At 7:15am in the morning, I got into a car with my MFI’s boss and three other employees. They were headed to Kurgan-Tube, a town about 150km from the border of Afghanistan, to check out a few things at their local branch and offered me to come along. Since this would be a good opportunity to meet with a few micro-finance borrowers in that area, I jumped at the opportunity.

When I got to the branch office, one of their loan officers offered to take me to a handful of his clients that were coming to an end of paying back their loans. These are typical micro-finance customers and the following are their stories:

Matluba Holboeva – Bazaar Vendor

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Before the Civil War started in Tajikistan in 1992 and went on until 1997, while taking over 50,000 lives, Matluba Holboeva was a school teacher. When the war started, her salary stopped coming – the school administration simply withheld the payments from her and other teachers. Left with little choice and having to do something, anything, to put the food on the table, she started a little stall at a local market in Kurgan-Tube where she sold fine fabrics.

Instead of paying a monthly rent of 200 Somoni (~$52 at current rates), she purchased it outright for a hefty fee of 1,100 Somoni per square meter (around $300 per square meter). For over 14 years, she’s been selling fabrics at her stall now. She buys them in bulk in Dushanbe (capital city) for about 3 Somoni a piece ($.80) and then resells them at her stall for about 3.5 Somoni a piece ($.92) – making a small profit of just ~0.12 USD on each piece she sells (although there are more expensive items).

She took out her first loan from HUMO last year for about $1,000 for 6 months in order to purchase a bigger selection of inventory. She will be done with repayments next month. Using the increased profits that she realized from this loan, she was able to pay for the wedding of her child – something that every parent has an obligation to do for their kids in Tajikistan.

Did you know? Under the current environment, a teacher’s salary in Tajikistan is about $150 per month ($5 per day). Considering that it costs at least $500 per month to raise a family in the city – in terms of food, housing, transportation, etc. – it’s not surprising that many teachers are leaving the field or supplementing their income by selling goods at local markets.

Mashhura Hidirova – Bazaar Vendor

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Ten years ago, Mashhura Hidirova had an opportunity to start her own business. She was living with her parents, as a new market was opening up in her town. She was able to get a good location for about 5 Somoni per day rent (around $1.25/day) – which is a typical price to pay at these markets.

She currently specializes in selling men’s pants – particularly jeans – out of her stall. She makes regular trips to Dushanbe (the capital of Tajikistan) where she buys her inventory – starting at about 25 Somoni for the lowest-cost jeans (around ~$6.50). When she resells them at her stall, she adds a markup of about 20-30% (e.g. same pair of jeans would sell for about $8). However, you won’t find any price tags on her products – or for that matter, any other vendor on the market. The prices in these markets are, in large, dependent on the buyer – their bargaining ability, their buying capacity, and so on.

Her biggest group of clients are students. Interestingly enough, she mentioned, the students these days are becoming more interested in formal pants, rather than jeans. This is mainly driven by the fact that many colleges and universities have a strict dress code – where students may be required to dress formally or they won’t be allowed in the class.

Mashhura is currently on her 2nd loan from HUMO – with just two months of repayments left. Using the profit she made after using the loans, she was able to fix her house and buy a washing machine.

Did you know? If you have good bargaining skills, you can get pretty good deals at the markets these days, as many vendors are forced to offer steep discounts to compensate for the decrease in sales and customers. The ripple effect of the world’s economic crisis touches upon developing countries, as much as the developed ones.

Mahmadi Alihanov – Taxi Driver

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We’ve (myself – Kiva Fellow and HUMO’s loan officer) met Mahmadi as he was waiting in a taxi line at the bazaar to pick up new clients. That’s one of the most popular locations in Kurgan-Tube, Tajikistan, as people come out from the markets and need a ride home with their newly acquired goods. The ride in a taxi costs just 1 Somoni (about $0.25), but you’ll have to share the taxi with 3 other passengers – as it won’t leave until it’s filled to capacity.

Mahmadi invited us to sit in the taxi, as he didn’t want to lose his place in line, while he shared some details about himself and his business before and after the loan.

