New friends, new house

15 gathered together every week for 2 years. On Fridays, they rotated to each member's home to work on that farm. Sharing work on farms is a very common trend added onto these savings groups. And we know the efficiency of having more hands to share the work, not to mention the encouragement. After they work on that member's farm, each free laborer then pays the recipient of the labor with their weekly savings. Wow. We all work on your farm this Friday, and then we pay you our savings for the week.

They save a total of 1,100 RWF ($2.00 USD) per week, 1,000 rotates to the host farmer, and 100 goes into the accumulating fund. They make loans at 10%, and right now the group has a total of 40,000 RWF ($72.73 USD) on account and 24,000 ($43.64) out on loan. Marita uses her rotating lump sum to buy paraffin and soap, Susanne was able to purchase a phone. Francis took a 5,000 loan plus his own 2,000 and purchased a goat for 7,000 RWF ($12.73 USD). Ngendahayo has bigger plans.

Ngendahayo is quite a young man who seemingly spends much time on the farm by himself. Before this savings group, he was isolated. Isolation is a common theme for many in poverty, but here is this young man, hard working, plenty of promise, and his future is soil and toil. His future is poor and alone. Recently, his future changed. Ngendahayo has joined a savings group where he thrives, and he says that he now feels free to meet others. In fact, he is just energized about life. With a supportive social network and 16,500 ($30.00) on loan for materials and nails, he is now building a house … and plans to marry soon.

Mothers Union

The 12 members of the Mothers Union in Butare meet on the 3rd Friday of each month. Each contributes 600 RWF ($1.09 USD) monthly; 500 rotates to one member each month, 100 accumulates on account. The group has a total savings of 12,000 RWF ($21.82 USD) and they make loans at 10% to group members.

An interesting addition to this Mothers Union group is their extra monthly activity. On that 3rd Friday after they pool their savings, they contribute some equal share of expenses for purchasing materials to make mats. With their mat materials, these mothers make as many mats as possible. For any mats made on that Friday and sold later, they contribute 100% of the sales into their accumulating savings account. That's a pretty crafty way that these mothers value their savings.

Mats sell for 1,500 RWF ($2.73 USD). I'll have to take some pictures and then you can place your orders.

Of hens and goats

Velerie belongs to a savings group in Kayenzi that meets every Tuesday. She puts in about $1 every week; $0.90 goes into the rotating amount that goes to one member per week, $0.10 goes into an accumulating savings account.

Before belonging to a savings group, Velerie probably never thought that she might be able to put away an extra $1 per week. She never would have thought that if she could put away $1 for 4 weeks in a row that she could buy a hen for $3.65. Now that she's saving in a group of others who support and encourage her, she sees a bigger picture. Velerie comes each week, puts in a dollar, and soon the ROSCA rotates to her and she receives a lump sum of $13.50!! Velerie buys two hens and is left with money to spare for household expenses, health insurance … I don't know, chicken feed? The ROSCA payout provides her with a large sum of money at once. Money that would have never been around if she just had a little bit each week that seeped away into other, smaller, pedestrian purchases. Now, she has two hens.

Velerie cares for her hens for months and sells eggs in the community. During this time, she has built up $5.50 in egg money. Velerie sells her two hens, adds in her egg money, and she's got another large sum of $12.80 – which just happens to be the going rate for goats.

Velerie now owns a goat. She's not counting her eggs before they hatch (awful metaphor choice – we've moved on to goats now), but she's hoping to sell baby goats when her goat gets old enough to give birth, if she could be so fortunate [her words]. In case you're wondering, the Rwandese aren't big on consuming goat milk or goat cheese, just the goat.

An interesting part of this story, looking at it from our point of view, is that Velerie could have bought a hen without the group if she just disciplined her saving over one month. Only within the group, however, was she able to see a bigger picture and receive a bigger lump sum of money than she would ever otherwise have to spend. The "before" Velerie would never have bought those hens, even if we think she could have. The "after" Velerie invested in hens, sold eggs, and then attained a goat. The "after" Velerie is in business.

