Saturday, August 30, 2008

Floresta and VICOBA



Miriam and I drove to the NE side of Mt. Kilimanjaro to Marangu to see projects run by Floresta. At over 5000' and on the wet side of the mountain the area was cool and verdant compared to Siha. We were met by Edith Banzi ,the project manager. She outlined their series of programs. Florestais an NGO whose mission is to set up programs for economic development that would be sustainable and benefit the environment. Their programs include bio-intensive agriculture [BIA]which trains the local population to grow organic produce for their own use and for selling to improve their income , conservation/reforestation projects and VICOBA. They also sell safe,fuel efficient, wood cooking stoves to the community for $3 each. Miriam and Edith have been working together to implement Floresta programs in Siha.
The biggest success story is VICOBA which stands for Village Community Bank. It is a microfinance program with several unique twists. At the start of his book, "Out of Poverty", Paul Polak describes his conversation with a poor farmer in Nepal. He asked the farmer what he would need to get out of poverty. His reply was," money". What he was saying was that he needed seed capital to invest in drip irrigation supplies so that he could grow off season vegetables which he would then sell at a premium price. With this extra income he made improvements on his farm and in a very short period of time he and his family were able to enter the middle class in his community.
VICOBA expands this concept of microfinance. The initial step is the formation of a community group of about 30 to 40 members [75% are women]. They then enter a 12 week training program where they set their rules of governance, are trained to develop business and marketing plans and learn about the process of borrowing money. From the start each member invests $1 to $3/week. A group dynamic is formed in which members assist each other with their home based microenterprises. [I had described this process when I wrote about Miriam's women's group in an earlier blog.] Each member is allowed to apply to borrow up to three times her personal investment. The loan process also includes a business plan that tells how the money will we spent and how and when the loan will be repaid with interest. A subgroup of 5 people are selected to evaluate the loan applications and business plans and then monitor the use of the loaned money. In this way the VICOBA program has empowered and built capacity of the people on the proper way to manage their small enterprises. Currently there are 17 groups with more than 600 members and are now in the process forming an umbrella group to be able to do larger projects.
Adventure Aid has begun discussions with Floresta to see if we can set up joint programs in the Marangu community. Volunteers with business , accounting, banking marketing and agricultural skills will be a great asset to these programs. For tourism options, Marangu is one of the primary starting points for climbing Mt. Kilimanjaro.

1 comment:

rewa said...

Hi
What is the source of capital for groups to be able to make $1000 loans? Is it entirely member or community savings?