(ERGO) – Getting access to a loan has enabled widowed mother, Fowzia Jama’a Haybe, to turn her life around when it seemed there was no hope.
She was forced to sell her three-room house in Jigjiga, in Ethiopia’s Somali regional state, to secure the release of her two sons being held for ransom by people traffickers in Libya. She used the $1,7000 from the house sale to pay off the $8000 demands for each of her sons, who were trying to migrate to Europe.
As the sole breadwinner, following her husband’s death in a road accident in 2015, Fowzia then sank into poverty and misery and could not see a way out.
“After selling my house, I had nothing left and was forced to live in a hut made of sticks and old scraps of iron sheets. Life became very hard until I got the loan,” said Fowzia.
In 2018, she secured a loan from Ray’s Microfinance institution in Jigjiga that enabled her to get out of the vicious cycle of poverty.
Ray’s lent Fowzia 12,500 birr ($450) at an annual interest rate of 18 per cent to set up a business, under a microfinance scheme targeting 45 poor families. She invested this in buying shoes from the capital Addis Ababa to sell in Jigjiga.
“They lent me a small amount of money but to me, it felt like a gift because it was something I was able to use to change my life,” Fowzia told Radio Ergo.
She paid off the loan and interest in just six months.
She is planning now to open a new shop and buy a plot of land to build on with the $3,671 she has accumulated. She says she might take a second loan to develop her business.
“I live in a two–bedroom house that costs 1,500 birr ($53) a month. I am somehow financially stable,” she said.
Fardowsa Abdi borrowed birr 20,000 ($714) from Ray’s Microfinance at 18 per cent interest to start a clothing business in Jigjiga. She brings in merchandise from Togwaje on the Somali border.
“I was given the loan in April and agreed to repay within a year in installments of 1,000 birr. I have already paid two instalments and I have earned 50,000 birr now,” said Fardowsa, a mother of seven.
She has been able to pay her children’s school fees and the monthly rent of 1,000 birr and feed the family.
“I am happy that I can put food on the table and even think about building a good future for my children. My husband and I are now working together to run the business,” she said.
Mohamed Amin Sharif, manager of Ray’s branch in Somali regional state, which opened in 2015, said they are planning to extend the microfinance scheme loans to 50 more low income people.
“Our plan is to support poor people. These people do not know the procedure for applying for bank loans. But when they come to us, we assess their situation and ask them to come with a referee, then we proceed to give them a loan,” he said.
