In Uganda, URCSF is working to provide rural farmers with agricultural training. The challenge that followed is how to bring much needed resources to farmers to help them put trainings into action and lift themselves and their families out of poverty.
Traditional loans are not modeled to meet the needs of farmers, who have irregular, seasonal cash flows. In addition, banks are typically unwilling to reach those in the lowest income bracket, making loans unattainable to subsistence farmers.
We set out to structure an agricultural-specific microloan program to provide farmers a path to increasing their crop productivity and economic opportunity.
HOW I USED THIS METHOD
Lucky to have an already established network of URCSF solidarity groups, we started by conducting Group Interviews to better understand how local farmers run their farms and how they saw a potential loan program fitting into their lives.
One important factor we were trying to assess was the importance of grace period versus loan amount. By creating some concrete examples as Conversation Starters for potential borrowers to choose from, we were able to elicit quick, tangible responses and hear explanations for their thinking.
For example, would you prefer a 1,000,000 USH loan with 4 months grace period or a 3,000,000 USH loan with 2 months grace period? Almost everyone chose the former, as the alignment of grace period with the harvest was the most important factor in their decision-making. However, when I crossed off the 2-month grace period and changed it to 4 months, opinions shifted.
This activity also pinpointed the importance of timing. One interviewee explained that their decision would be based on the season. If it were July, he would be confident to take 3 million USH, but since it is now a rainy season, the coffee would never dry in time and he would not.
WHAT I LEARNED
Using this method during my field research opened the door to a number of useful insights that we were having difficulty coming to from just interviews alone.
Asking participants how they imagined the structure of these loans working was leading to a lot of dead ends and it was difficult to get participants to share details about what they most desired. Conversation Starters, however, highlighted for us how community members would make their choices when it comes to the financial decisions involved in taking out a hypothetical loan.
Furthermore, thinking on the fly and being flexible with these Conversation Starter prompts allowed me to continue sparking new discussion with community members around what components of the loan were most important to them.