SUMMARY: We found the project in reasonable shape. The office in Mdantsane is in daily use and contains most of the equipment we have purchased (computer, printer, fax machine), although the computer must be upgraded. We were most impressed with the organization, resolution and dedication of Mrs. Thembeka Gwija (who has been with the project since November, 1999) and Ms. Nontambiso Mabhuda who joined the project in February, 2003. Ms. Sibongile Ndubaza, our General Manager, continues to do good work.

Fundraising is an urgent issue, as we have less than 4 months funding on hand ($20,000). We need to raise approximately $5,000 Canadian per month, or $60,000 annually to maintain our current level of about 350 loans annually.

Banking arrangements: At the moment, cash distributions of the loans are taking place in our offices in Mdantsane. This is extremely dangerous as there are almost daily armed robberies involving far smaller amounts of money. We must work with the banking system to come to some arrangement that helps us distribute our loans through the banks, into individual accounts. A second concern revolves around cash collection by the field agents. This is considered bad practice in the Grameen banking system, as the field agent may steal the money. Our agents are giving receipts on the spot and it seems to be working well, but I worry for their safety after these collections, and wish that there were some way we could have our clients use their own electronic bank accounts.

We have decided to move to an individual lending system. We have concluded that the group lending system is actually holding down our repayment rate, due to the fact that these individuals are in communities that are highly mobile and not cohesive. The group system was developed in rural areas where neighbours were in longstanding communities with generations of ties. Our borrowers live in highly fluid urban settings. It is our employees’ view that the good payers in a group are being dragged down by those who simply say to themselves, I don’t have to pay as she will pay for me. We have, effectively, been operating on an individual basis for steps 2 through 5 for the past year. It seems to be working well. New borrowers will still be assigned to groups for meetings and mutual support. They will no longer, however, be responsible for the repayment of each other’s loans.

Reporting System must contain our 5-year history. This would appear to be our passport to local funding. We understand from Khula that we are one of the only organizations that has such a history, and has employed the same person for all of that time.

I arrived in East London at noon on Sunday, May 9, 2004, and rented a car to drive to the Dolphin Hotel in nearby Nahoon. I highly recommend the Dolphin as a cheap and friendly (though not particularly clean!) hotel with decent meals. A rental car with a confident and well-oriented driver is a must, as safe public transportation and maps of the township areas are non-existent. I picked up Bongi at the Steve Biko statue at City Hall at 3:30 p.m. as arranged, and we drove to the beach at Nahoon (within walking distance of the Dolphin Hotel) and had a good walk and talk. We discussed Bongi’s past five years and her concerns about the next five. She feels that she has learned a tremendous amount from her employment with the project and is very anxious to continue learning and growing. She finds the lack of certainty about the future of the project very draining. She also lacks any kind of oversight and often doesn’t know what she should be doing. She has spent 3 days each week training new clients since January, which is not in her job description, and prevents the performance of other necessary reporting tasks. However, it does keep her in touch with the clients and with the communities in which they are living.

On Monday morning, May 10th, Bongi and I picked up Mr. Mandla Ndyumbu at the ECPCC offices (where he runs the ADP training program for computer skills) and drove to the Department of Labour for the Province of the Eastern Cape in East London. We met with Mike Mills, who is a gatekeeper for funds available for training unemployed workers. It became evident during the meeting that Mr. Mills did not understand the nature of the micro-lending program that the Eastern Cape Micro Financing Enterprise (ECMFE) is carrying out. He thought that since our clients have businesses, they are not unemployed. He was not aware of how our lending project works or who the target clientele are. He needed to know that this is a demand-led plan, not some plan by the ADP to create business for itself.

We are asking for 3 days training per client at the rate of 50 clients per month on a 6-month trial basis. ADP would provide the training. Bongi agreed to send him a proposal. He wanted to see an application form in blank and one completed to understand how the program operates. He wanted some success stories. He was astonished to know that we have a 5-year history. We were told the funding could start as early as the end of May if the proper application procedure is followed. Subsequently we learned that this funding has been discontinued, and that ADP is shutting down for lack of funds.

Bongi and I had lunch with Mr. Theli Gabelana, a lawyer who recently joined the board of the Eastern Cape Micro Finance Enterprise (ECMFE) as an appointee of the Eastern Cape Provincial Council of Church. Theli ( was called to the bar in 1994 and has since been in General Practice in East London. He has worked with Bongi for the past few months at identifying and sending demand letters to delinquent clients.

