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Report 1 (of 5):Community
Capital - Uganda
Introduction
Uganda's improved political stability
and economic growth in recent years has been a welcome
boost for a country previously governed from the centre.
Unfortunately, despite investment in rural areas there
has been considerable rural-urban migration so that
many urban residents are suffering from overcrowding
and a lack of basic services. In the capital city
of Kampala, residents live in an area designed for
less than half its population, and pressure on infrastructure,
services and resources is causing widespread poverty.
Poor housing and nutrition, low literacy
rates, increased unemployment and crime, and increasing
numbers of street children and the destitute are all
symptoms of the government's investment bias to rural
areas. One solution is to empower urban communities
by providing basic services and enabling them to become
self-sufficient. Small enterprises play an important
role in self-sufficiency by creating employment and
income and reducing poverty. Providing local communities
with the skills and training to be able to start up
small business enterprises can make all the difference.
In Uganda and also in Zambia, the
City-Community Challenge Fund (C3F) has been established
by the UK Department for International Development
(DFID) to channel large-scale funds to small-scale
community projects, while improving the relationship
between communities and their local councils in the
process. In Uganda the programme has been undertaken
in two urban communities and is managed by the Local
Government International Bureau (LGIB) from the UK
in partnership with the Uganda Local Authorities Association
(ULAA). Focusing largely on small enterprise schemes,
it provides small amounts of capital to small groups
and individuals looking to establish small-scale local
businesses.
The Community-City Challenge Fund
in Uganda
The C3F programme in Uganda has been
developed to transfer funds via local council divisions
to two of the most disadvantaged urban communities
in Uganda: Kawempe, a suburb in the capital city Kampala,
and Mpumudde, the most deprived part of the country's
second city, Jinja. Kawempe has a population of more
than 230,000 living in just 25 square kilometres.
Over 9,000 people live per square kilometre and have
no land for cultivation, are unconnected to the main
sewerage system and have little drainage.
Rubbish is left largely uncollected.
In contrast, Mpumudde is sparsely populated with around
25,000 inhabitants but has the highest level of unemployment
in the municipality. With most low-income earners
engaging in informal business, investment to start-up,
improve or expand these businesses is vital to both
communities.
Dialogue between local residents and
local councils on the use of funds has given individuals
a chance to identify their own priorities for development
and discuss how these can be supported. Building capacity
to work and manage projects through skills training,
micro-enterprise support for small businesses, and
social service and infrastructure provision have all
been high on the list of priorities. These have been
chosen by the local communities themselves, which
means politicians and professionals are not deciding
for the poor what resources they should receive.
Small-scale Investment
The focus of C3F is not to fund big
projects but to make small investments, which are
usually around US$100 to $1,000 and initiated, managed,
monitored, supervised and owned by the community itself.
Support for existing small businesses and help to
start up new ones has meant many people have been
better able to take advantage of demand, thereby increasing
income and creating new jobs. The 18 parishes within
Kawempe are focusing most of their funds on small
enterprise schemes by providing small amounts of capital
to groups and individuals establishing small-scale
local businesses. So far the C3F programme has supported
over 140 small business projects in Kawempe, enabling
some to pay previously unaffordable school fees.
In Mpumudde, funds have been used
to support and help establish the Mpumudde Housing
Project with the aim of building up to 286 low-cost
homes. The sheer diversity of grants has helped direct
investment to basic services such as water provision
and housing, businesses such as grocers and tailors,
and women's groups and youth associations. Some examples
of the different areas of community activity funded
are shown in the table.
Examples of Funded Areas
| Individuals |
Business
Enterprises |
Groups |
Associations |
Tailoring
Charcoal vending
Food cooking and vending
Hairdressing
Hand crafts
Poultry farming
Water vending
Brick making
Fish vending
Dry cleaning |
Food processing
Farming
Carpentry
Water supplying
Brick laying
Maize trading
Retailing |
Women's
Poultry farming
Pig farming
Brick making/laying
Disabled
Drinks
Savings and credit
Tea packaging
|
Fishmongers
Housing
Bakery
Youth |
A young people's fish farming cooperative supported
by C3 in Kawempe
|
In Mpumudde, the housing development
programme allows a maximum allocation of US$2,200
per household, approximately US$1,900 of which provides
materials and labour for a house. The remainder is
used as a loan for income generation. Communities
have been very vocal in supporting loans to individuals
interested or involved in small enterprises. In Kawempe,
grants for small enterprise projects range from US$25
to $1,300. Individuals receive grants only when a
clear community benefit can be demonstrated. Where
grants are given to groups, these are free to rotate
the funds internally in order to continue the funds
on a revolving loan basis.
Funding has been used for training
beneficiaries in saving, bookkeeping, forming groups
and implementing projects. It has also paid for workshops
for extension workers and council staff in documentation,
business skills, and financial management. In Mpumudde,
beneficiaries have been learning practical skills
such as brick making, masonry and plastering, with
the hope that it will lead to future income.
An old house in Mpumudde, where shelter was identified
by the community as a major need. This couple
were the first to move into one of the new homes.
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Prototype low-cost housing in Mpumudde, built
by the community using local materials.
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Applying for Funds
Application forms have been designed
to make it as simple as possible for groups to apply.
People are made aware of the funds through initiatives
including the circulation of pamphlets and posters,
radio broadcasts and community meetings.
In both locations, parish-level 'Focal
Points' have been set up by the local community to
collect and consider all grant applications and forward
recommended projects to the Local Implementation Units
(LIUs) for approval. The Kawempe and Mpumudde LIUs
comprise representatives from Focal Points, local
councillors, municipal officers, local NGOs, local
businesses and representatives of beneficiaries. Focal
Points receive applications and arrange visits to
each applicant group in order to collect appropriate
information. This is discussed and recommendations
made to the relevant LIU, whose members also visit
each recommended group or individual before approving
grants. This is done in order to assess the authenticity
of the application.
