeneda farms four acres.  She farms two acres of maize and two acres of beans. 

Jeneda’s first loan was for TZS 135,000 for cultivating beans and maize.  She reported total income of TZS 935,000.  She realized a profit of TZS 600,000 for her beans and an additional TZS 200,000 for her maize, for a total profit of TZS 800,000 (or about $350). 

Her second loan was, again, for TZS 135,000.  She received income of TZS 685,000 and a profit of TZS 550,000 (or about $250). 

Her third loan was, again, for TZS 135,000.  The yield for her crops are not yet in, so, she has not yet realized the income for the year. 

She has used her profits to purchase better food for her children, to send her children to school and it helped to pay for some hospital treatment that was required.  She said that she thanks us for the meeting to share information with the members and she thanks us for organizing the AMCOS.  She is confident that it will make a big difference in their lives. 

The next interview was with Aspilwe Kasuga.  Aspilwe is 38 years old and has been a member of the SACCOS for three years.  He is also a member of the AMCOS.

He has four children, one daughter and three sons.  His children are: twins that are 11 years old, a six year old and a three year old.   He farms four acres.  He has one and a half acres of beans and two and a half acres of maize. 

His first loan was for TZS 300,000 for seed and fertilizer for maize.  His income was TZS 1,950,000 and he realized a profit of TZS 700,000 for his maize and an additional TZS 950,000 for his beans, for a total profit of TZS 1,650,000 (or about $730).  With the profit he realized, he paid for uniforms and school fees for his children and he bought 4 goats.

His second loan was also for TZS 300,000.  The income that he generated was TZS 1,700,000.  He achieved a profit of TZS 600,000 for his maize and TZS 800,000 for his beans for a total profit of TZS 1,400,000 (or about $620).  With the profits, he made bricks for the house that he is building and he purchased iron sheets for the roof of his house. 

For the future, he plans to increase his savings in the SACCOS so that he can borrow more money, and he plans to purchase more land to increase the size of his farm. 

He said that he wants to thank Iringa Hope for bringing the SACCOS and the AMCOS to the village.  He said initially his income was down, but since he has been a member of the SACCOS, he is doing much better.

Then there was Ugesa

Ugesa is about a two-hour drive from Iringa.  Because of the long drive, we will not be visiting an additional village today.  It is a very scenic drive with pine trees that are being grown for lumber and several milling operations along the way and we encounter a number of trucks on the road, hauling lumber.

There are nine officers and board members that attended the meeting this morning.  We begin by reviewing the membership and the loans made in the last year. The Treasurer of the SACCOS reported that there are 137 members of the SACCOS, with 73 men and 64 women.  65 of these members are also members of the AMCOS.  They are in the process of registering as an AMCOS, but the registration is not yet complete.

The Treasurer reported that the total loans made last year was TZS 46,485,200 (about $20,500).  This included loans to 98 members, or about $210 per loan. Loans were made to 53 men, 42 women and three loans were made to institutions.  The repayment rate, so far, has been 90%.  This is an area that grows about 50% maize and 50% potatoes.  There had been too much rain for the potatoes and so the crop was not good.  The remaining loan payments are being rescheduled and the officers believe the loans will be fully repaid.

The government requirement for the registration of an AMCOS is that all members must pay an entrance fee and purchase shares in the AMCOS.  This AMCOS has set these fees as TZS 10,000 for the entrance fee and the cost of shares as TZS 10,000.  The AMCOS is requiring members to purchase 2 shares initially, and three more shares within two years.  So far, all 65 members have paid for

the entrance fee and the two shares, for a total of TZS 30,000 each (about $13 each).  The Government Commission also requires that the AMCOS must have TZS 300,000 (about $132) in assets.  The AMCOS is ready to join the Joint AMCOS. They plan to have a meeting in late July to allow the members to have a formal vote to join the Join AMCOS.