He has agreed to send demand letters for R25 per letter delivered. He will then take the first R27 that is paid from any account. Bongi agreed to deliver the backlog of 150 overdue loans to him by May 28th. Theli agreed to deliver the letters by June 28th. We should check that these deadlines are met. In the future, the names and addresses of borrowers with overdue loans will be delivered to Theli 30 days after the loans are due. He will then deliver the demand letters before a further 30 days have passed. A policy on issuing summons in the courts was discussed. The first round of letters sent out earlier this year yielded more than 50% repayment – this for loans some of which were overdue since 2000. We collected over R5000 from the first batch of 22 letters, which makes this a paying proposition for the project in more ways than one. It sends the right message, and it makes money.

On Monday afternoon, Bongi, Zano (who did the filming in 1999 for our first web movie), and I drove to the Duncan Village borrowers’ meeting and spent about an hour filming and hearing stories of clients. There were more than 40 clients at the meeting in a shack with a dirt floor that is used as a church. Many weekly collections were made in cash, in exchange for a receipt written out by our field workers, Thembeka and Nontambiso.

After the meeting, Bongi and I went to the bank to pick up the cash required to make the loan disbursements on Tuesday morning. Carrying large amounts of cash into Mdantsane is a dangerous business, and it needs to be one of our top priorities to find an alternative. While we were in Mdantsane, a couple of men were murdered just outside the mall for far less than we were carrying.

On Tuesday, May 11, in Mdantsane, we gave out 10 new loans at R600, 5 at R850, 9 at R1100 and 1 at R2000 for a total of R22,150. The R2000 loan was made to Mrs. Nolutando Ntsepe, who is our first client to reach Level 5.

We are not currently meeting our budgeted numbers of new loans. Unless intake loans are made at R600, there is no ability to go to the next level of R850. Therefore, to achieve our budgeted levels of repeat loans, we will have to make more first time loans to get caught up. The bottleneck is in training. Bongi is backlogged, with many applications completed and clients awaiting training.

Thembeka and Nontambiso now know what the budget levels are. I believe we need to send our memos to the office with very pointed questions about how many loans are being made. Anita Innis has indicated a willingness to step into weekly communication with all three employees about the way they are spending their time, trying to solve the issues that are preventing them from achieving the budgeted goals. There seems to be a less than clear understanding that a shortfall of loans leads to a shortfall in the budget.

After the distribution, Zano, Bongi and I drove from Mdantsane to the airport to pick up Anita Innis. We bought a picnic lunch (and supper as it turned out) at the Quigney Spar and took it to Nahoon Beach to eat on a rock.

After lunch, Bongi, Anita Innis and I went to the ECPCC offices to interview Mr. Ray Magida for the position on the board of the ECMFE vacated by JJ Oosthuysen. Ray was suggested by our employee, Thembeka Gwija. Ray has about 20 years experience in facilitating self-help projects in and around Peddie, Eastern Cape. He has focused on forming co-operatives to grow vegetables and chickens. Ray was employed by the Border Council of Churches from 1974 to 1985 as a field worker. He started an ecumenical NGO known as Masibambane Christian Development Centre in 1985, which he continues to run today. He has a degree in Social Sciences and a senior degree in Adult Education and Community Development from a British University through a scholarship, gained over the past 10 years. He is on the executive and Board of Trustees of the Department of Social Responsibility for the Anglican Diocese of Grahamstown.

Ray is a busy man in his late 50’s perhaps, with a dynamic personality and a passionate commitment to self-help through co-operative agriculture. He is an impressive candidate and would be an acceptable nominee to Lulama. His free time is limited and we would have to be very clear what we want from him.

We also met with Mr. Tony Schnell, at Bongi’s suggestion. I met Tony on my first trip to East London in May, 1999. He worked for about 5 years as a program officer with the ECPCC, doing the Healing of Memories program amongst others. He’s a wonderful, capable and giving sort of individual, who already acts as an unofficial mentor to Bongi. He would prefer not to be on the board, but would agree to make his mentorship a little more formal. He made it clear that he is available to help in any way he can, subject to time constraints. He has known Bongi as long as I have and is very much aware of her strengths and weaknesses. He sees training and oversight as imperative.

