Victoria Joram is 36 years old and has run a workshop and shop on the outskirts of Dar es Salaam in Tanzania since 2001, where she repairs and sells accessories for mobile phones. Business has been good since the very start and two years ago she was able to hire a technician to help with the repairs.
"The best part of the job is the technical part," she explains. "I enjoy being able to help people get their broken phones working again."
Earlier in the year, she heard about the possibility of applying for a favourable loan from the local bank in order to expand her operations.
"It was perfect for me," says Victoria. "Moreover, it was easy to fill in the application and the information regarding terms and conditions were clear. With this loan, I have been able to increase my turnover by purchasing more products. The customers are happy."
In this case, it is one of Tanzania's commercial banks, Advance Bank, who granted the loan. The bank collaborates with the Financial Sector Deepening Trust (FSDT), a programme that works so that more people living in poverty can gain access to financial services such as loans, credit, savings and insurance. FSDT collaborates with banks and cooperatives to improve their capacity for catering to small borrowers, sometimes with high risk, through the recruitment and education of loan officers.
Victoria's loan is low level – below 10 million Tanzanian schilling (approximately 6300 USD) – and is repaid over a period of six months. The interest is low at around 4 per cent.
"Now I only have two payments left," explains Victoria. "When this first loan has been paid off, I want to apply for a slightly bigger loan. My customers are inquiring about other services, for example, help with removing viruses from their phones. For this I need special equipment, which I intend to buy with the new loan."
FSDT also works with stimulating the development of Mobile Money Transfers, a service that facilitates more efficient money transfers, which are increasing at a rapid pace in East Africa right now. In Tanzania, the frequency is increasing significantly and the number of users is currently more than 4 million, which is double that of the previous year. This corresponds to approximately 20 per cent of those that have access to a mobile phone in Tanzania. Specifically, it is about making it easier for a large portion of the population that do not have access to a regular bank to make payments, send and receive money through their phone.
"A very small part of the Tanzanian population have access to a formal bank through a bank account or loan," explains Jonathan Kasembe, Technical Manager at FSDT. "Our mission is to change this, partly through supporting the banks, but also through stimulating alternative forms such as Mobile Money Agents."
Victoria is also planning to join Mobil Money Transfer so that the customers can pay her by means of a simple text message, and so that she can also register the day's takings directly in her own phone.
"It is a service that the customers expect," she explains. "It is also safer for me to not have money in the store."
Victoria has many plans for how she would like the operations to develop in the future.
"I have good contact with my customers and they come back to me when their phones play up, or if they need accessories," she says. "I would also like them to be able to buy brand new phones from me, which is currently not possible. Who knows, I may also start up a hair salon," she laughs.