Microfinance Horizon

The Story of Color Me In

By Sarah Grant, Founder of Color Me In

Introduction

I started Color Me In! two and a half years ago in Sept. 2008 after returning from the Peace Corps in 2007. While living in the rural areas of Zambia, I was profoundly influenced by three things:

One: While working as an extension agent for the Forestry Department, I was struck by how many issues related to poverty could be traced back to deforestation within the country. In a country where close to 80% of the population lives as small scale farmers and mono-cropping has become the norm, the systematic and unconscious cutting down of trees was influencing the quality and availability of water, labor collecting firewood for the young and elderly, increased workload for females, decreased crop yields, poor nutrition, and droughts.

Two: People in my village faced a huge lack of resources. I remember spending months and months with women’s groups just trying to figure out where we could source $200 from to begin keeping poultry. Credit and savings are not highly developed both within the culture and economic climate of Zambia – to get a loan means needing to have collateral, a job with a pay stub, and the personal skills to open a bank account. The other option is often to go to donor agencies, however there were no NGO’s focusing on lending where I was located, and donated funds always seemed to disappear without results easier than money you are held more accountable for with an interest rate.

Which leads me to Three: The third item of major influence was the often well-intentioned, but ultimately unproductive efforts of international aid organizations. I heard people talking about forming clubs just because there were groups giving supplies and bicycles to support groups. I witnessed blatant dishonesty on the part of organizational reports to make it seem as though things were going better on the ground than they were for the donor community. And I saw the attitudes that easily formed out of human nature when resources and material items things are given freely to a community without proper responsibility, accountability, and ownership. Like many Peace Corps Volunteers, I left feeling a bit deflated about large development efforts and skeptical of the results that many NGO’s were boasting.

In 2008, five months after returning from Peace Corps, I was not having luck in the US economy finding a job and found myself increasingly drawn back to Zambia. I bought a plane ticket and returned to live in the village for another three months. It was during this time that I began to think about what I would do differently if I started and NGO – how I could use all that I had learned about the reality of sustainable development, and what kinds of services would really be helpful within this unique country. Returning to the US, I got a day job, bought Non-profit for Dummies, and began the process of building what Color Me In! has formed into today.

Vision – We envision a world where everyone can access the resources that they need to build a life based on their full potential.

Mission – Our mission is to empower communities in Zambia to build an economic and environmentally sustainable future through pairing micro-loans for business development with local tree planting and skills development.

Methodology – CMI uses a “Green Loan” model that fluctuates some based upon the specific client, and incorporates both tree planting and community outreach into the repayment plan. To date, we have been offering lending services that look something like this:

• A group or club living in the rural to semi-urban parts of Zambia sends in an application for a loan to begin or expand a business idea.

• The application is evaluated by a Selection Committee composed of CMI development workers both in Zambia and the US.

• If the loan is approved, funds are raised in the US and the loan gets underway as soon as possible.

• CMI partners with five small locally-run organizations in Zambia to help monitor the transfer of funds, and work with the client group on any needed skills trainings both in business and agro-forestry.

• Client submits quarterly reports to CMI and photos/video when available.

• The client group can repay their loan up to 80% by planting one tree per USD borrowed. They can be any species and people often choose fruit, timber, or nitrogen fixing species to plant around their fields, gardens, homes, schools and fish ponds.

• The remaining 20% the client group must pay in cash, however they can choose to forward it to another group, school or clinic in their area to help them begin a business or purchase needed supplies.
  

Why do it this way?

We developed this alternative method of repayment for two reasons:

1.   Upon beginning CMI, we did not (and still do not) have the money for permanent offices in Zambia. Although we rely much on volunteer partner organizations and they are very skilled, resources are limited and we cannot afford the time nor be sure of the integrity of the process if we were to collect cash from all of our clients. Credit is not a highly developed practice in Zambia yet, and it would not have been a smart business decision to demand cash payment and then not be able to follow-through on the weekly basis needed in person to collect the installments.

CMI client works on sewing school uniforms through a loan for her women’s club.

The cash forward is also a way to avoid having to deal with financial transactions BACK to CMI from abroad without offices on the ground, especially challenging when most of our clients do not have frequent access to email, scanners or faxes. This also allowed the clients to take more ownership over their earnings from the business and invest it in addressing an issue that means something to them within their own community. It is easier by human nature to mis-use the support of someone living in another country who you have not met, whereas within your own community there is a higher level of responsibility to integrity that most feel.

2.   Deforestation is a key issue in the country and this was an opportunity to leverage our call for repayment and accountability with a chance to educate and put into practice afforestation. Tree seeds can be found for free in most places, it is a valuable skill and easy to learn, when integrated into many of the land and resource based businesses people were starting, it can be a big help in the long run as a perma-culture set up, and we found that people were willing to do it.

Target Demographic and Outreach – We work with clients who are located in 4 of the 9 provinces in Zambia. Most are located in a village environment 10-40km from a boma or local town, while a few others are set within a semi-urban area and may even have their own website and frequent access to email. We have been able to support loans with women’s groups, home based caregivers, HIV/AIDS support groups, the physically challenged (“differently abled” as it was put to me by one of our clients), community clinics, community schools, and farming and fish farming groups.

Achievement

Through the numbers, we are however currently working with over fifteen groups of clients servicing over 200 people in the country with loans totaling over $50,000 given in the past 2.5 years. Over 30,000 trees are in the process of being planted and 90% of our clients are in good standing.

Future Plans

Sarah Grant with CMI Partner RFDP Group and client near some trees planted in an abandoned field as a part of their loan repayment for animal husbandry.

On an organizational level, we are very much focused on fundraising in order to support offices in Zamia and full time staff. Until we are able to increase our capacity to this level, we have had to take a time out from accepting new applications and funding new loans. We working on applying to some foundations for grants, and would consider a partnership with a larger NGO if our missions were aligned and it would be of mutual benefit to support our work. We are always looking for dedicated and new leadership for the Board and Advisory Board – people who are willing to take risks and go to bat for this newer method of helping people help themselves and the environment within Zambia.

Message to the readers of Microfinance Horizon

Change is not easy and it takes a long time. A really long time. In many cases we are dealing in human development with human attitudes, and behaviors. It can take a significant amount of effort and time for anyone to change a poor habit – whether it be cutting down trees or biting your nails, spending this years income after the harvest on non-essentials or spending too much of your paycheck out at drinks with friends. Most development efforts are not perfect at first, and one of the best things that you can do in this field of work is to have a flexible attitude, be patient, and look forward to learning from your mistakes. Because there will be many. I am most excited about working on Color Me In’s lending model because I know that it will change and evolve, I know that challenges will come up, but they are all an opportunity to get closer to figuring out a methodology that works.