Why you should have to pay money back

My name is Caroline. I’m an entrepreneur.

Eight years ago, I was looking for a loan to renovate. After visiting several banks, and always being told to ‘come back tomorrow’, I was fed up and about to give up, until I ran into an EFC signpost. There, I explained my needs to the loan officer I got the loan within three days!

That first loan was for 1.5 million Ugandan shillings (about EUR 350). I’m currently paying back my 8th loan, this one of UGX 30 million (about EUR 7,200). I have great plans and will apply for a new and bigger loan when the current one is paid back.

Originally from the border region with Kenya, for 15 years, I have been living in Kireka, a suburb of Kampala. Out of my four children, one is working for Solar Now Uganda, selling solar energy solutions, one is working in Kenya and two are still in school.

You have to pay money back

There is work for those that want it. If you are willing to put in the time, you can earn your way – little by little.

Caroline Cherotic, entrepreneur

I am an entrepreneur. I made my starting capital selling chapatis and mobile money [financial transactions using a mobile phone ] in a kiosk. With that capital, I bought some unfinished property to rent out to local workers and students of a nearby university.

20211025 EFC Uganda Caroline3

I used my first loans to renovate my apartments, turning what had been little more than walls and dirt floors into cosy living spaces, with light, power and tiled bathrooms and toilets and covered verandas. Where I originally asked UGX 50,000 for two rooms (about EUR 12), now, I charge 350,000 (about EUR 84). Many of my tenants are from the university – one of my rooms is rented out to the headmaster of another school.

It’s a point of pride for me that I earn enough to take care of myself and my children, that I keep up with loan payments and still set something aside.

One of the biggest problems Ugandan people face, I believe, is a lack of financial savviness and follow-through. People will get loans – from either local banks or international sources – and then promptly forget why they got it. They will spend it on luxuries – like make-up, clothes or even extra meat – and end up incapable of paying back the capital of the loan, let alone the interests. They forget that the money wasn’t theirs. They will then feel obliged to take out another loan to pay for the first one, and so on and so forth. For me, this can only end one way: in destitution or corruption – and neither one is good for the people or the country.

For me, it’s simple. You get the money for a particular purpose, so that’s what you use it for. For example, I will lend money to invest in my apartments, for which I can then charge more. You spend the money so that you’ll be able to earn it back, setting it aside whenever possible. The capital isn’t to be touched – the profits will be used for food or will go to the bank for a rainy day. That’s the way I’ve always done it, and my success proves the validity of these simple guidelines.

Women can be strong.

They can work like a man – if not better.

I’m an independent woman. Married to a soldier, always off who-knows-where, I cannot count on getting any support from that end – whether he sends money home or not, my children and I need to eat. Running a chapati stand, they are never hungry. Many women, I believe, depend too much on their man, letting it spoil their business. With me, it was always just between me and EFC Bank. And we get along just fine.

20211025 EFC Uganda Caroline4

BIO has invested in EFC Uganda, a microfinance deposit-taking institution, both directly and through Africinvest Financial Sector.

Caroline Cherotic is one of EFC Uganda’s many clients. This is her story.