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03 June 2023 / 14. Zil-Qad 1444

From Tuk-Tuk to Uber – Huge Step for WF / AFED Loans for Life

The first loans have been approved in the ground-breaking Loans for Life scheme in Africa.

This marks a huge step for Loans for Life, recently launched to provide interest-free small business loans that promise to transform the lives of recipients.

Loans for Life provides struggling Khoja families with the helping hand to move them up the social ladder, thus giving them a chance of a better life for themselves and their children.

Nine loans approved

After an open forum in Mombasa to identify suitable businesses, nine small loans totalling $95,000 were approved in two days. These include:

  • $8,000 for a car so that a tuk-tuk business can upgrade to Uber
  • $20,000 to increase inventory for a 20-year-old spare parts business after family illness forced the owner to spend his savings
  • $2,000 for a garage, along with handholding to help the two recipients make the most of their business.
  • $15,000 so that a community member can import stationery goods and make a better margin.

Loans for Life also approved loans of $10,000 each to two brothers and their three sons to rescue the family business. The $50,000 will allow them to increase inventory to be able to import directly for better margins and profitability. Without Loans for Life the business would cease trading and they would slide down to lower middle class.

Work on the scheme is now underway in Nairobi and Dar es Salaam.

Staged repayments

Loans are secured on property (such as the Uber car), guarantors and/or the borrower’s home, and repayments are usually staged over two to four years. All loans must be repaid in full.

Loans for Life is based on the successful model pioneered by Haydari Benevolent Trust (HBT) in Karachi, Pakistan, and is run in conjunction with Africa Federation.

HBT expert Muslim Raza has joined the team to share his vast experience of 15 years on the ground to enhance the localized process.

Help through difficult times

The first loans were approved following an open forum organised with Mombasa Jamaat.

Loans for Life trustee and World Federation Executive Councillor Sibtein Asaria said: “There is now awareness in the community at large that interest free-loans are available to our Khoja brethren to help them through these difficult times in both Kenya and Tanzania.”

Mr Asaria is WF Executive Councillor with Portfolio for Khoja Eradication of Poverty and Chairman of the  AFED Economic Development Board spearheading with his team members the WF/AFED Loans for Life initiative in Africa.

He added: “We thank the Mombasa Jamaat Leadership in their foresight, approach and support. The open forum brought forward members of the community who are in genuine need of assistance, and In Shaa Allah with the able guidance and commitment of the Mombasa welfare committee we have already documented viable cases.”

Loans must be repaid

And he stressed: “It is very important for the community members to know that we are there to help them grow their business but repayment is a must, to ensure the long-term sustainability of this Loans for Life initiative.”

Work will now continue on two fronts:

  • identifying more individuals needing assistance, through the help of the welfare and economic upliftment teams from Mombasa, Nairobi and Dar es Salaam Jamaats.
  • galvanizing the worldwide donor community with the need for continued funding.

Money within 15 days of approval

A second open forum has been held in Nairobi where ten cases were screened and evaluation is underway. The Loans for Life team are also working with the Jamaat leadership in Dar es Salaam.

More than 15 cases were screened at the first forum and nine cases pre-approved. Loans for Life emulates the same governance and methodology adopted by HBT where the criteria is based on two aspects:

  1. Willingness to pay
  2. Ability to pay.

In the next 15 to 45 days all the pending due diligence/collateral/guarantee documents will be finalised so that final approval can be made and loans disbursed within 15 days.

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