Sunday at the Cash Round

Sunday our Executive Director Anne and two German volunteers from managers without borders were invited taking part at one of the local cash rounds. Time to explain the concept of cash rounds and telling about this specific cash round…

If you take a loan at one of the microfinance banks, it means you pay something between 20 and 25% interest rate. As most people are afraid of managing the interest rate, the cash rounds got developed… the cash is floating in the round and gets paid out without interest… this specific cash round has 41 active members, they meet every Sunday (and this is a must!) and every active member needs to pay 50.000 UGX.

Every Sunday the money collected (2.050.000 UGX)¬†gets paid out to one person. This person also needs to take care of the lunch at this very¬†Sunday. The cash round we visited registered as a legal institution at the county level, has chairperson, vice chairperson, secretary, treasurer and a few more executives installed. And they take it very serious! Since their funding 8 years ago there has never been someone missing the payment or any other kind of issue…

The strictness kept this cash round alive whereas a lot of others do not last for long… The decision on who becomes the “person of the day” being granted the money is decided every week based on the urgency of the problem… so in one cycle everyone is granted the money once, the order could be changing depending on the problems on the table… Also the cash is never to be used just for daily groceries or similar… it has to be a specific project like a business investment or an investment into a house / building. This needs to be proved before the cash is granted and also needs to be shown afterwards…

We finished our visit with a very nice lunch… so a lovely Sunday to learn about a very good initiative to keep cash flowing without huge interest rates!!!

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