Mwagale helping smallholder farmers in Tororo thrive

It was a heaven-sent opportunity in 2016 when Barbara Mwagale was asked by a businessman to help him start a micro lending institute. That was based on the knowledge and skills acquired from her former workplace where she had worked as a credit officer at the time she was pursuing a bachelor’s degree in Business Administration at Makerere University. 

“The condition was if the business picks up, l would get five per cent of the share and also earn a salary of a chief executive (Shs1m). Six months down the road, l had generated revenue worth Shs149m as net profit, got more staff on board and he had even started a smaller business within,” recalls Mwagale.

However, at this point, when Mwagale asked that the partner to fulfil his side of the bargain.  She was instead accused of incompetence and told she did not have a university degree. 

“He said he had an experienced person from Brac ready to take on the office. Meanwhile, he offered me a job to sell him katogo (matooke fingers cooked with a variety of sauces),”  recalls Mwagale.

Unlikely start

It was upon this background that Mwagale reminded him that she was the heart behind his business and she was ready to go and start her own. He laughed it off as an empty threat because he knew she had no capital. 

“He paid me off Shs700,000 with which l paid for my basic needs and remained with Shs200,000. Thereafter, l printed out loan applications forms from my hostel room and started calling up former clients to tell them l had started my own microfinance with lower interest rates. In regards to making the long trek to office, I told them there was no need as I had eased their lives by finding them in the field,” she says.

The next day, one of the clients from Kabalagala asked for Shs200,000 and straight away Mwagale boarded a taxi with her forms and later disbursed the loan to her. 

“My first client was Gorreti Nabulime from Kabalagala and from her, I learned that loyalty and honesty saves the day because had I been otherwise, even after calling her, she would never have followed me to my new business. Moreover, she never defaulted; making business easier,” says Mwgale.

Having been in the trade for a while gave Mwagale an upper hand in costing her loans. “I also relied on knowledge garnered from university to ensure my accounts were well balanced,” she says.

Growing up

After calling up former clients, she also started writing messages to friends, telling them about her new business whose interest rate was only five per cent. 

“The strategy was successful but with time I got hit by challenges such as a high default rate because I was giving groups loans without collateral security. That is because I had decided to operate on a model of group lending where each member in the group is security to the other as long as there is proof of a resident or land lady. While the model had worked so well with some groups, it proved terrible for multiple borrowers who borrowed and stealthily shifted to unknown locations. I did my best to remain afloat but regardless of how hard I pushed, the business hit rock bottom and eventually totally failed,” she recollects.

Mwagale had been attending mentorship sessions until the end of 2019 and knew it was time to change the model to farmers’ groups specifically dealing with Village Savings and Loan Associations (VSLAs).

Today, she runs an agro finance company; Kango Microfinance that supports rural women and youth who are into agriculture and small businesses with the purpose of creating job opportunities in communities, food security, increase in income levels and promotion of environmental sustainability.

Situated in Tororo – Nagongera, Mwagale is inspired to keep working because of her desire to see women and youth rise out of poverty and become financially independent.

She gets the word out through customer referrals, word of mouth and media platforms (such as, website, Facebook and LinkedIn and WhatsApp farmer groups).

She incurs operational costs such as trainings in agronomic practices, financial literacy and business development, airtime and data, transport, lunch for the field persons which is no less than Shs1.3m per month. 

“We have no salary for now because we are working with volunteers from the farmer groups. I allocated most of the work to myself and a local business partner until when we break even,”  she says.

Her biggest sale so far has been between Shs5m and 6m as revenue.

Mwagale has been fortunate to undergo several trainings and mentorships through Global Business Lab- Makerere –Entrepreneurship, Immuka Venture - Mentorship programme. SEED start up programme - Scaling up in Agribusiness, Makerere innovations and Incubation Centre - Women Entrepreneurship programme, Yunu Environmental Hub - Start Now programme, Sustech4Africa - Mentorship and Business Development, New Generation Programme (NGM) - Personal development and women in the market place, SDGia Accelerator programme - Start-ups in Agriculture value chain, OutBox - Digital Marketing, and National Farmers Leadership centre - Mind set change. 

Challenges 

Mwagale has experienced setbacks on this journey, especially limited resources. 

“There is never enough money because while I need to satisfy all my clients, sometimes I fail because there is not enough money to go around,” he notes.

Unfavourable climate such as droughts, and excessive rains that affect the harvest are a major setback. 

“The climate changes affect agriculture because there is little or no certainty on when to plant thus low yields that translate in unstable savings,” she says.

Future

Mwagale says the future is bright and promising, especially those in agriculture value chain. 

Research by the Aga Khan University in 2015 showed that, only 12 per cent of young adults see farming as an appealing profession while 48 per cent want to go into the  business. Interest in farming is only prominent among those between 31 and 35 years. 

“Therefore, with value addition, we have an upper hand to exploit the current supply of labour and demand for products,” she says.

There is reason to celebrate. They have registered 45 farmers’ groups with membership of 30-100 farmers.

The microfinance also distributed soybean seedlings. They started with 500kgs in the first season accumulating 10 tonnes in the subsequent season.