For reference: Hens cost 2,000 RWF; egg sales totaled 3,000 RWF; goats 7,000 RWF; Velerie saved 600 RWF weekly.

Emergency giving

A cell group in Shyogwe meets together each week representing 15 different families. Each agrees that the weekly contribution will be 200 RWF ($0.36 USD), which makes the group's total weekly contribution 3,000 RWF ($5.45 USD). After meeting for a short time, there was an incident that changed the way they saved. A single mother in their community became unemployed and had difficulty caring for her 3-year-old child. Economically empowered and mutually encouraged, the cell group intervened.

Each of the members agreed to contribute an immediate emergency fund of 20,000 RWF ($36.36 USD) per person, a total of 300,000 RWF ($545.45 USD). This is an impressive amount of capital. The purpose of this emergency offering: 50,000 RWF ($90.91 USD) per month for rent over the next 6 months.

They paid her rent for a half of a year in advance.

This cell group decided their policies needed to change. Now, the 15 members still contribute 200 weekly, but 150 goes into the accumulating ASCA account, and 50 goes into an emergency fund they can use to support their community. That's how they do economic development.

What can savings group members buy?

Many savings group members don't save much. Many don't have much. Marie-Jeanne was asking a group, "If you have 100 RWF, what can that buy in the market? 1/2 kg of salt is 150 RWF. If you eat a cup of sorghum porridge, that's 250 RWF, you do that twice per day and that's 500 RWF. So you can save if you just miss one cup of porridge each week."

What then? What can you buy when you save that you cannot otherwise?

First, there are two types of purchases, those made from ROSCA funds and those from ASCA funds. Most groups contribute either monthly or weekly into one of each kind of fund.

–

ROSCA is the rotating savings and credit association, so if my group of 10 each saves 100 per week, one week we meet I will receive the whole 1,000.

ROSCA spending is typically:

• school fees, books, and supplies
  
• agricultural purchases like seeds or manure
  
• small animals like hens, rabbits, and goats
  
• household items like soap or salt
  
• clothing, shoes
  
• medical insurance
  

A few people report that their ROSCA amounts helped them clear debts, like one family owed 10,000 RWF for their daughter's wedding and their ROSCA cleared the whole debt in one day. The groups tend to allocate the ROSCA distribution according to the timing of members' needs, but each member definitely gets a turn before the next rotation.

–

ASCA is the accumulating savings and credit association, so one meeting my group may put 500 into ROSCA, and may also put 100 into ASCA. The 100 accumulates until it is large enough to loan out at some group determined interest rate.

Some ASCA purchases have included:

• larger farm investments for seeds, labor, or land
  
• bicycles
  
• phones
  
• home rental and home building
  

Obviously there are varying amounts of what people can save, but there are also different degrees to which the savings and loans enable purchases that otherwise wouldn't have happened. Susanne was very proud to purchase and own a phone; that was a big purchase for her that may create new opportunities for her. In Shyogwe, we heard of a more elaborate use of an ASCA. One group member used a loan to purchase 216,000 RWF worth of musical instruments to donate to the church and for the use of the group. That's about $393 USD. A purchase like that means they already had some money and some purchasing confidence, but then again, they may have never felt capable of mobilizing that much money at one time and paying for it slowly.

Spreading out payments on what would otherwise be inaccessible purchases, that's what savings and credit can do for individuals.

Price of development aid

Prices are interesting. I asked my dad once how much my George Brett rookie card was worth; he responded, "Whatever someone pays for it." What a bad answer. I knew at that young age that my dad had surely fallen to the fallacy of circular reasoning; his answer was worthless. Later in life, I look back and have decided that I owe him because I finally figured it out (I also figured out that my father, too, was an economics major).

