01-Apr-2011

Microfinance With Education in Rwanda

The Chalmers Center interviews Daniel Ryumugabe

Many in the microfinance industry believe that poor people simply need access to capital in order to improve their economic condition. The Chalmers Center disagrees, believing that capital alone cannot address the multifaceted nature of poverty. In particular, we believe that poor people—like all of us—need training in a biblical worldview concerning human beings' proper relationship to God, to self, to others, and to the rest of creation. In addition, poor people need technical training in how to be better stewards of their businesses, their homes, and their health needs. Microfinance alone is not the answer.

In order to address this gap in the microfinance industry, for the past three years, the Chalmers Center has been integrating biblical worldview messages addressing the lies in animism into outstanding technical curriculum developed by an award-winning, non-sectarian international development organization. The Chalmers Center has field-tested this curriculum in various locations in Africa, Latin America, and India.

The result is a nine-part curriculum called Training Low-Income People for Business, Home, and Health (BHH), specifically designed to be used in microfinance ministries. We are calling the integrated approach of microfinance with BHH training:"Microfinance With Education (MWE)" — a cutting-edge, gospel-focused approach to economic development that is equipping churches and Christian organizations to minister holistically in poor communities in the majority world.

Throughout the years, God has enabled the Chalmers Center to develop a number of strategic relationships in Rwanda, one of these being with Daniel Ryumugabe, a member of the Chalmers Center's Global Fellowship of Trainers (GFT). So when we asked Daniel to help us field-test the BHH curriculum in his country, he was more than happy to help.

Daniel incorporates Chalmers curriculum and training into his day job as Director of Transformational Impact at Urwego Opportunity Bank, a Christian Microfinance Institution in Rwanda. Recently, Daniel has taken our newly developed BHH curriculum into the field to Urwego's 33,000 clients in a push to train poor people in principles of small business management, financial literacy, and a range of preventative health topics (HIV/AIDS, malaria, diarrhea, etc.) alongside of Urwego's financial lending. What he's found is that combining Urwego's microfinance lending with the Chalmers Center's BHH curriculum is impacting the lives of Rwanda's poor more deeply than either could do alone.

To dig down into this notion of what happens on the ground when a microfinance ministry adds this kind of education, we recently had the great privilege of catching up with Daniel (via Skype) at his home in Kigali, where he had some interesting stories to tell.

- Brian Fikkert

Chalmers: Muraho!

Daniel Ryumugabe: Muraho. Amakuru ki?

Chalmers: Muraho is the extent of my Kinyarwanda

(Laughter)

Chalmers: Our offices have been buzzing lately with questions on how our Business, Home, and Health (BHH) curriculum is faring with your development work on the ground in Rwanda. So why don't you start by telling me a bit about your current work and how you're integrating your Chalmers' training into it.

Daniel Ryumugabe: As a member of the Chalmers Center's Global Fellowship of Trainers (GFT) and a Director of Transformational Impact at Urwego Opportunity Bank, I began piloting BHH curriculum in September 2009. After the first year, we've successfully trained 30,351 Urwego clients in the first 2 modules of BHH's 9-module curriculum. The way the training works here is that we train Master Trainers from all of our operational areas; they then train loan officers; and then the loan officers train clients.

Chalmers: That's an interesting way to go about it. Was there a reason behind such a localized approach?

Daniel Ryumugabe: Yes, we did not want centralized training for a number of relational and logistical reasons. We very much wanted training to be decentralized believing it's more effective for the clients to receive training from the loan officers they see and interact with on a regular basis. You know, someone already involved and invested with them and their communities, instead of a stranger coming in and then leaving. It's important for us to build up these relationships with trust as we engage with them over time.

Chalmers: Explain your clients to me.

Daniel Ryumugabe: Urwego's clients are strictly traditional microfinance clients. They're community banking groups that are, for the most part, credit-led, handing out loans on average of $165 US. We do, however, have some savings clients that are not part of the community banking methodology. We have embarked on training some of them as well. In the near future, we also plan to train agricultural clients who belong to cooperatives.

Chalmers: In your experience working for Urwego over the past four years and what you've learned through your Chalmers training in Microfinance With Education (MWE) as represented in our new BHH curriculum, what has MWE brought to the development space that traditional microfinance lending alone has not?

