Getting access to a small bank loan enabled widowed mother Fowzia Jama’a Haybe to turn her life around when it seemed there was no hope.
She had been 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. The $1,700 she got from the sale allowed her to pay off the $800 demand for each of her sons, who were trying to migrate to Europe.
But as the sole breadwinner, after her husband was killed in a road accident in 2015, Fowzia sank into poverty and misery until accessing the loan from a Somali–owned bank, Ray’s Bank, in Jigjiga.
“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.
Ray’s Bank lent her 12,500 birr ($450) in 2018 to set up a business under a microfinance scheme targeting 45 poor families. She invested in buying shoes from the capital Addis Ababa to sell in Jigjiga.
“They lent me small money but to me, it felt like a giftbecause it was something I was able to use to change my life,” Fowzia told Radio Ergo.
She paid off the loan 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 might take a second loan from the bank.
“I live in a two–bedroom house that costs 1,500 birr ($53) amonth. I am somehow financially stable,” she said.
Fardowsa Abdi borrowed birr 20,000 ($714) from Ray’s Bank 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 50,000 birr now,” said Fardowsa, a mother of seven.
She is able to pay her children’s school fees and 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 Bank in Somali regional state, said they are planning to extend the microfinance scheme loans to 50 more 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.
