Thursday, February 25, 2010

BRAC Tanzania: Exceeding Expectations

A few years ago, a program staffer at The Bill and Melinda Gates Foundation made a due diligence trip to Tanzania to evaluate a bold proposal by BRAC to start from scratch a microfinance program combined with health, agriculture, poultry and livestock development.

Today that staff person, Dr. Rajiv Shah, heads USAID. And the Senior Program Officer who completed the deal and placed the bet on BRAC, Dr. Melanie Walker, is beginning to see it payoff.

Three years into this 5 year $15 million start up grant, BRAC Tanzania is on track or exceeding its targets to create a national development organization. With over 100 branches, serving over 112,000 with microfinance, BRAC Tanzania now employs 1,200 staff and benefits over 1 million people.

In addition, it has over 1,600 community health promoters (CHP) who promote health through education, prevention, referral and selling simple health-related products. Over 800,000 people have benefited. One CHP that I met, Emmanuela Rwekaza, said that her top selling items are "sanitary napkins, paracetamol and condoms." Her highest margin is on the anti-fungal cream.

BRAC has also trained an army of agricultural entrepreneurs and farmers who are blazing a trail to improve productivity, yields and incomes. There are thousands of self-employed poultry and livestock service providers, artificial inseminators, model rearers and farmers. Over 32,000 farmers have been trained.

I interviewed Aziz, a young man who said that he "earns a good living now from inseminating cows." He charges between 15,000 (US$7.50) and 25,000 (US$12.50) schillings per service.

BRAC has caught the eye of the Tanzanian President, reported board members Dr. Harun Kashali and Dr. Hassan Mshinda over dinner. We talked about how many young people have received training, become employed, and started paying taxes for the first time in their lives. While the discipline of turning up on time for work at 7 am and walking the hot dusty roads is not for everyone, whether they stay with BRAC months or years, it is a net gain for the country.

Two branch managers hired at the start were promoted to Area Managers two years ago. Rose and Emma are indicative of the potential of Tanzanians, particularly young women, to seize this opportunity for themselves and the nation's development.

- Susan Davis
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Posted by BRAC Blog at 12:55 PM
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8 comments:

  1. Hi,

    Do you have any information regarding the situation with BRAC Tanzania and Kiva ?

    "BRAC Tanzania’s delinquency rate is higher than normal as a result of difficulties moving funds from Tanzania. The organization is working with the Central Bank of Tanzania to sort out this issue and is providing regular updates to Kiva on its progress. Kiva will be sure to update this page as we learn more, and all funds received from BRAC Tanzania will be applied to delinquent loans upon receipt."

    This is dated July 2009, and no significant updates have been made since.

    Thanks

    Patrick
    http://www.kiva.org/partners/102
    ReplyDelete
  2. Hi Patrick,

    Thank you for your question. The delinquency rate of the BRAC microfinance borrowers in Tanzania is actually very low, as we have a 94% repayment rate. The difficulty is in getting the money out of Tanzania and back to Kiva in the US. We are in talks with both the Central Bank of Tanzania and the Government of Tanzania to ensure that we can pay back the late loans and subsequent loans as agreed. Unfortunately, this is a long process, and the talks are still ongoing. We have updated Kiva, and it’s been reflected on their website, as of February 1st, 2010. We will continue to update Kiva regularly until this matter is resolved.
    ReplyDelete
  3. Thank you for your reply, I only got to see it today.
    ReplyDelete
  4. Michelle,

    a repayment rate of 94%? Impossible, as all Brac Tanzania loans are delinquent since June 2009... Or money was paid back to Kiva, but not to the lenders like myself! And we are all fed up about the lack of information and updates!

    Please contact Kiva asap to give us some Updates!

    Mathieu
    ReplyDelete
  5. Dear Mathieu,

    The 94% repayment rate refers to the percentage of BRAC microfinance borrowers in Tanzania who have repaid their loans.

    The problem is not that the borrowers have not repaid their loans or that Kiva is witholding the money from the original lenders. The problem is that BRAC in Tanzania is currently not able to transfer this money outside of Tanzania because of Central Bank regulations.

    We are in talks with both the Central Bank of Tanzania and the Government of Tanzania to ensure that we can pay back the late loans and subsequent loans as agreed. Unfortunately, this is a long process, and the talks are still ongoing. We have updated Kiva as of February, 2010, and will provide updates as new developments arise.

    BRAC's Founder and Chairperson Sir Fazle Hasan Abed recently met with the President of the United Republic of Tanzania (http://blog.bracusa.org/2010/04/bracs-chair-commits-to-large-scale.html), which will hopefully move this process along more quickly.

    Best,

    Michelle
    ReplyDelete
  6. Michelle,

    This problem with transferring money from Tanzania to KIVA accounts has been going on since June of 2009 --- eleven months! We have been told several times that the problem will be fixed soon. How do other microfinance companies in Tanzania manage to transfer funds just fine? I have lost all confidence in BRAC Tanzania.

    Carl
    ReplyDelete
  7. Update (as of July 1 2010): http://fellowsblog.kiva.org/category/kiva-field-partners/brac-tanzania/
    ReplyDelete
  8. There was also an update made regarding the problems with transferring money from the Bank of Tanzania posted in early May:

    http://www.kiva.org/partners/102
    ReplyDelete

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