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What would be the best way to reduce the price hikes?

I would like to comment on the price increase that has affected the micro finance business where some clients cant even pay back because they took the funds thinking they could get the returns as fast as possible but it wasn't the case.

Advise what we can do to help our customers pay us back as fast as possible.

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Permalink Reply by Jami Hubbard Solli on December 9, 2011 at 12:03pm

Dear Mr. Bwempazi,

This is an old post and I wonder if you are still having difficulties?

And, are you referring to the food/commodities inflation throughout Africa? Why not try to restructure the loans out over a longer period, reducing payments in the near term in the hopes that this crisis will soon pass? I was astounded that prices were up close to 30% on sugar and wheat etc. when in Kenya and Uganda this Sept. Clients I am sure are suffering and MFIs can help rather than rush to seize collaterals etc. I would sit down with each one in repayment difficulty and look at their cash flows carefully to see what can be done.

Good luck!

Jami

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Permalink Reply by Natwijuka Colin Bwempazi on December 12, 2011 at 8:40am

Hello Jami,

I am happy for the reply which was too late as the prices had hiked in Uganda in May but all the same the price of sugar, food and fuel have not reduced by December 2011 therefore the question still stands.

Regards

Colin Bwempazi

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Permalink Reply by Jami Hubbard Solli on December 12, 2011 at 9:25am

Hello Mr. Bwempazi,

Yes, sorry for this, but I just heard from a lawyer in Kampala this morning that prices remain up 31%. He works as a consumer advocate and we were discussing the situation online . I suggested that consumer groups form cooperatives and try to exchange information on pricing across Africa. For example, if sugar costs 10 cents less in Kenya, the Kenyan consumer advocates would call their contacts in Rwanda and Uganda who would check to see if they have a commodity that costs less than in Kenya. Thus, the Kenyans would send a truck load of sugar and the "correspondents" in Uganda would ship back a truckload of tea or grain or whatever. MFIs could easily mobilize and do this on behalf of clients/borrowers who have goods to sell, thus extending the value chain. If MFIs and consumer groups mobilize to buy in bulk, this would help reduce prices.

Anyway, that is my 2 cents worth of input on the issue. If you would like to be connected to my friend the Ugandan lawyer/consumer advocate please send me an email to my Gmail address at jamisolli Gmail is dot com.

What MFI do you work with?

Best regards,

Jami