|Urwego Opportunity Bank|
Ian: The target client group for this microfinance project is the ‘lowest point of the pyramid’ – i.e. people who can’t access banking services/money anywhere else. A significant number of the bank’s customers can’t write, so the bank has invested in high tech photo and fingerprinting technology, so that people can open an account without any need to fill in any forms.
Initially loans between the 35- 40 dollar mark are taken out and used (for example) to move from a grass roofed house to an iron roofed house, or to get kids into school.
One of the lending principles is that the bank only lends to community groups (although the loans are made to the individuals that make up the group). But there’s a bit of local quality control that goes on first of all, before the community group let you in! When borrowers pay back the loan an element of the pay back (10%) is saved!
The make up of these groups has to be 90% women! The reason being that when women do well the family do well! (Not necessarily the case when you lend to men seemingly!). Before the bank loan they ‘train’ the potential recipients for a month.
We visited a loan payment day in someone’s back yard in a busy part of Kigali where the loan officer came to the meeting unaccompanied with 30,000 US Dollars in a paper bag! Example of what the above system has done – One woman who started with a 20k Rwandan Francs (35 US Dollars) loan, now borrows 800k (1,400 US Dollars). She started with nothing and now has a very successful mobile phone business. She can now take care of her family, owns her own house and can afford to put her kids to school. What an experience! What a visit! Certainly one of the highlights to the trip.
Lisa: This bank serves the poorest of the poor by providing microfinance. These are loans made to a Trust which is set up within a community and consists of say 50 members who all guarantee each other’s loan. UOB is linked to World Relief. After the genocide they looked at Orwego community banking as a way of providing relief in 1998 in the form of a NGA. Opportunity International (largest microfinance bank in the world) merged with OCB to create UOB on the 1st July 1997. It is governed by all the usual banking rules. To open an account the staff takes a finger print and a photograph. This is all that is required. Loans can be from $30-$40 dollars per person. This helps very poor to go from a grass roof to a metal roof. They can go from owning nothing, to having a few pigs and goats, helping give the people confidence. Hand up instead of hand out! The return on the investment is huge.