An Unfortunate Rise in Bad Debts The Russian naval blockade of grain shipments in the Black Sea last year caused food prices in developing countries to rise sharply. Families living on one meal a day were put at even greater risk of starvation. There were accounts of deaths further up North from starvation. A lot of our borrowers took longer and longer to make repayments. Loans that had been outstanding for over 6 months began to arise. Some debts went bad through no fault of the borrowers. One borrower had a child hospitalised from being run over by a speeding vehicle. In Uganda, hospitals require payment for any treatment and hospital stays can be very expensive and even unaffordable to many families. All borrowers, however, pledged to repay their loans because they knew what we were doing and the fact that there are always families in great need waiting for our assistance. Some borrowers felt great shame and guilt for not making repayments and avoided us which made helping them more difficult.

Mercy's new business. © ESN Bigger Meals Ltd

Beggar Loans We have successfully trialled a special new type of loan we call a 'beggar loan' modelled on the Grameen Bank's beggar loans. We found a lady who was going from hut to hut begging for work. She had no home and her three-year-old daughter was severely malnourished and she had kwashiorkor. It took a lot of time and effort to get the lady to trust us and take a special loan that included money to not only start her own business but also rent a hut. We immediately put her daughter on our kwashiorkor recovery program and that helped as did other borrowers who convinced her we could be trusted because she didn't trust moneylenders. She then successfully started her own business processing casava and she was able to repay the vast majority of her loan in time.

Such loans are very high risk for us because if the borrower is transient, they can easily disappear with the loan money and we would likely never see them again. Incorporating the hut into the loan reduced that risk. Going forward we plan to provide our most vulnerable borrowers with volunteer mentors in the form of our most successful borrowers who know exactly what it takes to pull themselves and their families because they have done it.


Lessons learned

We have had to get better at distinguishing between the 'not poor', the 'moderate poor' and the 'poorest of the poor'. When word spreads around that we are lending the first in line tends to be the 'not-poor', followed by the 'moderate poor'. The poorest of the poor often don't turn up. We often have to go looking for them and then an effort is often required to win their trust before they will participate in the program. Money lenders often have a bad reputation for exploiting people and harming those who don't or can't pay on time. The not-poors normally see the loan in transactional terms. There is no love and respect with transactional thinking and they are the most likely group to default. The poorer people tend to really appreciate what we are doing for them and they see the loan as a wonderful opportunity to escape poverty that they may never get again. With gratitude comes love and respect. They know that there are other struggling families who need a loan so our borrowers work hard to repay their loans. One of our most successful groups of borrowers even used their group savings to lend to other families in great need to replicate what we do. Community spirit is key to everything we do.

During training, we have also had to place emphasis on teaching people to distinguish between needs and wants and then prioritise their needs. If your earnings increase substantially and you've never had a decent income before it can be very tempting to go and buy things we want or desire rather than need. In order for our bank to survive we need our borrowers to not only repay their loans but also save for necessities like putting their children in school where they will be fed properly. There is also a need to save for unexpected medical emergencies. If anyone gets sick in Uganda and they need medicine or hospital treatment then they will need money to pay for it or they will likely have to go without. Life expectancy in the communities we operate in is quite low.

We want to mass-produce seed-balls in Uganda to help make it easy for school children and people living in rural places to plant billions of trees throughout Uganda and Africa. You can learn more about seed-balls here:

To aid that effort we will focus heavily on climate change education. We have designed a very simple, but effective, single page climate change education leaflet. Its purpose is to educate Ugandans who live in rural areas about the dangers of climate change and greatly motivate them to plant new trees and look after them. We’re also designing a new and scientifically up-to-date climate change education program for schools which will focus mostly on the science behind planting new trees for the future versus the science of cutting them down unsustainably, which is deforesting vast areas of Uganda and putting those areas at greater risk of droughts and floods.

The world’s countries now need to keep global warming under 1.5° C by 2030 to avoid catastrophic warming. Meanwhile, approximately three billion people in the world still cook using open fires or simple stoves using kerosene, wood, charcoal, coal and other biomass, and as many of them as possible now urgently need access to alternative clean cooking and water pasteurising technology. Also, globally, an estimated 4.3 million people (mostly women and children) die annually from exposure to smoke from charcoal and biomass, which causes acute respiratory illnesses, cancer, heart disease and cataracts. Finally, two billion people are thought to lack access to clean water, which causes an estimated 485,000 diarrhoeal deaths per year due to waterborne parasites and bacterium. Please see our solar oven and water pasteuriser we have designed especially to help solve all of these urgent issues via ESN Bigger Meals Clean Technology.