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* DOCUMENT : 11
“Twahangana is
the way it is” Federation
member, Oshakati, 12 August 2004
Twahangana is the loan fund of the
Shack Dwellers Federation of Namibia serving the needs of the 220 savings
groups in rural and urban areas of the country.
The fund began in 1995 and loans are now available for housing,
services and business. All
loans are distributed to members through their saving schemes. Lending activities have grown rapidly
and by 2004, there were 1,298 small business loans, 579 housing loans
and 727 service loans with a total loan value of almost Namibian $10
million. To date, the government has contributed
N$ 2 million in loan finance to the Fund and almost N$2.5 million has
been donated by international development assistance. In addition, the government has
routed N$ 4.35 million of Build Together loans (a state housing loan
programme) through Twahangana.
However, some 2,000 Federation members have secured land and
this indicates that only a significant minority of those with land feel
able to borrow from the fund for housing.
The main factor preventing more house loans is affordability.
The Shack Dwellers Federation in
The review was divided into three
parts. The first day (Wednesday
11th August) introduced the review group to the problems
and included:
- discussions with the Federation
members of the process and the international team (the preparatory
meeting),
- book-keepers in the Khomos region,
A number of questions were identified
by the preparatory meeting. The
first question asked about the ways in which Twahangana was helping
or hindering the building of a strong Federation. The second question considered whether
or not book-keeping and financial information could be collected and
if this financial information was useful.
The third question was related to the ownership of the Fund and
the strength of Federation ownership over the Fund. A fourth question asked about the future
of the Fund and the final related question requested ideas for strengthening
the Fund.
The second and third days were spent
on four regional visits to the north (Oshana), the east (Omaheke), the
coast (Erongo) and the central region (Odjozondjupa). On Saturday the teams reconvened for a
discussion of the findings with the Federation leadership and Twahangana
Board. Sunday provided
an opportunity to disseminate these findings with a wider Federation
group.
This is a personal account of the
review process. Hence it
reports discussions in a limited number of experiences with highlights
from some other reports.
Critical
challenges for Twahangana
“The Fund is important.
With an income of $300, the government is not going to help.
But the Federation helps” meeting with Federation leaders, 11
August 2004
The Federation leadership (local and
national) in
Ipelegeng Bomma are a savings scheme
with 48 families resettled from the central location of the Single Quarters.
Towards the end of 2000, the City of
There are 19 members with housing
loans and four with land and infrastructure loans. The groups explained that they meet on
Sunday afternoons for up to three hours; loan repayments are a major
focus of their discussions. They
have problems with two to five of the housing loans. They don’t chase people away if they don’t
repay. Rather they talk
to them and come to an agreement, they let them pay at the end of the
month – but often this does not work.
Two families have not been making payments for land repayment
and they have recently been asked to leave.
The active members believe that they gave these residents many
chances.
“We are in darkness” The meeting ended
with a request by one of the members for assistance with their electricity.
There are arrears on their electricity account and they have
been cut off by the city.
Federation leaders described a number
of recognised problems related to loan approvals and repayments. These include the approval of loans for
friends and family members, easy acceptance of excuses about repayment,
lack of real ownership, the willingness of members to repay TVs and
furniture debts before the Federation, poor book-keeping and alleged
misappropriation by some members.
The review team was asked to consider these issues.
At the same time as relationships
between members and Federation leaders have become based around loan
repayments, it appears that internal conflicts have grown. In the Khomas region, the savings scheme
members are refusing to complete the book-keeping and are arguing that
this is the responsibility of NHAG.
This lack of information means that it is difficult to assess
the scale of the repayment problems.
There are also problems within savings schemes.
This was illustrated to us by the story of Habitat II. Habitat II is one of the older schemes
in
The women in Habitat II savings scheme
started meeting for savings and other development activities in 1996.
At this time, they were negotiating with the municipality for
a plot of land. The members lived in backyard shacks and
rented rooms. The municipality
offered the group a block of land for 120 members in 1997. The land was against a steep hill in Hakahana,
a suburb in the north-west of
House building started in April 2000
during the
However, more recently there have
been problems. Some of
the money owned to the municipality for the repayment of the land was
not deposited. It is not clear if this was a problem
with unenthusiastic book-keepers who delayed depositing the monies,
the misappropriation of funds or the municipality not matching payments
up correctly with specific groups.
After some time, the payments were clarified and the municipal
staff came to confirm that the amounts were correct.
However, this is not accepted by all members.
A further problem is that the book-keeper for the Twahangana
service loan had a fire in her house and the books were burnt. It is not clear who owes want for this
small loan ($8,000 originally).
Now there is a group that calls itself The Dissatisfied who want
to leave the savings scheme and make their repayments direct to the
municipality.