We then proceeded to deliver the presentation on how the AMCOS would work and the interactions between the AMCOS and the SACCOS.  Again, as in other village meetings there was much discussion and many questions. 

One of the questions was asked about what would be the ordering interval between ordering supplies and delivery.  We have proposed a timeline that would request that members’ orders be received from the AMCOS to the Joint AMCOS by September 1 for delivery by October 1.  Yara Fertilizer has assured us that this would be more than sufficient to deliver our forecasted demand of 10,000 bags of fertilizer.  However we have been advised that we should place our orders for hybrid seed as early as possible because some seed companies ran out of some varieties that farmers wanted to order last year, and farmers had to settle for some varieties that were not optimized for their areas. 

We have discussed how the Integrated Development Center buildings are designed to have warehouse space that enables AMCOS members to store supplies before planting.  They can store crops after the harvest to enable members to obtain possible higher prices after harvest.  A question was asked whether members could store green beans in the warehouse.  We advised them that the AMCOS could decide for themselves what guidelines to issue regarding what crops could be stored.  However, we recommend that only staple, non-perishable crops should be considered for storage in the warehouse, such as maize, rice or sunflower seed.

We have time for two interviews today.  The first interview was with Onesmo Nziku.  He is 27 years old, and has been a member of the SACCOS for two years.  He plans to be married later this year.  He farms three acres of maize, green beans and potatoes. 

His first loan was for TZS 600,000 (about $265) to purchase seed and fertilizer.  He was able to obtain a profit of TZS 900,000 (about $400).  He plans to take out another loan this year.  The time for his loan approval will be coming up soon.

Onesmo is currently building a house.  He says that he thinks he will be able to complete the house next month, before he gets married.  He thinks that his future is very bright, because he is able to take out loans that will increase his income.

Our next interview was with Atupavye Mgeyekwa.  She is married and has five children.  She has three daughters and two sons.  The oldest son and daughter are married and she has three children in secondary school. 

She farms three acres of maize, two acres of potatoes and ½ acre of green beans.  She has been a member of the SACCOS for three years. 

Her first loan was for TZS 300,000.  She used the money from the loan to purchase hybrid seed and fertilizer.  She made income of TZS 550,000 and a profit, after repayment, of TZS 250,000. 

Her next loan was for TZS 200,000.  She hasn’t yet harvested the crops, so she hasn’t recognized the income yet.  If the profit is great enough, she wants to build a house next year. 

She says that because of the SACCOS, her life is better and she has made a better life for her children.

With the interviews completed, we begin our drive back to Iringa. 

At Pommerini and Kitowo

Today we are starting our visit at Pomerini.  The SACCOS and AMCOS combined have 177 members.  There are 93 men and 84 women.  Of the 177 members, 65 are members of the AMCOS

Out of the 177 members of the SACCOS, all took loans last year except 5 members, who did not qualify for a loan because they were  new members.  A total of TSH 87,000,000 (about $38,500) was loaned last year.  TSH 27,000,000 (about $12,000) was loaned from the local SACCOS loan capital.  TSH 60,000,000 (about $26,500) were funds obtained from the Joint SACCOS.

Once again, there was a lot of discussion and many questions during our presentation of how the SACCOS and the AMCOS would work together. 

One suggestion that was made was that, if the vouchers that their SACCOS issues for the purchase of farming input supplies was going to use the same form as government vouchers, then we need to have our vouchers labeled differently to avoid confusion.

Another issue was the very low price of maize.  Not only is the price low, but there are no buyers for their maize, especially in Pomerini, which is far from the market in Iringa.  No buyer wants to drive this far to pick up bags of maize for resale in Iringa. 

The Secretary asked, "Now that the SACCOS and AMCOS is growing so large, have you thought of the AMCOS taking on the responsibility of value-added processing, such as milling maize into flour?"  This suggestion has been made a number of times at other AMCOS meetings.  After much discussion, everyone came to the conclusion that we may want to do that in the future.  In the short term, we should identify individuals that may want to invest in the equipment and start a business of milling and investigate working with them and selling to them.  Right now we need to focus on our immediate objective of ensuring that all the AMCOS are organized, registered, and prepared to begin functioning. 