We concluded the day with a board meeting of the ECMFE attended by Anita Innis, Mr. Ntembekwana, Chair of the Mdantsane Chamber of Commerce, Rev. Lulama Ntshingwa, Mr. Theli Gabelana, Bongi and myself. The main issues for discussion were the collections of overdue loans.

On Wednesday, May 12th, we dealt with some computer technology issues, printing of deposit books and delivered the cash gifts from Charlottetown (Hillsborough Rotary and a private donor) to Maggie Ntsutsu’s 12 “grannies”. They meet in her garage to sew pillows and aprons and other bits and pieces. Those old ladies honestly looked as though they have never been happier. With the new money, they planned to buy plastic chairs, as well as a lot of sewing materials. They’ve been sitting on any old thing. Their worktable was covered in boxes of scissors, threads, and other sewing knickknacks that Sibyl Cutcliffe has sent over from Charlottetown. Maggie even saves the boxes they arrive in and displays them. They have a kettle with which to make tea and coffee, a great luxury. They are safe with Maggie from marauding thugs who prey on old ladies for their tiny pensions. They come to her garage for about 5 hours each day – from 9 ½ a.m. until 2 ½ p.m. I spoke to Maggie about our need to have success stories of our borrowers and she promised to try to put some together. It is difficult to convey what we want to our own office ladies. We’ll wait and see what Maggie produces.

From Maggie’s we set off to Khayelitsha, a new shack settlement just outside Mdantsane. We met in a shack between the school and the day care. The school is a series of shacks made of election posters and cast-off tin painted white. It is not accredited or funded and its teachers are unpaid. There is no running water or electricity. It can be seen from the road near Mdantsane, where we pulled the car off into a rutted track and left it.

The meeting shack was perhaps 15’ by 20’ and papered in Wrigley’s chewing gum wrappers. It had no windows and one door, but by the glints of sunshine showing through the roof, it was by no means rainproof. There were probably 30 people at the meeting, including a few men. One of the women had brought her curtains to show us. We met the five community leaders who had stood behind the starting of the project, including Samuel who had a sophisticated spaza, which we visited later. Anita and I bought 4 aprons from one of our clients.

As we left the meeting to walk through the settlement, we stopped to visit the daycare in a freight container next door. It held 32 children and was spotless. There were no windows, furniture, electricity or water. Light came through the two doors that swung open at one end. The walls were covered with cheerful pictures and letters and all the normal things one expects in a pre-school environment, including laughing children. It is not accredited, and its teacher is unpaid except for the R20 ($4.00) per month that each child pays. I don’t know how or where they get their lunch. It was an amazing tour de force of a place. Against all odds. We were made to feel very welcome.

From there we walked through the community to visit a lady who sold cabbages and other veggies. She had a 2-year-old boy, who looked quite fly-infested, rolling around on his plastic tricycle. From there we walked to the turquoise shack of a woman who sold used clothes (she’s on Cycle 2), who lives with her aunt and her brother in a three room shack, each room maybe 10’ by 10’. The yard was beautifully kept. She had bought a wardrobe (meaning a large storage cupboard) from the proceeds of her Cycle 1 loan. She was very optimistic about the program and her chances of succeeding in it. She seemed calm and happy.

And then on to visit a woman who had chickens, a vegetable garden and a sewing business. Anita took a picture of her hunched on her tiny stool with the sewing machine perched on her bed, the only furniture in her dirt-floored, windowless shack. She was making traditional clothing, beautifully, with a hand-operated treadle sewing machine.

The chickens were already one month old, which Ray Magida (the chap who Thembeka feels should be on our board to replace JJ) says is the maximum age they should reach before being slaughtered. He says after that they start to eat their profits. Our client was planning to keep them for 3 months. It would appear there is a lot of room for skills improvement amongst our clientele, and it could make our whole program a lot stronger.

We went from here to Samuel’s sophisticated spaza shop, with a full range of goods from fast foods and cold drinks to sugar, oil and flour. He bought a TV with the proceeds of his first loan. He had a canopied area attached to his shop with a picnic table, where people could hang out. He is, apparently, unmarried and considered a catch by the local ladies.