In some settlements, the initial interest
in savings schemes remains and the Federation mobilization process clearly
still inspires poor women. The
Federation process is powerful in bringing the urban poor together,
and giving them a real sense of their own identity and voice.
“Twahangana is good. Before Twahangana, I was silent. I could not say anything. Now I go to meetings. I talk.” (Savings scheme member, Oshakati, 12th
August 2004)
However, it seems that the Federation
groups struggle to maintain their collective identity and this empowerment
process when savings schemes are involved in significant lending activities.
The loan repayment process appears to erode the solidarity between
saving scheme members that the earlier Federation mobilization process
generates. Members explained that in many cases the
individual members with loans simply drift away and do not see the point
in continuing with their membership.
However, the Habitat II group demonstrates that some members
are organizing against the Federation because they believe this is the
best strategy to defend their interests.
Another savings scheme in Gobabis argues that their members should
not pay interest, as they are the very poor, they should receive loans
without any additional charge.
Unfortunately there appears to be
little understanding that at least some of the problems with Twahangana
are structural, arising from allocating loans that require full repayment
(with a subsidised interest rate in the case of housing and services)
to low-income women with multiple demands on their scarce resources. Many of the members blamed themselves
for the repayment problems:
“The Fund is good, the problems are
ourselves” (Meeting with Federation leaders, 14th August
2004)
We met
with 34 people from 7 savings schemes in Oshakati.
All but one of the groups had received loans (small business
and/or housing). This was
an active group of very committed leaders.
There was much support for Twahangana and many of the members
noted that Twahangana had made a real contribution to improving housing. However, it was also recognised that members
found it hard to repay the Fund.
There were multiple reasons put forward to explain this problem. Some felt that the Federation mobilised
strongly around housing. People
came to meetings to get house loans but they did not understand the
Federation. Once they have
the loan, they don’t take part any more.
Some borrowers did not even understand how the Federation could
ask for repayments (or for interest) because it was meant to be there
to help the poor. It was
also suggested that process was too complicated and that many members
do not understand Twahangana.
One member asked if it was possible to make the process simpler. Although the members argued that
they owned the Fund, it appeared that they owned the problems rather
than the strategy.
The members wanted the Fund to grow
but they recognised that people are not repaying. “At the end of the day, it is us who are
not repaying.” They explained
that some members were too lazy, others wanted to buy tv’s. They believed that the future of Twahangana
depended on the merits of the Namibian people; if they were good, it
would last, if they were bad, it would all be used up. The primary response to lack of repayment
appears to be coercive. Members
talked about how they should rent out houses for those who don’t repay
(maybe letting the family remain in one room). There were other discussions about how
they might take off the roof or take possession of belongings such as
TVs.
The group explained that members do
not remain active in the fund.
Those who received housing loans appeared to have achieved their
objectives in joining the Federation.
Some of those with business loans were interested in taking further
loans but many were not. We
were told that some simply repaid the loans and then stopped the business
activities. Some of those who took loans did not use
them for business, although they might repay the loan.
The problems of repayment appear genuine
in some cases. In one savings
scheme in
A small group met with us in Ondengwe.
There were 15 people in this meeting from five local schemes.
There was mixed knowledge about Twahangana; some had an idea
of the Fund, others had none.
“Twanhangana is a box with money from outside.
We borrow the money and put it back.”
One of the savings schemes (Okangwena)
has five committed members. They
meet each week, each month they collect $50 and lend it to each other
in turn. Each borrower
pays back $55, that is how they have the money for administration. When two of the younger women at
the meeting talk, it is clear that another of the savings schemes is
struggling. Three or four
members meet each week, one of the women last went in February, the
other one joined in June. There
were three members last Sunday and together the group saved two dollars
that week.
One of the members of another saving
scheme explained that they don’t see the need to save. The group believes it is better to lend
from Twahangana (rather than their own savings) as people are more likely
to repay. Another woman
describes the considerable repayment problems that she has experienced
within her group which has six housing loans.
She is now very uncertain of what to do.
“We have tried many ways to get people to repay. We need more support. We need to sell the houses.”
Some people have managed fine and
repaid their loans and stayed involved, but most do not. Some repaid, some did not repay. Once they had houses, the members stop
being active. (Rosalyn
explained that this was similar in the situation in the South. In the beginning, people were really keen
but when they had houses, they lost interest.) The richer people, they were the worse
payers; the pensioners, they were some of the best.
Many of those at the meeting seemed
to have lost their confidence.
They knew that they should secure repayments from their members,
but they did not know how to do it.
Their ideas to improve the Fund included better checks on affordability,
involving the police, needing a lawyer to follow the Fund, closer cooperation
with the town council as they allocate the land and they would need
to be informed about repossession, and doing something to show people
that they are really serious about repayments.
