Another great day in Bukura/Lufumbo

August 15, 2009

About a month ago, I wrote an entry about the day I spent visiting businesses started by the VEF business mentor named Father William Musando in a town called Bukura. I went back to Bukura today to interview businesses for the profit sharing study, and I was just as blown away by the success of the businesses there as I was the first time I went.

Last time, the main focus of my visit was to see whether or not the businesses I interviewed were still in operation or not. I found that the vast majority of them still were, and of that majority almost all of them were extremely successful. Today, in conducting the profit sharing study, I gained a new appreciation for just how successful these businesses are. Not only are they still in operation and not only are they doing well, but I found that almost every business had diversified and spun off one or more new businesses. I also found out how the group members use savings systems and diversification to aid each other and cushion the group in case of emergencies or unforeseen problems.

One of the best examples of this complexity was the “Jerusalem Group.” The group members received the grant in 2005, and all five initially worked together selling clothes. Over time, however, they saved profits from the clothing business and, one by one, opened up businesses that each member took over individually. So now, in addition to the clothing business, the members are running a bookshop, a vegetable stand in the market, a clothing shop separate from the group’s shop, and two household goods kiosks. The members spend the majority of their time at their individual businesses, but they also take turns running the group’s clothing business. The members keep their individual profits, but every month they each bring 275 shillings to pool as a group (1,375 KSH total). 1,000 of that pool goes toward increasing the stock of the clothing business, and 375 is given to a different member each month on a rotating basis (called a merry-go-round system). Finally, every five months the group takes a percentage of the accumulated profits from the group clothing business and splits it among the five members.

As you might imagine, that interview took awhile to get through because the system was so intricate! Many of Father William’s other groups had similar systems. In addition to keeping each member occupied full-time, this diversification is an excellent way for a group to survive the types of seasonal fluctuations that many businesses in the area face. If one of the businesses is in a down season (say, for example, that the maize harvest just happened and the price of maize is low), the group will still have revenue coming in from a number of streams, and in that way it will be able to absorb the lack of money coming in from maize.

I think that, in addition to Father William’s excellent mentoring skills, the VEF grants, and the business training, there is just something in the water in Bukura and Lufumbo that enables these entrepreneurs to turn fledgling businesses into mature, thriving enterprises. Each business that we visited had an inspiring story to tell about its success and the way the members worked together. Hearing those stories never gets old.