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Project Hope and Hard Work

Strengthening, Enhancing and Expanding the Wekembe Microcredit Scheme in Uganda

Uganda is one of the poorest countries in the world. In 2007, per capita income was about US$340 per annum. Life expectancy at birth is around 50 years and its population growth at about 3.2 percent, remains one of the highest in the world. According to the World Bank World Development Indicators of 2002, 55% of the Ugandan population lives on less than $2.00 per day.

Microcredit is the extension of very small loans (microloans) to poor entrepreneurs and the active poor who are not considered bankable.  These individuals lack collateral and a verifiable credit history and therefore cannot meet  the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance which is the provision of a wider range of financial services to the financially active poor.
The importance of microcredit in Uganda has soared in the recent decade and the instrument is now seen as one of the most effective tools to tackle poverty in the country. The strong belief in microcredit derives from the fact that the provision of credit to the active poor can contribute to poverty reduction and pass the test of sustainability at the same time. It recognises the importance of the informal sector as a source of employment and income generation for the active poor members of society and thus a potential tool for poverty alleviation.

Wekembe means to "work hard to pull out of a certain condition". Initiated by the Bishop of the Luwero catholic diocese in 2001, the primary goal of Wekembe Microcredit Scheme was to provide  access to financial services to active poor women to enable them improve the quality of life of their households. Wekembe focuses on  women because lending to women is thought to benefit the whole family and strengthen the role of women in society. In addition, like in most other parts of the world, women have proven to be better repayers.
Indeed, Wekembe has enabled its members to improve their economic and social conditions. It has begun to instill a new culture of saving and access to credit among its members. This new financial stability has given its beneficiaries greater access to: improved health services, better housing structures and improved agricultural practices.

The  strengthening  the Wekembe Microredit Scheme to make  it a more effective and stable instrument for improving the economic, housing and educational situation of the people in Kampala Archdiocese with particular attention to:

• Increasing food security
• Increasing health conditions and access to medical cares
• Reducing economic gender balance created by the empowering of women
• Facilitating home building and home improvement
• Incentivizing a culture of savings
• Financing new programs for food processing and marketing
• Increasing overall household income

 Is the general objective of our project.

The project aims to create the conditions whereby the scheme can move to a place of self-sufficiency, first by covering the operation costs of its lending activities with the revenue it generates and  second to begin to receive deposits and manage savings accounts.

The specific objectives of the project are the following:

• Education of new loan officers: to educate and train at least 75 new loan officers, many of whom will be put to work directly for the expansion of the Wekembe Microcredit scheme.
• Geographic expansion of Wekembe: to expand Wekembe's current 12 loan officer operation by placing at least one loan officer in each one of the 51 parishes of the Archdiocese of Kampala. The rate of expansion will be 15 parishes per year.
• Product expansion: to increase in the number of products that Wekembe offers to its clients, moving from the sole product of small business support to the offering of home improvement and educational loans as well as any other services identified in the initial strategic analysis.
• Operational improvements: to enhance the operational efficiency of the scheme by supplying it with the necessary infrastructural and managerial tools as identified in the initial strategic study. (i.e. salary subsidies, software and hardware improvements, reporting techniques).