Nairobi - On the southern slopes of Mt Kilimanjaro, a small bank owned by 330 000 members of the Evangelical Lutheran Church in Tanzania's Northern District is improving the lives of poor Christians, while still managing to make a profit.
"When we started, the projections were that we would make profits after three or five years," said Fahanaeli Andrew Kihunrwa, general manager of the Uchumi Commercial Bank Ltd in the town of Moshi. "But in one year and three months we started making profits. So people have been wondering how we did it."
Kihunrwa explains, "The simplest answer they find is that this is church-based. God is with them."
Members of the Lutheran church agreed to form the UCB in 2003 as a financial institution that would offer people financial services at low rates of interest, while directing savings to ethical investments. The people, due to their poverty, could not access loans from or open savings' accounts with mainstream commercial banks.
"On Sundays, the basket would go around with messages such as, 'Yes! Form your bank', 'Contribute to you bank'," Kihunrwa says. Because of the positive response from congregations, the church-based bank opened its doors to the public in 2005.
The Christians in this area of Tanzania are mainly Lutherans, who are peasant farmers. They grow coffee, bananas and cereals, while also keeping livestock. Due to unpredictable weather patterns and declining global coffee prices, however, the farmers found themselves becoming ever poorer. More than 50 per cent of them live on less than one US dollar a day, and some believe the main cause of their poverty is a lack of knowledge and an inability to access capital.
