13 April 2015

how to raise some cash money.

The core focus of my ministry here in Tanzania is helping young mothers attain economic empowerment by starting and running their own businesses. One of the great and obvious challenges in this line of work is acquiring the capital necessary to finance the start-up (AKA lack of money).

For example, the current batch of young mothers entering my business curriculum earns, on average, USD 2.65 per month (USD 0.09 per day) with many lacking any income whatsoever. In a way, this makes sense: these are young women who dropped out of secondary school due to pregnancy. But the reality is that they need to find a way to generate an income if they are to live a life of dignity, self-confidence and respect, and to provide for their basic needs and those of their child.

So amidst such a backdrop, how does one possibly accumulate the financial resources needed to start a business?

One of my goals for this year was to initiate a saving and loaning group for these young mothers. After studying what other organizations were doing, we adopted our own method which borrows on the strengths of many existing systems. Locally, such a framework is known as hisa (pronounced hee-sah).

What is Hisa?

Hisa is a system of saving money within a group and loaning money to members in order to empower them to attain economic emancipation and achieve goals faster than they would be able to as individuals. The guiding principle that we teach is: "Save consistently, invest wisely."

While members have their individual aims, the overarching goals of a Hisa group are two-fold:
  1. Empower members to escape poverty in order to advance personal and community development.
  2. Provide an opportunity to deposit money into group savings and borrow money in the form of a loan at a fair interest rate on the condition of group members.


The word hisa in Kiswahili refers to a share of ownership, or a deposit of savings, in the group. In our case, each share has a monetary value of TZS 1,000 (USD 0.59), which was decided upon by the group members. When members come together for weekly meetings, one of the activities undertaken is to "play Hisa." This refers to the action of individual members deciding for themselves how many shares they would like to buy (AKA how much they want to deposit into group savings) for that particular week.

Each member is able to buy between one and five shares per week. For example, if a young mother would like to save TZS 5,000 (USD 2.94) in a given week, then she would buy five Hisa, which is the same as depositing that money into savings.

The more shares a member owns, the more money they have in savings and, therefore, the more money they are able to request as a loan and the higher the potential dividend payout will be at the end of the year.

stamping members' hisa books to record how much each has saved.


Members are able to request a loan from group funds and borrow an amount equal to three times the value of their Hisa or less. For example, if the value of a young mother's Hisa (savings) is TZS 50,000 (USD 29.41) she is able to request a loan of up to TZS 150,000 (USD 88.24).

In order to borrow from the group, the young mother must fill out a loan request form. Two guarantors, who are also group members, must sign this form stating they guarantee loan repayment. The group decides democratically if a member's loan request is granted or denied.

Each loan carries a monthly interest rate of 10% and must be repaid by the agreed upon date, otherwise penalties are incurred (e.g. interest rate increases). The loan payback date depends on the size of the loan received, but the majority of loans are to be paid back within three months or less.

young mother, rose, receiving a loan to expand her booming restaurant business.


It is useful if a Hisa group has between 15 - 30 members who live in the same geographic location, are of similar socio-economic backgrounds, and have some pre-existing knowledge or relationship with one another. Members manage their own Hisa group, and elect individuals within the group to leadership positions for one-year terms: Chairperson, Secretary, Treasurer, Accountants (2), Key Holders (2) and Manager of Discipline.

So if the members manage the group themselves, what do I do?

My role is that of the organizer and facilitator. I invited the young mothers to our office to learn about Hisa and decide if they would like to enter into such a saving and loaning group. Once group interest was understood, I taught them how the system works and helped them organize. I participate in every meeting to monitor and evaluate the progress of the group, and the young mothers also receive a short lesson on financial management during each session. In other words, I provide ongoing coaching to help ensure the success of the group.

some of the young mothers participating in our initial hisa group.


This initial Hisa group of young Tanzanian mothers has only been meeting for ten (10) weeks, but below are some summary statistics of the group:

  • Number of active group members: 20
  • Total group income: TZS 1,580,700 (USD 903)
  • Weekly income growth: TZS 158,070 (USD 90)
  • Total loans distributed: TZS 3,093,000 (USD 1,767)
  • Avg. loan size: TZS 91,000 (USD 52)
  • Loan repayment rate: 100%

How do these statistics measure up? Market-wide data collection is difficult, but from what I gathered from other saving and loaning groups in Mwanza, our group is off to a very good start.

The Hisa system that we have implemented is still in its infancy and we continue to learn every week what works and what does not, and will continue to adapt and refine our approach as needed.

If you are interested in the work that we are doing and would like to financially support such efforts, you can make a tax-deductible donation to my Ministry Account with Maryknoll Lay Missioners right now. This money, for example, would provide the seed or start-up funds needed to form additional Hisa groups for more young mothers.

1 comment:

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