The Kitale Community Pool lends to small businesses in the Kitale area of Uganda.
The Pool Manager, Mr Ausicery Jean, has been lending successfully in his local community for over 8 years to help fund the Kitale Community School. He has an outstanding track record, experiencing zero defaults to date. The Pool Manager’s approach is facilitated by four key principles: (1) collateral taken for every loan, (2) affordable rates for borrowers, (3) clear and understandable business cases from each borrower, and (4) familiarity with borrowers based on long-term relationships.
Prospective borrowers in the Kitale region have difficulty accessing capital from banks and microfinance firms. In the very few cases that these borrowers can access loans from banks, predominantly based in towns and cities far removed from the Kitale community, the rates offered are significantly higher than the rates available from the Kitale Community Pool. The aim of the pool is therefore to offer more affordable rates than available elsewhere in the region, meaning that the end borrower can retain and reinvest a greater amount of profit generated from their business.
The Pool Manager selects the most promising businesses in the Kitale community based on their growth potential and their ability to facilitate job creation in the local area. Businesses selected to receive loans will have sound financial fundamentals, have demonstrated long term, sustainable performance or will be owned or managed by individuals with a strong commercial track record. The Pool Manager takes security and personal guarantees from the business owners, with the security normally comprising the deed of the business owner’s property.
A significant proportion of loans issued by the Kitale Community Pool will be to agricultural businesses that require finance to irrigate, fertilise and insure their crops. Any loans to agricultural businesses will be issued with crop insurance if not already in place, so that in the event of a crop failure the outstanding debt will be repaid via the insurance policy.
A proportion of the Pool Manager profits will be used to contribute to the running costs of the Kitale Community School.
The Iki-Iki Farmers Pool lends to a co-operative of over 40 farmers from around the town of Iki-Iki in the Budaka region of Eastern Uganda, 20km from the city of Mbale. Budaka's economy is dominated by agriculture with the majority of farming activities undertaken by small holders who produce perennial and annual crops such as bananas, coffee, cotton, maize, sweet potatoes, tomatoes, beans, cassava and groundnuts.
The farming cooperative that will benefit from the loans made from Iki-Iki Farmers Pool has been working together successfully for a number of years, pooling savings and harvests whilst benefiting from collective training and buying power. The Pool Manager will be Regina Nagudi, who has led the Iki-Iki Farmers collective for a number of years, and will be responsible for distributing loans and collecting repayments from members of the cooperative.
Loans will be used to facilitate the growing of higher yield crops such as tomatoes. A pre-condition of the Pool issuing a loan will be that the farmer in question has purchased crop insurance or will use part of the loan to purchase crop insurance. By enabling the cooperative members to purchase crop insurance policies, Pool loans will allow the farmers to protect themselves against the downside risk of crop failure (the higher yield crops in question have a higher failure rate) whilst benefiting from the material upside of successful harvests.
The Pool Manager's risk management approach is facilitated by three key principles: (1) crop insurance as a pre-requisite of loan issuance, (2) affordable rates for borrowers and (3) familiarity with borrowers based on long-term relationships.
Prospective borrowers within the cooperative currently have difficulty accessing capital from banks and microfinance firms. The aim of the pool is therefore to increase financial inclusion in the area, generate higher crop yields and offer more affordable rates than available elsewhere in the region, meaning that the end borrower can retain and reinvest a greater amount of profit generated from their business.
The Namirembe Women's Pool is the first Sapling lending pool focussed exclusively on providing loans to small businesses owned and operated by women. The pool will lend to a group of 50 women in the Budaka region of Eastern Uganda who already operate a savings and loans cooperative in which they pool resources and provide credit to each other; the pool will be managed by Regina Nagudi who is already acting as the Pool Manager for the Iki-Iki Farmers' Pool. The Namirembe Women's Pool will provide additional capital to the group to allow them to invest in and grow their existing businesses at an accelerated rate that they would otherwise be unable to achieve via their savings and loans cooperative. The businesses operated by the women in the group are all established and diverse in their nature, including retail shops, vegetable vendors, produce vendors and farms.
Training Pool for user training under live network conditions