From there we visited another tiny spaza shop with almost nothing in it and almost no furniture in the house. All spazas are not created equal! A spaza is generally any small shop in the home. We discovered that these small communities have almost countless numbers of them, each carrying different goods, so that one can find just about everything one needs for day to day living right in the community.

That was about the extent of our tour of Khayelitsha. There are a few water standpipes, but no electricity. We saw many people carrying water on their heads. They have latrines, which must be well maintained, as there was no odour of sewage anywhere. The settlement was well kept and tidy, with no garbage or open sewage. Under a sunny sky in open, hilly country, it sure beats a city slum.

From Khayelitsha we drove to Gonubie, perhaps 20 kilometres away on the Indian Ocean. Gonubie is a former white seaside suburb north of East London. We went into town and bought our picnic at the local Spar before joining a meeting of ladies who’d been waiting for us for more than ½ hour. Although we call it Gonubie, there must be a local African name for this new shack settlement in the dunes on the ocean.

More than 30 ladies, many with babies on their backs, were waiting for us outside the local community center. Unlike Khayelitsha and Duncan Village, where we met in a shack courtesy of some local community leader, this center was of concrete and had several rooms. We were crammed into one 12’ by 12’. It was hot and noisy! At both Khayelitsha and Gonubie, cash payments were being made to Ms. Nontambiso Mabhuda, who handed out receipts. So far, no cash has gone missing, but that arrangement is specifically warned against in micro-banking – i.e. the field worker collecting the cash. They sang a bit, a few told their stories and most paid some cash. These new informal settlements are too far from any banking facility to make their payments and the banks are increasing the costs of opening an account to keep them out. The post office accounts are less costly, but their electronic capability is very limited.

After the meeting we trekked over the sand dunes in which the community has taken root. Here there is neither water nor electricity. The shacks are perched on sandy hillocks in the dunes. We visited a Cycle 2 client who had built her spaza shop entirely from election signs and 1” branches. One good storm and it will probably topple, but it certainly looked elegant and impressive the day we saw it. She has 4 children and lives across the path from her shop. The second client we visited also had a spaza. All of the Gonubie shacks seemed to be alive with spazas, each selling different items, so that, as a whole, you could buy all you needed within walking distance. The prices are high, since town shops are the origin of most of the goods being re-sold. There was very little evidence of anything being grown or manufactured, with the exception of one client selling cooked sheep’s feet or pig’s trotters or some similar extremity. Two defaulting clients (up-market by the look of their homes) ran away at our approach. A brother and sister team were doing well selling liquor out of their room close to the main road – at least until the police shut them down. (We must not knowingly make these loans as they will bring our program into disrepute.) Another of our clients in Duncan Village (and maybe others elsewhere) was using his loan to make further loans at a higher rate of interest. This should also be discouraged. It seems mainly the men who concoct these schemes.

On Thursday, May 13th, Bongi, Anita and I met with Ms. Belinda Vabaza, Manager, Business Development Services Unit at the Eastern Cape Development Corporation in a brand new high-rise marble-clad building with fountains and an atrium, built across from the Mimosa Hotel just uphill from the Esplanade. Symbol of the new South Africa.

Initially, Belinda said she was not the right person to meet and seemed quite puzzled at our presence. It later emerged that she would, indeed, undertake to help Bongi find joint venture partners in training and other areas. We did feel that the meeting had the potential to be worthwhile. She indicated that she does not have money to hand out, but referred us to Ms. Mandisa Manjezi who heads the SMME Desk at the Department of Economic Affairs for the Eastern Cape. That department has cash for youth programs for the 18 – 35 year age group. Bongi agreed to follow up.

We then dropped over to First National bank to meet with Jacques Victor, Electronic Banking, Technical Specialist with FNB Corporate, a division of FirstRand Bank Limited. At the same time, he arranged a meeting for us with Mary Cowen, Manager: International Banking Centre (East London) of the First National Bank.

We discussed both the collection and distribution of funds.

In terms of collection, it costs R1300 to start and R320 month to maintain. Each transfer costs R3.40. It is quite expensive for small clients such as ours. If the funds are not in the account from which they are to be collected, the client pays the penalty.

