Micro-financing Improves Housing in Dar es Salaam

By Salome Labelle
Rooftops Canada Intern

Symphroza Njuka is a 62-year-old widow who lives in Dar es Salaam, Tanzania. In October 2007, she joined a Savings and Credit Cooperative Society (SACCOS) set up by Rooftops Canada’s partner, WAT -Human Settlements Trust.

Ms. Njuka is a member of a savings group (or Upatu) called Kupongezana, which means “congratulations” in Kiswahili.  The five members are neighbours living in Hannanasif – one of the city’s oldest informal settlements. The group obtained a loan of about $1000 from the SACCOS with a one-year repayment period

Ms. Njuka has already used her share of the loan to raise the ceilings of two rooms in her house, allowing better air movement and lowering the temperature and risk of disease. She also replaced the rusty, leaking corrugated iron sheets on her roof.

Ms. Njuka said it was difficult to get loans to upgrade housing. Local micro-finance institutions lend money to low- and middle-income earners for entrepreneurship purposes only. Most other institutions require title deeds or goods such as television and sofas as collateral.

Ms. Njuka says, “I was afraid to take a loan after I saw how some of my relatives and neighbours lost their home equipment and goods after failing to pay back their loans on time.”

The SACCOS system uses the Upatu group members as collateral for the loan. Each member is responsible not just for his or her own share, but for the whole amount. This social pressure encourages borrowers to repay consistently and on time.

Mrs. Njuka is paying back her first loan, and she has plans to borrow again to build a septic tank and toilet. All these improvements will help her and her family live a longer and healthier life.