One member suggested that some kind of insurance should be offered.
It was explained to us that the people
who can afford housing loans benefit from the interest subsidy of Build
Together, the government house-lending programme. The municipalities are reluctant to give
Building Together loans to those with incomes below $1000 (CHECK) and
these families are referred to the Federation.
At the moment, their loan fund is premised on the basis that
the poor can afford the market price for land and infrastructure, and
can build with the interest rate subsidy.
The groups in Ondengwe and Oshakati are grateful for the land
they can receive. The only service they enjoy is water and
for sanitation they use pit latrines.
They ask for and receive a plot.
“The municipality is good.
It tries to help us.”
In other parts of the country, the
situation with respect to land acquisition is becoming more acute. For months the Federation has been negotiating
for land in Windhoek and now the municipality have offered land at $20
a square metre (with only bulk infrastructure). NHAG is concerned that the experience
of building on plots of 150 square metres has not been successful and
plots of 180 square metres are needed.
Hence the cost will be almost $4,000 a plot before site infrastructure
or housing. One group in Gobabis reported that they
had obtained sites for $2,500 but this was only for land and water. In Walvis Bay there has been a long delay
whilst the available land has been developed. The municipality has had to compact the
land and make major investment in bulk services. The costs are $14,000 a plot before site
infrastructure in installed. Both
Walvis Bay and Windhoek have previously expanded using incremental additions
to existing bulk infrastructure.
Now major new investments are required and costs are escalating. The principle of cost recovery means that
municipalities simply pass on these costs. Whilst the principle of incremental development
also remains, these figures suggest it is becoming unaffordable.
Despite these constraints, Federation
members are trying to improve their lives using loans according to the
principles of self-help and cost recovery. As noted above, some members join to secure
housing and once they have these loans they may or may not repay but
either way they leave the Federation.
Some cannot afford to take loans.
They remain and seek to persuade members to repay their loans
in the hope that when they can afford to borrow the capital will still
be there for them.
Concluding
thoughts
The Namibian process and the commitments
of its members to develop the Twahangana Fund have exposed a number
of contradictions in their strategy.
The emergence of such contradictions is not surprising given
that the Fund has been operating for eight years, was initially designed
without significant experience in the Namibian Federation of such funds,
and the scale and diversity of Federation activities have grown considerably. The Namibian process has been successful
in developing a group of leaders with a very good understanding of the
importance of addressing the needs of the poorest members and with substantial
experience in managing loans.
Savings scheme members now have the opportunity to reconsider
their strategies and improve them to take account of what is happening
in savings schemes and the changing external context.
The emerging contradictions appear
to be:
- Support and coercion. The intention of the Federation is to
support its members to improve their lives though better shelter,
services and land security, reduced vulnerability, higher incomes
and close neighbourhood networks.
Whilst members still recognise the significance of the Federation
in building their confidence and capacities, they are spending considerable
amounts of time developing strategies to secure repayments.
In general, they place emphasis on coercion. However, despite these efforts, repayment
problems still remain. Some
groups appear to be disheartened and to have lost confidence. This situation appears to be threatening
the core principles and activities of the Federation.
During the review, a number of possible
solutions emerged. Higher
income households can apply to municipalities directly for housing loans
and thereby reduce the loan portfolio at risk.
Lower income members of the Federation might be encouraged to
build incrementally, with small repeat loans providing an incentive
for repayment and continued involvement.
Some kind of insurance may reduce the risks involved and help
those in extreme conditions. A
greater willingness to reschedule loans with an encouragement to make
at least minimal repayments may also assist.
- Housing mobilization and longer-term
solidarity. Mobilization
around housing has encouraged members to see housing as an end to
their Federation activities.
Despite the fact that many members
are very poor, there do not appear to be self-interest reasons for their
continued involvement in the Federation once they have houses. Members are simply asked to remain to
help others secure their housing and this does not seem to be a convincing
argument for the very poor with multiple demands on their time. Whilst some are interested in business
loans, others (especially the poorest) do not find business opportunities. Federation groups might be encouraged
to think about how the savings schemes can address the other needs of
their members (for example, electricity payments and security) so that
there is a continuing reason for participation.
- Self-help and redistribution. The Federation is strongly orientated
to self-help. In no single
case did Federation members suggest that the state should help with
difficulties around affordability.
Leaders and members have a very positive attitude to the government
which they see as helping when it can and several members mentioned
the state contribution to Twahangana.
However, the municipal policy of cost recovery for land development
is increasing the price of land, infrastructure and service beyond
the affordability of many members.
There is a need for the Federation
to consider how it can use its membership and loan fund to increase
state support to the urban poor.
This focus may also help to build solidarity and expand membership.