Despite the many microfinance initiatives aimed at reducing exclusion from financial services in rural areas the problem of financing smallholder farmers is still very acute. For this reason MVIWATA ARUSHA chose to take a close look at what role microfinance can play and how can it intervene to improve farmer’s access to financial services.
Our Microfinance program has four main activities:
- Financial Literacy and Financial Education: Everybody learns to manage money but not everybody manages it well. Some live hand to mouth focused only on making ends meet on a day-to-day basis. Others look ahead trying to prepare for unforeseen events or irregular demands such as school fees by setting some income aside as savings. Farmers have to ensure they can purchase inputs and meet other farming expenses from their incomes in addition to meeting family demands. So learning to manage money well is an important skill. Our programs often involves changing behavior, shifting from reactive to proactive decision-making and learning ways to plan, analyze and control household and business finances. Limitations in literacy and numeracy, coupled with a lack of access to financial services, can make acquiring these skills difficult for small scale farmers in developing countries, but they are vitally important.
- Financial Inclusion through farmers’ self-owned financial institutions: Because most of the farmers we help are in rural areas where there are no formal financial services we have opted to use self-owned financial institutions like SACCOs as an alternative for their financial inclusion. To date we are supporting 6 SACCOs and some initiatives are continuing to take place to ensure each of our local network has its own SACCOs.
We have developed a SACCOs management System to assist these Saccos keep good records of all their financial transactions. It is our vision that in the long run these self-owned financial services can mobilized to form a community bank for farmers in the Arusha Region. You can click the link below to get more details of each SACCOS: KIPOK SACCOS, MVIWABU SACCOS, MANANA SACCOS, MVIWAEKE SACCOS, MVIWAENGU SACCOS, KOMOLONIK SACCOS
- Revolving funds to farmers’ self-owned financial institutions: This is a special program in which we provide some funds in a revolving scheme to empower the lending capacity of our SACCOS. The revolving period can range from one year to three years in one SACCOs and at the end of revolving period the institution will be left with the interest that has been generated from lending and the fund will be taken to another institutions; we call this a “zero interest loan”
- Linking of farmers’ self-owned financial institutions to formal financial services: To respond to these needs, MVIWATA ARUSHA struggles to establish partnerships with a range of companies to explore models for connecting savings groups with formal financial services to offer groups low-cost savings accounts with no minimum deposit. Some of our dreams include money on wheels, daily saving schemes and mobile based micro credits. Should you wish to partner with us click here for more details