Before becoming a taxi driver, he worked in Russia in the construction sector for 6 years – as over a million Tajiks do. However, 5 years ago, he had to come back to Tajikistan for family reasons and wound up starting in this line of work. The job is very stressful, he said, as the traffic is difficult to navigate and you have to be always on your toes. Plus, working for 7 days a week for 12 hours a day, has its toll and can be tiring.

Each day, he carries about 80 to 100 passengers, which earns him about $20-25 per day (minus expenses). Using the loan from HUMO, he was able to convert his taxi to run on both gasoline and natural gas – which can be significantly cheaper, more efficient, and cleaner. Although this was certainly an expensive investment upfront, it will yield him significant savings on his fuel consumption in the long run.

Did you know? It costs about $350 to convert a vehicle to run on liquid (zhizhenij) gas or about $1,000 to make it run on natural gas. As Tajikistan has rich deposits of both, it is a much more economical form of fuel than gasoline – not to mention cleaner for the environment.

Karima Kahorova – Baker

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The fragrance of baked bread permeates every corner on Karima Kahorova’s apartment. It’s no wonder, as she – along with the rest of her family – produce between 2,000 – 3,000 little bread buns per day.

Karima has a culinary degree from a local university that she received years ago. However, as opportunities to use it at a regular job are scarce in Tajikistan, she’s been working for herself for years. She works directly out of her apartment in order to save money that she’d have to pay on rent elsewhere. But it hasn’t been much of a problem in terms of finding clients, as she sells her finished goods in bulk to retailers that then resell it at a local bazaar. A bun from her costs just 20 diram ($0.05) – which is then resold at a market for about 25 diram ($0.06-0.07). A comparable product at a store would be about twice that cost.

She keeps the costs low by working long hours – sometimes, 24 hours a day if needed to fill the demand. The rest of her family helps out, as well – her husband and kids work in the business. But the conditions are difficult – the bulk of the production takes place in the living room, while two small stoves are in the bedroom. “It’s not ideal, but you have to do what you have to do,” she says.

She used her $500 loan from HUMO to stock up on supplies and raw materials, which cost cheaper in bulk. She’ll be done with her repayments shortly and is considering taking out another loan in the near future.

Did you know? When you go to any cafe or choihona in Tajikistan, you will always be served two things regardless of what else you order – a big, fresh pita bread and a pot of hot, sweet tea with lemon. If you are a guest, the host will always break the bread into smaller pieces and will pour the tea in your cup.

Sadbargul Faizova – Raises Livestock

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Sadbargul, along with her husband, had one cow when she found out about HUMO’s micro-loans. She took out a 12-month loan for $800 in order to buy a 2nd cow, along with the feed for both of them for the winter.

When she took out the loan, a cow could be purchased for about 1,000 somoni ($260). However, due to the dollar getting stronger over the last half a year, the same cow could cost about 1,500 somoni today ($390). It also appears that they got a good return on investment, as one of the cows recently gave birth to a young, healthy calf.

Although Sadbargul has been doing this work her entire life, she has 3 young sons that she wants to provide an education to, so that they could have more opportunities when they grow up.

Did you know? Each of the Sadbargul’s cows can produce about 2 to 4 liters of milk per day, which can be sold for about 2 somoni per liter. This adds about $1-2 per day to the family’s income.

Parting Thoughts

Many of the borrowers are somewhat hesitant about answering questions and, oftentimes, the questions themselves seem to puzzle them.

Whenever I speak to a borrower, I always wonder about whether the loan helps them to grow the business – today, they have 1 cow, do they want to have 3 cows next year and 10 cows the year after?

The answer, surprisingly, is usually no. The profit from the increased business activity is usually used in consumer purposes – to fix up the house, pay for a wedding, etc. – and the business typically stays on the same level.

Then again, maybe the quality of life doesn’t depend on having 10 cows … and that’s just my Western mentality.

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* This post has been written by Boris Mordkovich, a Kiva Fellow working for 10 weeks in Tajikistan for MLF Humo and Partners. Check out currently fundraising loans by Humo and join Kiva Lending Team – Supporters of Tajikistan *

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