Jacques suggested that we speak to Zukiswa Ntsikeni (Zuki) who manages the ECDC account for FNB. FNB is obliged by law, as are all banks, to do a certain amount for disadvantaged people and we could pitch Zuki, with the support of Belinda Vabaza, on a pilot program which would waive these collection fees. There is a certain argument to be made that we are building clients for the bank and that these fees should be waived for as long as our clients are active with the ECPCC. After 3 years of steady repayments with us, they are proven creditworthy and will be clients of FNB for life, one would presume. At that point they would begin to pay the same fees as all other clients. The waiver of fees is rather comparable to an advertising fee, but better targeted. At the moment, micro-banking is being hit by the big banks with more and more fees designed to keep the formal banking system out of reach of our clients.

In terms of distribution, Jacques offered the Internet-based BANK IT system. This would permit distribution of funds for a reasonable cost. The difficulty is that every client must have a bank account, and bank accounts are very expensive in South Africa, and becoming more so. This system, however, would stop the hazardous practice of having wads of cash to distribute on loan day.

If we use these electronic banking programs, we would be able to access the information in Canada, even though we would not be authorized signing officers on the account. This would make oversight much easier from Canada.

We met with JJ Oosthuysen for dinner. John Bowyer and I met JJ in April, 2002, and he was on the board of the ECMFE until recently. He has been an invaluable contact for us in the micro-lending field in South Africa. JJ has spent the past 2 years, since he assumed leadership of Nicro Enterprise Finance, building the business structures and resources. NEF had gone badly wrong before he was brought in to restructure and restart it. He has done that and received enormous funding: R2 million from the Mpumulangu government, R 2.5 million from a European trust, R 5.5 million from the government for loans to youth, for a total of R 10 million.

He requires his staff to make 10 new loans each per month, to a limit of 150 clients per staff person. The loans start at R750 and go up to R15,000. The average first loan is R1,500. Interest is 5.7% per month or 68.4% per annum. Repayment is monthly. All loans are individual.

He pays his field officers R3,500 per month. They also get an incentive of R300 when a loan is disbursed. I would suggest that such an incentive be paid when the loan is repaid. This is more in tune with a bonus for better performance: disbursement is the core description of the job; full repayment, however, is an achievement requiring correct initial assessment and interim encouragement and follow-up.

Managers are paid R10,000 per month. JJ promised us a copy of all the reports in his system. We subsequently reviewed those with him on Friday, and he graciously gave us a CD of them, which John Bowyer has.

NEF now has about 900 loans out. This is over their entire 6-office operation with a great number of staff. We will have achieved about 30% of this by the end of 2004 with 3 individuals. By JJ’s description, he has a constant job to oversee managers and staff turnover, which is very high. Managers are often not on the job and loans are not being made. The repayment rate is low and a constant challenge. He said that indebtedness in South Africa is rising to epidemic proportions and that personal indebtedness is not being managed particularly well. In February alone, there were 150,000 summonses issued for debt.

JJ spoke about the myth that it is impossible to fire an employee in South Africa. He says he’s had to do far too much of it, and that it is far from impossible. One must just document everything and ensure that there is a policy covering the subject behaviour. As long as the inadequate behaviour is measured against a standard that has been communicated and is being enforced, then employees are not untouchable.

We began Friday with a breakfast meeting with Rev. Lulama Ntshingwa. We generally agreed that it is very important for us to hire a CEO at this time, as the project must have daily oversight by a competent executive to go forward. Lulama has some good thoughts to share with us about the kind of individual this might be and where to find him/her. He has been able to steer all three of our current employees our way. We will likely be looking at about R10,000 per month in pay. That was the main substance of our discussion.

His current interests are in the AIDS program and in land issues (read re-distribution). He has bought a 25-hectare farm near the Gonubie shacks and is trying to turn it into some kind of conference and farming center, I believe. He approves either of our suggestions for the board to replace JJ.

After breakfast, we drove into East London to meet with JJ, who had promised to spend most of Friday with us and with our employees. This didn’t happen in the end, as he was up to the proverbial in alligators. When we arrived he had about half an inch of paper in front of him, the morning reports from his managers he said. He collects a phenomenal amount of data each and every week from his managers, which is intended to feed into the statistical data required by his various sponsors.

