From an Ndimugezi Cashbox to Canary Wharf and Back

By Gwyther, Matthew | Management Today, January 1, 2011 | Go to article overview

From an Ndimugezi Cashbox to Canary Wharf and Back


Gwyther, Matthew, Management Today


It's banking, Africa-style: Ugandan loan societies that pay interest to investors, or a mobile phone scheme making 670 million payments in Kenya. Barclays plans to draw on such energy and spin a thread from the City to an pounds 80 loan for fresh veg, reports Matthew Gwyther.

Where better to consider what comprises 'socially useful' banking than at the small village of Ndimugezi, an hour's drive east from the Ugandan capital, Kampala? The 30 members of the Village Savings and Loans Association (VSLA) - 16 women and 14 men - are conducting a regular meeting, with the padlocked cashbox placed prominently on a table in the middle of the compound.

VSLA chairman Patrick Isabirye calls the meeting to order with a prayer The members agree to put aside 15,000 Ugandan shillings (pounds 4.10) for the welfare fund. Then it's down to business. In August, Abdul Bamingba took out a USh300,000 loan (around pounds 80) - a large sum in a country where many earn USdollars 1 a day - to buy vegetables to sell and to support his wife and eight children. Bamingba has been repaying it little by little, at 10% per month, and has found it a bit of a stretch. However, this is not an unusual rate in such associations, which charge anything between 5% and 20% per month, according to what they view as the risk. Association members share any interest earned, according to their stake in the total pot.

Joy Tumwesigye, more confident and articulate than Bamingba, tells how the VSLA has helped her improve her lot. Several years back, she borrowed 800,000 'bob' (pounds 220) for a cow. She also borrowed to send two of her children to university and opened two 'simple hotels'. She has earned more interest than anyone. A round of applause for a true entrepreneur, maybe even a banker, in the making.

Unusually, this meeting is being attended by a professional banker - Antony Jenkins, chief executive of Barclays Global Retail and, with 14 million customers, one of the most powerful in Africa. Barclays has been in Africa since the late 19th century and is well established in 11 countries. Jenkins is on a whistle-stop tour. The bank has a good history of CSR, working with bodies such as Unicef.

Barclays was a partner in the groundbreaking pounds 2.5m Ugandan Katine project, run by The Guardian, Farm-Africa and the African Medical and Research Foundation.

Most recently, Barclays has launched its Banking on Change project, a three-year, pounds 10m commitment to use savings-led microfinance to help half a million poor and unbanked Africans. In Uganda, Barclays wants to recruit 35,000 people and persuade them to deposit the VSLA cash into a special feeless but interest-earning account - the first rung on the ladder of formal financial services. This has advantages: not least, safety. The cashbox is vulnerable in a country where security is a real problem. The Barclays down the road in Iganga is protected by a guard with a pump-action shotgun.

MT has been invited by Barclays to Uganda as the debate in the west about banks, their bonuses, 'social use' and structures is as heated as ever. (Back in Kampala, I had watched George Osborne announcing his cuts live from Westminster.) It's a long way from the tin box on the table in Ndimugezi to Canary Wharf - and to Bob Diamond, who becomes CEO of Barclays at the end of March, a Master of the Universe who took home pounds 22m in 2007. But in our globalised world, the link is there - a thread that leads from the highest echelons of investment banking, with its quants, derivatives and CDOs, right down to pounds 80 loans for fresh veg. It's a vital link for the long-term welfare and development of Ugandans.

The phrase 'socially useless activity' was coined by Lord Turner, chairman of the Financial Services Authority, to describe a host of investment bank trading activity. Barclays protests strongly that it does much of social worth and - with its universal status as retail and investment bank under threat - it needs to prove its point. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

From an Ndimugezi Cashbox to Canary Wharf and Back
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.