Most things are scarce in that there is no endless supply. The more scarce something is, the more an additional amount of that something costs. Salt is very valuable, but additional salt for the average person is not so scarce and not so expensive. Economist magazines are not so abundant on the street of Kigali, so if I'm lucky enough to get another issue (I have only one Christmas edition issue now) then I would gladly pay over $10 USD. So price, what I am willing to pay, depends on the happiness that an additional magazine issue brings me. My demand for an additional unit of something plus the relative scarcity, this is where we get price. Some like to just say, supply and demand. Economics, … whatever.

Let's talk about the price of development aid. In Rwanda, NGOs flooded the market for social services after the war in 1994. There was great need, and there is still great poverty.

Made up scenario to illustrate the price of development aid:

One typical NGO response to poverty is to give a family a cow. The family receives the cow at a price of zero (0). After giving the family one cow, their demand for an additional cow is less than before. If every family in the village gets a cow and more than one NGO is competing to give away more cows, then cows at zero cost are higher in supply, and demand for an additional cow is lower. Now if an NGO wants to give away more cows, they may find that families are willing to spend less than zero to get that cow. What's less than spending zero? You pay me. I mean, if I'm willing to miss out on work that could make me money, there are opportunity costs for me to get your free cow; and if I have to travel to the village center to meet you then I incur transaction costs to get my cow. I find that I'm no longer willing to come get it, that is, unless you pay me. In fact, if NGOs are competing to give me a cow, and it is important for NGOs to fulfill their missions and report back to their donors, then the best strategy for the NGO is to compete on their respective pricing for free cows. That is, the prices for cows become more negative, NGOs pay for meeting attendance and pay extra for transportation allowance.

What is the cow worth to the villager?

That's not the primary question to the NGOs; they like to ask, "Is poverty being reduced?" If poverty is defined by not having cows, then poverty is being reduced. If poverty is defined by not having sick cows … It costs money to keep a cow from getting sick, by the way. NGOs can train people to care for cows, but the cows are not worth very much, relatively speaking. The cow has worth, but is it worth more than my time and effort in taking care of the cow, or worth more than the money spent to buy medicine for the cow? Not when an additional cow is provided to me at negative cost. I can get paid for receiving more zero-priced animals, so my time, effort, and money are better used elsewhere. Possibly, I'll want to devote more time to leisure, and that's a completely rational response.

Prices are supposed to align people's motives so that their pursuit of self-interest is guided by the invisible hand that makes society better off. How does society react with negative prices?

NGOs ask families to take care of their free livestock and to then donate any offspring to the next family in the program. However, neither of these things makes rational sense to the participants. Why invest in the cow? I don't have much money or high expectations for my future and more negative priced cows are available. Why give away the offspring? The same people that gave me my cow can just give my neighbor a cow, I can sell mine, we're both better off. What makes sense to NGOs does not make sense to the villagers because it's not in their best interest. You get the cow at a negative price, sell the offspring for a positive price.

When you artificially change prices, you distort people's choices, their incentives, and their actions. You do not, necessarily, change poverty this way.

The cobbler

So I'm in Africa, and my shoe starts to burst from the seams and a piece of rubber is extending out to the side.

We drive down dirt roads by new construction into somewhat of a city center. We find a concrete megaplex of shops and people. We walk towards the back where it opens up to a great view of the mountains. Then, in the corner, I see old tires, scraps of rubber, and stalls of men with piles of old shoes and shoe parts. This is where the cobblers work.

I was first quoted 100 RWF. That's about 18 cents USD at my last exchange rate. The quote was for him to crazy glue my shoe. I'm not crazy, that's not going to work. I'm going to need a much more expensive fix. I go up to 500 RWF and have him sew it up with the aid of some fancy shoeing tool. Now we're talking 88 cents USD, but believe me, it was well worth it. My shoes are now fit for dancing.

Market rate

I've heard the term "market rate" in economics classrooms, but it is much more tangible when I stand in a market. Kimironko Market is the big one that we go to, and there is an immense selection of potatoes and bananas and anything else that grows in Rwanda. "How much do your potatoes cost?" If the answer seems to high, there are dozens of other sellers with identical quality potatoes. I keep walking around enough and I will learn exactly what the "market rate" is. Everyone in the market knows what the market rate is, too. But again, it's different to get the concept and feel the concept as I walk around and shop.