Once JJ made it clear that his time was limited, we drove to Mdantsane to hold our own staff meeting. Thembeka was very organized, with a list of issues she wanted to review. Overall, she impressed both Anita and me as someone very capable of administering an office. She is willing to learn computer skills (and is personally buying one of the used laptops), and we should help her upgrade her skills so that she can take on a few of these administrative tasks.

Communications – Please post all staff communications. It became evident, from the fact that neither Thembeka nor Nontambiso had ever seen the budget, that information concerning our objectives stops with Bongi. This is neither fair nor smart, as every motivated employee must understand what it is they are trying to do and why. Suggested solution: far more communication with staff. Anita says she will take on a weekly communication with all staff to ensure they are staying up to date with their tasks and we are informed of their issues.

Salaries – R3080 per month. They are receiving them and want to be sure that they are up to the minute with respect to the industry standard. That is great, just so long as they are up to the minute as well in respect of meeting the budgeted number of loans and ensuring a high rate of repayment. I would suggest implementing an incentive of something like R300 for each and every loan repaid in full and on time. This would pay for itself, as we have built in a discount rate, which would provide the funds by not being used. There is no reason to improve the incentive with each cycle, as theoretically, each time a client successfully completes a cycle, the likelihood of successfully completing another one increases dramatically.

Travel Allowances – At the moment, the employees must submit a detailed list of every “taxi” or “combi” ride taken during the previous month and get a reimbursement. This is a hardship when money is so short and travel is so expensive. Also, Lulama is often not around to sign the cheques, so delays are frequent. After discussion, we agreed that it is not a good use of time and effort for them to be filling out such detailed reports and frustrating to have to wait for cheques. They will continue to keep a log of taxi rides for reference as to travel allowance levels (which should be considered carefully in setting the budget each year, and which should not become another source of income by tempting field officers to skimp on trips to their clients). However, Mandisa has been instructed to pay them the travel allowances assessed in the budget at the same time as their monthly pay. We did not discuss the split between the 3 of them: perhaps Anita can address this.

Annual Leave – We need to check with JJ as to his annual leave policy. We, apparently, have none officially in place. Bongi promised to supply us with a list of annual holidays so that we can know with some certainty when the office will be closed: perhaps Anita can address this as well.

Clients in Remote Areas – In order to carry out our mandate, we are venturing into the new shack areas, which are increasingly remote from the well-traveled taxi routes. They are difficult and time-consuming to reach, and it is dangerous to carry large amounts of money in and out of them. Thembeka and Nontambiso normally travel together, but it can take virtually the whole day to visit, for instance, Gonubie, just one of our sites. Thembeka suggests hiring a car at least once a month to visit these places. Thembeka herself drives and I believe owns a car. Perhaps we could come to some arrangement with her to use her car once a week to do the visits to some of these places. It might well make a lot of sense and would dramatically increase the efficiency of their work.

Training Workshops - Thembeka says the staff need regular training workshops. We didn’t get into all of the subjects to be covered, but they would presumably cover things such as writing of funding applications, writing of business letters, how to prepare for meetings at the bank or with the ECDC etc. Just very basic stuff, which our staff are currently at a loss about. Nontambiso asked about taking courses during the working day. Some courses are simply not available in the evening. We concluded that with such a small office, this might be very difficult to accommodate. In any event, it would require a great deal of cooperation amongst staff – and teamwork, which they need to focus on.

Staff Loans – We imparted the decision that there would be no staff loans made except in a personal, family emergency. I believe that we have a formal policy in place. We need to check this and other staff policies against what JJ has passed and try to bring ours in line to the extent reasonable. We need comprehensive policies on all these issues so that staff know where they stand.

Hibbard Reporting System – The system built by Yolanta and Robert is very much appreciated. There are a few improvements which would make it dramatically better, which I will try to detail in the recommendations for going forward. They relate principally to increasing the flexibility of the reports one can extract from the database, and ensuring that the database is in proper form to record individual loans since inception. All of the information, which we have about a client, should be entered in it, so that we never have to duplicate such entries. A tremendous amount of time is wasted on drawing up neat little charts and memos here and there on different subjects.

Photocopying – Bongi would like to buy or rent a photocopier. I asked Bongi for a cost benefit analysis between sub-ing it out (at R0.50 rand per page for R3.50 per application), or leasing a machine in-house.