Approvals are submitted to the National
Coordinating Unit (NCU), staffed by the Uganda Local
Authority Association, who release funds by cheque
to beneficiaries through the LIU. Transparency is
vital and grants are publicised on all Parish and
Village notice boards - which, together with group
and community approvals and peer scrutiny, has enabled
the potential for corruption to be greatly reduced.
Investing in the Future
The C3F programme in Uganda has helped
to support many varied small-scale initiatives that
the local government often does not have the resources
to fund. Allowing groups and individuals to apply
for funds within a broad remit creates opportunity
for local priorities to be voiced. With applications
assessed and recommended at community level, and decisions
made by community represented groups, fund allocations
are locally driven. The emphasis on building practical
skills has given individuals the ability to help manage
their finances and sustain their own businesses.
In Kawempe the focus has been on small-scale
enterprise, supported by a series of training programmes
and materials in enterprise skills. In Mpumudde the
focus has been on social infrastructure, also supported
by training in financial management and micro-enterprise
loans to allow new households to develop land received
through the housing scheme. Here C3F schemes encourage
broader community development, including health and
educational provision around the housing development.
Ongoing dialogue and collaboration
between communities and local councils is ensuring
that cooperation by sharing ideas and experiences
is providing an effective approach to poverty alleviation.
Training programmes have been put in place for councillors,
extension workers and parish chiefs to develop their
capacity to manage the project's development. This
genuine participation is important in bringing transparency
to local governments and ensuring they respond to
community needs and demand in future. Political support
for C3F is also evident, with the Mayor of Jinja keen
to extend the programme to the other Divisions of
the city and even pledging to spend a day making bricks
with the community.
All images courtesy of LGIB.
For further information, please contact:
Uganda Local Authorities
Association
NIC Building
7th Floor, Plot 3
Pilkington Road
Kampala
Uganda
Tel +256 41 347 935 / 347
575
Fax +256 41 251 949
Email: ulaa@swiftuganda.com,
ulaa@africaonline.co.ug
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Local Government International
Bureau (LGIB)
Local Government House
London SW1P 3HZ
United Kingdom
Tel +44 20 7664 3100
Fax +44 20 7664 3128
Email: enquiries@lgib.gov.uk
Website: http://www.lgib.gov.uk/
|
| City-Commuinity Challenge
Fund Pilot Project (C3F)
http://www.c3f.org.uk/
This is the official DFID
website of C3F project, which has more information
on the pilot projects and links to practitioners
and policy makers working with community-led
small-scale projects. |
Information on micro-finance
Asian Coalition for Housing
Rights
73 Soi Sonthiwattana 4
Ladprao 110
Ladprao Rd Bangkok 10310
Thailand
Tel: +662 538 0919
Fax: +662 539 9950
E-mail: achr@loxinfo.co.th
Website: http://www.achr.net/
The ACHR, based in Thailand,
has a website that contains a lot of information
on community funds. There is also a special
newsletter on community funds, which can be
obtained for free by contacting the organisation.
|
| Alternative Finance
www.alternative-finance.org.uk/en/links.html
The Alternative Finance website
has a comprehensive list of organisations
focusing on micro-credit and micro-enterprise
around the world. |
| Eldis Microfinance Gateway
nt1.ids.ac.uk/eldis/fin/micro.htm
The Eldis Microfinance Gateway
lists many organisations involved with micro-credit.
It also has many country profiles, where papers
from different countries can be viewed, and
organisations working in those countries can
be found. |
| MicroFinance Network
www.bellanet.org/partners/mfn
The MicroFinance Network is
a global association of leading microfinance
practitioners. The members of the MicroFinance
Network are committed to improving the lives
of low-income people through the provision
of credit, savings and other financial services.
|
| The Microfinance Gateway
http://www.microfinancegateway.org/
The Microfinance Gateway is
a public forum for the microfinance industry
at large that offers a wealth of tailored
services for microfinance professionals, including
resource centres on specific topics in microfinance,
a searchable library of electronic documents,
a consultant database, a jobs listing service,
and specialised discussion groups. |
Further Reading
Local Funds; Some Notes on What
has been Learnt over the Last Fifteen Years
and
Local funds, and their potential to allow donor
agencies to support community development and poverty
reduction in urban areas: Workshop report
David Satterthwaite, IIED
These papers can be obtained by contacting
IIED's Human Settlements Programme at:
IIED
Human Settlements Dept.
3 Endsleigh Street
London WC1H 0DD
United Kingdom
Tel +44 20 7388 2117
Fax +44 20 7388 2826
Email: humans@iied.org |
Africa
You can download the following documents
by clicking on the titles.
Hope
for the Urban Poor: DFID city-community
challenge (C3) fund pilot in Kampala and Jinja, Uganda
Environment and Urbanisation Journal, Vol 13, No 1,
pp 115-124.
Asia
The
Urban Community Environmental
Activities Project, Thailand
Environment and Urbanisation Vol 11, No 1, April,
pp 101-115
Books from ITDG Publishing
Value for Money? The impact of
Small Enterprise Development
Malcolm Harper and Gerry Finnegan
£14.95, ITDG Publishing, 1998, ISBN: 185339436X
Building Businesses With Small
Producers
Sunita Kapila and Donald Mead
£14.95, ITDG Publishing, 2002, ISBN: 1853394947
This document is an output from
a project funded by the UK Department for International
Development (DFID) and the European Commission (EC)
for the benefit of developing countries. The views
expressed are not necessarily those of DFID or the
EC.
Acknowledgements
ITDG would like to thank Joanna
Wright at LGIB for providing the original material
on the C3F project.
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