I bought market rate flowers, recently. Downtown, flowers are cheaper. I have to figure that out, because it doesn't make sense. The flowers don't grow downtown, how do they magically get cheaper the farther they travel? I've bought flowers downtown before, our 2nd wedding anniversary, and got a great deal on an assorted bouquet ($2.69). So, this time, we have friends coming over for a dinner party and it's Friday and it's a new year, so I decide to get Danielle more flowers. Some young men stand with bouquets near a market going uphill towards town, and I pass there on my way home or into town, just near Stipp Hotel. Why not check the prices and save myself a little longer trip?

I pull over, the first young man walks over quickly with his bouquet. Immediately, three others run over with their identical bouquets. Now I'm thinking, maybe these flowers will be market rate. The first bouquet enters my driver-side window under my nose. He asks 2500 RWF ($4.50). In my pocket, I know I have 1000 RWF ($1.80). I ask if he's willing to take 1000. He's not so eager for 1000, but his bouquet is still inside my window. So I then ask the other three if any of them are willing to take 1000 for their identical bouquets. Before they have any chance, the first seller is now willing to take 1000.

Living in Kigali is not cheap, so I enjoy the luxury of fresh flowers at market rate.

Kimironko Market in Remera

Kimironko is the market's market in Remera near the Kigali airport. We made a brief trip to grab extra ingredients for a Christmas party tonight; we're taking Macadamia Meltaways.

$0.86 = 6 eggs
$0.81 = 1 kg tomatoes
$2.50 = 2 kg flour
$1.25 = 1 kg sugar
$17.89 = 26 Christmas ornaments

2nd Anniversary

Day 731



Our second anniversary. I surprised Danielle with flowers I bought downtown (at $0.09 a stem) and a long anniversary note on a Joyeux Anniversaire card. Tonight, we go for pizza and beer at Sole Luna, supposedly the best pizza in town and about 50 varieties.

Things we buy

Danielle and I decided to go ahead and pick up some Rwandan things as we see them and enjoy them here and now. Here's some local products:

Vase, 5000 RWF, $8.94 USD

Bowl, 4000 RWF, $7.33 USD

Baskets, 2000 RWF, $3.67 USD (each)

Feel free to place your order with us online. I'll be honest, though, shipping and handling is where we get you.

Bourbon Café

Downtown at the UTC complex, where the Nakumatt is, sits a beautiful café that resembles a Starbucks in its style and atmosphere, but does both better with a wider menu. Here are some prices, and don't forget, 1 hour of Internet with any purchase.

$6.36 = bacon cheeseburger
$6.36 = milkshake
$5.45 = croque monsieur
$4.91 = omelet
$4.18 = beef tenderloin brochette
$4.18 = crepe
$2.73 = slice of apple pie
$2.18 = coffee
$1.82 = french fries
$0.91 = 6 cookies
$0.91 = coke (glass bottle)
$0.73 = chapatti (best of pita and tortilla ~ torpita)
$0.55 = samosas (beef or cheese)

1 hr free internet w/ purchase

Local markets

We had previously decided that Nakumatt, the Kenyan grocery, is too expensive for our daily groceries, so Danielle and I took a guided tour of the local markets and their respective specialties. I think, however, that we are still unsure what we will eat, and from where, and for how much …

BCK (pronounced "behseka")

Another grocery store, closer to a Piglet than a Piggly Wiggly. Similar to Nakumatt on most prices, but this store would contribute more to the local economy. BCK and Nakumatt are close together and close to where we live. It is also right down the street from the Chinese store …

T2000, "the Chinese store"

Cheap chocolate, only Christmas trees in town, maybe a radio; they have everything non-grocery for great prices. You should expect to lay down about $30 for the smallest pre-lit fake Christmas tree, which is quite more substantial than our Charlie Brown Christmas tree at home. Bonus: a friendly Filipino friend gives us free paper bags for our purchases (it usually costs extra).