New Computers – Nontambiso and Thembeka will each purchase a laptop for R400, Thembeka’s to be paid for the end of May and Nontambiso’s the end of June. The proceeds are to be applied to the purchase of a new computer from Computronics, which will also give us R750 on a third laptop. The fourth will be retained in the office.

Other Issues - We should look into high speed internet as our telephone bills are very steep indeed, about $300 per month – i.e. R1500. I understand from Kaya, Lulama’s secretary, that ISDN costs about R500 to install, R200 per month for a line, R80 for the internet connection, plus the cost of calls. JJ recommended we look into Premi Cell, which is a router that reduces telephone costs. This sort of investigation must be a key responsibility for a CEO. We are not getting any advice as to how to maintain our machines at optimum function, what’s new and efficient, how to reduce costs etc. We are suffering for that.

On Monday, May 17th, we flew to Johannesburg, arriving by noon. Renting a car, we arrived at Kuhla for our 2:00 p.m. meeting. Kuhla is a governmental organization in charge of micro-lending. It has gone through several reincarnations and has had severe difficulties getting it right. Many millions of rand have been lost or written off. John Bowyer and I met with Kuhla officials in 2002 and spent months trying to pursue an application for funding, which finally died. We didn’t have huge expectations.

Our meetings were arranged by Ms. Silindile Ngcobo, at JJ’s suggestion. We were joined by Ms. Ruth Masokoane, who will be our account executive. Mapefo also sat in but did not offer any further particulars. It was very slow going at first, but they finally, and Anita will second that finally, did warm up to us. We left with the impression that we will get a good hearing, particularly if we come with our 5-year record. They simply can’t fathom that we have one. In fact, if we produce a verifiable record, I think we can ask for and receive just about anything we might reasonably want. The record is that important, and they are that desperate for a win in Mdantsane.

We met Tuesday morning with Mirrian Nkosi and Patrick Mabuela of OikoCredit, an ecumenical lending agency. OekoCredit is mandated to make low-cost loans to mass-based beneficiaries, whose businesses have existed for at least 18months, are viable, not environmentally degrading, and who are registered companies.

OikoCredit is an off-shoot of ECLOF, an ecumenical funding organization based in the Netherlands. PatricK said we qualify on all fronts and he would be happy to receive our application at an early date. They have made only two loans to date, both to local low-cost housing coops in nearby Centurion. One is called Blue Dot and the other Peulwane, meaning swallow.

He recommended that we apply for R10,000,000 to be drawn down as needed. The term is 5 to 7 years, and he indicated that a loan could essentially be kept turning over. Interest is payable monthly, quarterly or twice annually as negotiated; and payments are generally limited to interest-only for the first year. He would like 5-year projections using a 9% interest rate.

Patrick worked with Midveld Finance, operating in the former Kwa Ndebele. He coined the name Mpumulanga Economic Empowerment Corporation, and worked with it through many of its iterations. He was struck by the fact that we have a five year record, and says that he eagerly awaits the day we become his client.

On Tuesday afternoon, Her Excellency Sandelle D. Scrimshaw, High Commissioner for Canada, received us in her office at 1103 Arcadia Street in Hatfield, about 2 blocks from Hatfield Village. She included Bill Gunn, Counselor (Development), her CIDA man, who is about to return to Canada. Both were very gracious. Sandelle would be happy to receive any group that comes over to view the project at the residence (where our group was received by Lucie Edwards in December, 2000), a very nice perk to have on tap. She warned that the residence is due to be renovated which will take about 6 months, so that it will likely be next year before it’s ready again. We indicated that is probably about right in terms of a tour. She also indicated an interest in visiting it herself.

Bill Gunn advised that we join the Eastern Cape NGO Coalition which he thinks are very good. He was referred to it by Mary Coyle of the Coady International Institute (who prompted the invitation of Bongi to Canada). He says Mary is the most plugged in of all his contacts and is driving the spending of the $20 million on HIV/AIDS programs. It’s all going through the University of Fort Hare (in the Eastern Cape) and the Coady International Institute in Antigonish. Hugh Landry is Mary’s colleague there.

Bill did not encourage us to apply for CIDA funds. He indicated, essentially, that there is only a pittance available and that the strategy is to wear down the applicants so that it goes a long way. He said we would probably spend a year and give up.

That meeting concluded our 10 day visit to South Africa.