There was a significant discussion of whether farming can be profitable by producing maize with the low price of TZH 330 per kilo.  Some members thought that raising maize would not be profitable at that price.  Some have said that implementing good farming practices with the use of fertilizer and hybrid seed is necessary to increase the yield to be profitable.  It was suggested that sunflower seed would be a more profitable alternative at the current prices.  We may see a larger shift to diversify away from maize during this coming planting season.

Once again there was significant discussion at this meeting but we still had time for two interviews at Pommerini.

Our first interview was with Anna Ngilangwa.  She has been a SACCOS member for five years.  She is married with six children and seven grandchildren. 

Her first loan was for TZH 1,000,000 to purchase seed and fertilizer for her farm of two acres.  She was able to produce 40 bags of maize (A bag weighs 50 Kg.).  She was able to generate a good profit, after repaying her loan of TZH 500,000.  She used some of her profits to send her children to school.  With the rest she bought some small pigs to raise for the market.

 

Our next interview was with Nehemia Magedenge, the Chairman of the SACCOS.  He is married with five children.  Two of his children are in college and three children are in primary school. His oldest child is at the University of Iringa studying Community Development.  His other child is at the University at Mafinga and is studying Electrical Engineering. 

Nehemia farms 10 acres.  He has planted three acres in trees and the other seven acres are planted with maize, beans, green beans, potatoes and tomatoes and some sunflowers.  He raises livestock including dairy cows, goats, pigs and chickens.

Nehemia has clearly been very successful in his business.  The Micro Finance loans have enabled him to purchase more livestock and grow his business income and have enabled him to fund his children’s college education.

I asked him about what he thought would be his biggest challenge as chairman of the SACCOS.  He said that many people are hearing about the success of the SACCOS and he sees a growing number of people who want to join the SACCOS, but with limited capital he wonders how they will fund the loans.  Overall though he anticipates a lot more growth in the coming years.

After finishing our interviews, we are on our to Kitowo

Kitowo

At the start of our meeting in Kitowo we presented our flow charts on the interactions between the SACCOS and the AMCOS.  Again there was much discussion and many questions.

The chairman of the SACCOS stated that there was a problem with the chairman of the AMCOS.  He said that, “He has been vacated.  He is no longer here.”  They will need to elect a new chairman.  At first this seemed like bad news.  However on reflection we realized that this is a good sign!  It shows that our organization is managing itself and our members are willing to take action when action needs to be taken. 

There was a question about whether non-members can participate and buy through the AMCOS.  This is a question that has come up in the past.  We explained that, indeed, non-members can purchase supplies through the AMCOS, but they will not be able to take a loan through the SACCOS and the AMCOS may decide that they will pay a discounted price, but not the low discounted price for supplies that will be available to members of the AMCOS.

Another question was asked about whether a member could take out a loan for supplies if they only have minimum savings.  We responded that the loans from the SACCOS are handled the same way as they were before the creation of the AMCOS.  That is, a member must have one third of the amount of the loan that they would like to take, in savings in the SACCOS.

Another question was asked about how the Joint AMCOS expenses were funded.  We responded that the cost of supplies will be marked up by a percentage sufficient to cover the expenses of the Joint AMCOS.  This is possible because we will receive a price from the supplier that is better than the price that members could obtain otherwise, because we are dealing directly with the suppliers.

There was a lot of good discussion, but we also found time for two interviews at Kitowo. 

Our next interview is with Devotha Msilu.  She is married and has three children.  She has a son who is 12 years old, a daughter who is 6 years old and a son who is one year old. 

Devotha farms one acre of maize.  She has been a member of the SACCOS for six years.

 After finishing interviewing Devotha we were off back to Iringa.  Tomorrow is another long day!