Frulep

Great place for vegetables and lots of fruit. I think a lot of foreigners come from the fruit. Here are the Frulep prices:

$6.42 = 1 kg tilapia
$5.50 = 1 cheese wheel
$4.59 = 500 g coffee
$2.94 = 400 g peanut butter
$1.83 = 500 g jam
$1.56 = 50 bags of tea
$1.47 = 1 kg rice
$1.15 = 500 g pasta
$0.73 = 1 kg oranges
$0.73 = 1 kg bananas
$0.64 = 1 kg pineapple
$0.18 = 1 kg avacados

La Gallette

French name, German subtitle: "the German butchery." Good meat and bread. Smaller store, full range of groceries, also quite a package shop, to boot. Close to town, closer to the prison, so we can take the back way home and pass through the Muslim Quarter.

Ndolis

Good place for butter, meat, and fish. It's on the way to the provincial office, on the way to Kimironko Market.

Kimironko Market

Wow. This is what an open-air market should look like: endless piles of bananas and potato with bountiful islands of every green been, onion, fruit and vegetable you could want on your plate. In addition, you can shop for any manner of clothing, cookware, or other normal need.

We drive about 15 minutes to Remera – another Kigali neighborhood, ours is Biryogo – and we pass the Anglican provincial office where the savings program is based, and we pass the best chapatti in Kigali, and there's a sports complex/soccer stadium back there by the office, too, and then you arrive. When we arrive, we are surrounded by 15 young men in yellow vests offering to help us park, watch our car, and/or carry our bags. The market used to be so loud, with vendors talking/yelling over one another, that vendors are now encouraged to pacify themselves with small radios. I can only imagine how loud it was before, but I have to say this strategy is effective – and it's still loud. The market is overwhelming and wonderful.

The prices are better than Nakumatt, as you can see with a couple of comparisons below, but most vendors are definitely skewing prices towards Nakumatt level when they see us coming.

850/kg Tanzanian rice (1744/kg at Nakumatt)

750/kg sugar (790/kg at Nakumatt)

Details: Nakumatt grocery prices

Kenyan grocery chain Nakumatt has everything from furniture to pharmacy, cookies to milk. We decided to shop around and see what the prices were and plan a budget. These prices are certainly higher than what we can find at a local market, but this will help later when we are shopping for bargains. Rwandan francs (RWF) and U.S. dollars (USD) exchange around 550 to 1, so a 2 L coke would be 1700 RWF and spinach is only 60. Some of our favorites so far are the bread, pineapple, small bananas, macadamia nuts, and chips (french fries ... best in Africa).

Below is a summary of what groceries cost. By the way, if you asked Danielle after pricing the rice, we can’t afford to live here. I think we’ll find a way to make it work.

Nakumatt grocery store
$19.20 = 6 fruit/nut breakfast bars
$15.85 = 5 kg rice
$9.84 = 500 g ground beef
$9.67 = 1 box of cereal
$9.27 = 200 g bacon
$8.98 = 4 sticks of butter
$8.84 = 900 mL mayonnaise
$7.35 = 2 L corn oil
$6.73 = lg. bag of mixed nuts
$6.44 = 500 g beef sausage
$5.45 = 500 g coffee
$4.82 = 800 g peanut butter
$3.67 = 1 mango
$3.13 = 10 scouring pads
$3.09 = 2 L coke
$2.91 = 12 eggs
$2.87 = 2 kg sugar
$2.73 = sleeve of chocolate chip cookies
$2.62 = 1 kg oranges (green local variety)
$2.55 = 750 mL dish soap
$2.45 = 1 L passion fruit juice (any juice really)
$2.36 = 4 rolls of paper towels
$1.64 = 1 kg cucumbers
$1.45 = 25 tea bags
$1.27 = loaf of bread
$1.18 = 1 kg tomatoes
$1.05 = 1 papaya
$0.96 = 1 L water
$0.91 = 1 pineapple
$0.89 = 2 rolls of toilet paper
$0.84 = 1 kg onions
$0.78 = 1 kg carrots
$0.75 = 1 kg bananas
$0.65 = 1 kg green beans
$0.40 = 1 head of cabbage
$0.35 = 1 kg potatoes
$0.20 = 1 avocado
$0.11 = 1 bundle of spinach

