Banking the Un-bankable- How Salama SHIELD Foundation (SSF) is reaching Lyantonde and Rakai’s unbanked women

Financial inclusion is still an illusion for many peasant families in Lyantonde district. Their (peasant families) reasons for not having bank accounts vary. Some are too poor to own one and others lack financial literacy to open one. These people are known as the un-banked. By definition, the un-banked are individuals that have no bank accounts. Their income and expense streams are often inconsistent and they don’t always follow a structured budget.

Without savings and bank accounts, access to financial services such as loans is challenging. Moreover, setting foot on the financial ladder requires them to have a credit rating which they lack. However, through its Micro-finance Revolving Loan (MCRL) program, Salama SHIELD Foundation (SSF) is helping the financially disadvantaged residents of Lyantonde and Rakai districts in central Uganda make small steps into financial inclusion. Under the program, impoverished women are provided with loans through support and accountability structures of base community groups that comprise of five to 25 women.

“With the educational support of the SSF Micro-finance team, loan recipients take part in a business-training program where they learn skills such as savings and record keeping, group dynamics, financial and project management, entrepreneurship and business skills and resource mobilization,”

Rose Kawere, the SSF’s Country Director said during an interview.

According to information on the Foundation’s website: https://www.salamashield.org, the MCRL program targets un-bankable women who are too poor to qualify for loans, lack collateral and are economically dependent on their husbands. The MCRL program allows repaid interest to be re-loaned to current members who want access to bigger loans, or alternatively, are provided to new members joining the group. MCRL started in 2008 with five women’s groups, each consisting of 25 women, and with an initial fund of UGX 3M. Today, the fund has grown to fund 140 women community base groups to a tune of over UGX 900M fund. Clients are encouraged to save, with the average savings per month ranging between UGX 2,000 and 5,000 per client.

Fruits of financial inclusion
The Foundation’s financial inclusion alternative of giving out seed loans is empowering women to reduce poverty, increase food security and strengthen their capacities in decision making. One incident where this has been exemplified is in a recently concluded land dispute where over 400 families risked losing their homes. The scene – In 2017, a 192-acre piece of land in Lyantonde’s Kamengo village with 87 households was being sold by Bank of Africa because two land administrators who had acquired a UGX 90M loan from the bank had failed to repay it.

“I witnessed an incident where the villagers became violent and abusive towards the bank managers and administrators when they first came to evict them with the help of police,”

recalls Steven Tibirikwata, a resident of the area.

The looming eviction meant that hundreds of families risked losing their homes, access to and ownership of the land they had lived on for more than three decades. However, with the intervention of Joseph Bwanika, the LC III Chairperson and Nsereko Gonzaga, the LC I Chairperson, the eviction did not happen. Mr. Bwanika approached Salama SHIELD Foundation (SSF) and pleaded with them to afford loans to the women so that they are able to repay Bank of Africa.

The Foundation agreed. It also extended financial literacy to the women and lent them up to UGX1.5m, an amount higher than their cap of UGX 300,000 for first time borrowers. This had to be paid within seven months before more money could be disbursed.

One of those who have benefited from the loan scheme of Salama SHIELD was Geraldine Tushemerirwe, a mother of four and grandmother of eight children. She was lent UGX 1.4M and was able to pay for two acres of the land.

“Now that my family has secured the land, I will continue engaging in coffee farming and I am diversifying into animal husbandry, dealing in goats and pigs. I thank Salama SHIELD for coming to our rescue because if they hadn’t, we would be homeless now,”

she said during an interview.

Another, Evas Tusasirwe said that she has been able to repay the UGX 640,000 that she borrowed from Salama SHIELD to pay for her land. This she did by selling off food crops such as beans she was growing and also working in people’s gardens. She is now in pursuit of the land title.

Hajat Sarah Matovu, Salama SHIELD’s Field Officer in the micro-finance department says,

“the Foundation is now in its fourth cycle of loans with the women groups from Kamengo village. She notes that the ultimate aim of the MCRL is to ensure that women have the opportunity to access financial services to better their lives resulting in a decrease of people in poverty.”