Daniel Ryumugabe: Let me answer that important question with the feedback I've gotten firsthand from people in the field experiencing microfinance with and without BHH training.

An overwhelmingly positive aspect of the BHH training that's been embraced among the rural poor is the biblical worldview the training is contextualized in. Often, in rural areas in Rwanda, you encounter people who think their businesses aren't doing well because they're cursed. Some blame ancestral curses or other attributes of animism for their failed enterprises. So we tell them about the Bible verses embedded in the BHH modules and tell them that even if they truly believe their business has been cursed that we still have a God who is more powerful than that and can overcome it. We've had very good reactions from people when we give God a place in their specific lives, within their specific circumstances and businesses. They start to see that God cares about them individually and relationally and that helps them better see their own dignity.

These training modules also encourage people to work. A lot of feedback we've received from clients is that the training encouraged and equipped them in how best to present their businesses — like, cleaning their work areas better and organizing their displays in order to increase their sales. It's through business improvements like these that the clients have started to make the connections between a clean, well-presented business and improved performance.

A particularly interesting impact coming out of piloting BHH here has been clients claiming that the modules have transformed their actual business behaviors, meaning they're respecting their neighbors as people created in the image of God. Some have even reported on how they've taken that mindset into their relationships with their customers and competitors, refusing to cheat them for personal gain.

Chalmers: The over-arching narrative I'm getting here is that BHH is changing the entire context within which these people are conducting their businesses and living their lives and navigating their relationships. Would holistic transformation be a fair assessment of what you see happening within these communities in your work?

Daniel Ryumugabe: Yes, absolutely. I think what you see on the ground, and what BHH offers, is a very holistic, gospel-focused ministry coming alongside of Urwego's financial services that are together really addressing the realities of all aspects of these people's lives. Let me give you two examples:

A former-Muslim woman (who recently converted to Christianity through Urwego's relationship with her), named Mariam, sells foodstuffs at a local market in Rwamagana. She says the BHH modules have helped her be a more ethical businesswoman. By seeing how to better present and organize her business through marketing and hygienic measures, she's been empowered to "tell the truth" to her customers and no longer cheat them on the scales when weighing their rice for purchase. So essentially, training a woman in running a clean, organized business and her seeing the results of that work improving her livelihood, has spurned her to become a more ethical person.

Jacqueline lives in Nyamata and sells clothes. Because of her training she's been able to relate more easily to others in her community banking group. She said she now feels confident enough and empowered to manage her loans herself without having to seek outside questionable assistance. Because of her newfound confidence in realizing her own capabilities and dignity, she's grown in her relationships with her customers offering better customer care than before her training. She's also learned to choose better products that increase her profit margin.

Chalmers: These are some great stories. I'm curious, it seems a lot of the impact you've been describing has been business focused. Is that a correct assumption?

Daniel Ryumugabe: What our loan officers are telling me are great stories about the BHH training. And what's been the most striking impact this curriculum has had on them is definitely the business aspect. The most outstanding metric we've received from the field is that "there is no way we would have been given the opportunity to learn business and business management skills outside of these modules." You see, the government of Rwanda is trying very hard to educate people all over the country — but that education is mainly health education. The government does not educate people in business and entrepreneurship. Over and over again, our clients have told us that they never would have been exposed to business management skills if they hadn't joined a community banking group.

Chalmers: So, essentially, BHH curriculum grouped with microfinance is filling a pretty large hole currently not addressed by the Rwandan government or Microfinance Institutions in your country.

Daniel Ryumugabe: Yes, that's correct.

Chalmers: Incredible. How are you going about measuring impact moving forward?

Daniel Ryumugabe: We're currently working with the Association of Christian Economists and graduate students from the University of San Francisco on developing an impact measurement tool. We then plan on conducting an impact assessment and survey later this year. For now though, we really want to focus on training, getting as many loan officers and trainers through the complete training process as possible. That's 233 Urwego staff members to 40,000 clients.

Chalmers: That's quite a ratio. And quite a potential for impact.

Daniel Ryumugabe: We shall see. Our work is cut out for us. But to reiterate an earlier point, we've only trained these 30,000+ people in roughly 22% of your new BHH curriculum. So the transformation we're hearing from the field now should reflect that figure. I think the Lord has great things in store for people here as this type of education unfolds.

(Interview by Ben Thomas, the Chalmers Center's Director of Marketing and Communications)