Details: moving to Rwanda

UPDATED: November 13, from Rwanda

72 hr, 27 min = Total time from Fisher House [Lancaster] to Mercy House [Kigali]
34 hr, 5 min = Total time from Philadelphia to Kigali
17 hr, 15 min = Total time flying

We left with 8 bags. I know how Jon & Kate Plus 8 feel when they go to Disney World, you’re always counting. 4 checked bags, 4 carry-ons, 3 laptops, too many books. Everything was the right size and the right weight except the one. One bag was barely overweight (and oversized, but they fixed that by ripping of the handle somewhere in a back room). I suggested to both United and Kenya Airways that we were serving a nonprofit organization helping the poor in Rwanda – each generously offered our overweight and oversized baggage transportato gratis (no extra charge).

From Lancaster, PA to Kigali, Rwanda: here are the details. So far, these are just flights and times, but I'll go back and insert the actual details of traveling for three days as we move to Africa. I'm including real time departures and arrivals, travel time, and costs for two.

Day 1: Trains
Sunday, 9 November 2008

Amtrak: Keystone 664
10:03 am Lancaster
11:10 am Philadelphia (30th St)
1 hr, 7 min
$36

Septa R1 regional rail
11:34 am 30th Street Station
11:50 am Philadelphia Int'l Airport - Terminal B
0 hr, 16 min
$0 ($12 regularly, but we road at the grace of one sympathetic – yet brusque – ticket puncher)

Philadelphia Airport Marriott - connected to Terminal B by sky bridge.
$76.12 ($60 bid on Priceline, 3 stars, regularly $199)

Sunday night update: We caught the Eagles-Giants game at the Linc (a surprise for Danielle). We enjoyed a pre-game concert with ribs and a turkey leg. We also had the great pleasure of meeting three genuine Philadelphia fans (one with a classic Eagles knit cap) Jeff, Ed, and Dr. Rob. (I say Dr. Rob to distinguish him from myself; I usually go by Dr. Bob.) We had the subtle displeasure to experience the spitting of an Eagles fan upon a Giants fan. It is not as fun as it sounds when you’re in between the two. I almost saw two Eagles fans fight each other; it’s known to be a rough crowd. Our experience with Jeff, Ed, and Dr. Rob, however, was redeeming enough to believe in Philadelphia still.

Another Sunday night update: For Tech fans … I met Bill Weaver at the Marriott. You may know him as some very successful CEO, but I have the personal privilege to know him as one of the 1990 Yellow Jacket college football national champions. I thanked him for his service.

Day 2: Planes, part I
Monday, 10 November 2008

United 7218
6:50 pm Philadelphia (PHL)
7:59 pm Washington (IAD)
1 hr, 9 min

United 924
10:04 pm Washington (IAD)
--overnight--
10:15 am London (LHR)
7 hr, 11 min

Day 3: Planes, part II
Tuesday, 11 November 2008

Kenya Airways 101
7:00 pm London (LHR)
--overnight--
6:30 am Nairobi (NBO)
7 hr, 30 min

Day 4: Planes, part III
Wednesday, 12 November 2008

Kenya Airways 472
12:30 pm Nairobi (NBO)
12:55 pm Kigali (KGL) 1 hr, 25 min

Total approximate airfare cost, roundtrip (returning June 2009)
$1,865

As we finish our travel, I'll update all of the travel times and maybe some more costs of travel. Also, you cannot move to Rwanda without vaccinations and drugs: typhoid, yellow fever, polio, meningitis, (hepatitis we’ve had already), and we’re taking malaria prophylaxis – $1,125
not to mention a serious checklists of what to remember before you leave the country. I should have friends help out with this one . . . Bentleys? McDades? Strykers?