Why Sodomo village is buzzing with excitement

28 May 2013

Photo: Members of the Sodomo village savings group with their savings box

Many families living in rural Ethiopia find themselves trapped in poverty. With their assets limited to a small mud house, some pots and pans and a few chickens, it is impossible to borrow any money. And with no money to invest, changing things for the better is a distant dream.

To simply grow a different crop they need money to buy the seeds, but this money must be spent on food if they are to survive.

Mohammed was stuck in this very situation, leading a hand-to-mouth existence with no way out. His only real option was to borrow money from local lenders charging exorbitant rates of interest – something he was reluctant to do. He had saved a little money, 150 Birr (about £5), but this was not enough to really change things for his family.

Setting up savings

Farm Africa staff have been working with communities in Ethiopia’s Oromiya region, helping them overcome this ongoing challenge. When we helped to set up a savings group in Sodomo village, where Mohammed lives, he was elected as chairman of the group. Members have been learning about saving together and the benefits that this can bring, and have also received training and guidance, as well as a savings box and record keeping tools.

Mohammed and the rest of the group each save a small amount every week, and members take it in turns to take out short-term loans. Mohammed borrowed 500 Birr, which he put together with his savings, and bought two goats. He kept them for a month and gave them plenty of food to make them larger and more valuable before selling them for a higher price. In just one month he made 150 Birr profit and, in effect, had doubled his savings.

Beehives

The group has since decided to invest their money together and have bought some beehives. In the first season they sold enough honey to cover the cost of the hives, and can now look forward to a healthy profit next season. This will provide Mohammed and the other group members with a source of income, and a real way to change their families’ futures and free them from handouts.

More about our work in Ethiopia