This piece comes from Luke Seidl, Kiva’s Senior Investment Manager of Small & Growing Businesses. Originally published May 2020.
Introducing Cycle Connect
During the COVID-19 pandemic, the Kiva Social Enterprise team has reached out to all of the 85 businesses we’ve supported to check-in and understand their situations. We want to share this particular story of one loan recipient, which illustrates the type of businesses we’re lending to and the challenges they’re facing.
Cycle Connect is a social enterprise in northern Uganda that provides income-generating products such as bicycles, motorcycles and oxen to farmers on credit. This equipment allows farmers greater market access and increased efficiency in tilling the land, which otherwise is often performed by hand. These productive assets can reduce the tilling process from 30 days to three, and help farmers plan better for rain, better saturate seeds, cultivate more land, and build more resilience. Having served more than 7,500 farmers, Cycle Connect measures a greater than 30% income increase, on average, among their clients.
While Uganda has under 150 confirmed cases, it has instituted a lockdown, ban on public transport, and closed its borders.
As a result, sales were minimal throughout most of March and Cycle Connect deferred their client repayments for the indefinite future. Like many organizations, they are facing potential layoffs or pay cuts. But they’re striving to be as impactful as possible during this period and retain their more than 30 employees.
How are they doing this?
In late March, in a matter of days, Cycle Connect shifted from an in-person field-based organization to a remote support call center.
Over two weeks, they interviewed more than 1,500 farmer-clients and over 60 health centers to understand their needs and if they could help. They also spoke with 85 local and district government officials and were deemed an essential service.
A plan to address food shortages
Cycle Connect heard hundreds of stories from rural farming families that market closures and travel restrictions are causing food shortages and forcing them to eat through their seeds in an attempt to put food on the table. Of course, this jeopardizes their harvest and food security for the coming months. Planting was meant to begin in mid-April in order to ensure a strong harvest, and farmers are urgently in need of seeds on financing. This is moving Cycle Connect to action.
Cycle Connect created an emergency seed loan product to disburse to farmers immediately. This type of agriculture input loan is new to Cycle Connect, but they believe they need to urgently adapt. Read more about how they’re ensuring food security.
Health centers indicated that transportation for doctors and nurses to get to clinics was a huge challenge due to the ban on public transportation. Some healthcare workers are walking over an hour to work. As a response, Cycle Connect has donated 109 bicycles to medical clinics.
As the world copes with unprecedented challenges and small businesses struggle to adjust to difficult new realities, Kiva is responding quickly and will continue to prioritize impact, mission, and flexibility to meet businesses’ needs. We recognize debt obligations are a source of illiquidity and want to support these organizations in their diligent work during this pandemic. As a result, we’ve granted Cycle Connect a 3-month moratorium on its $50,000 Kiva loan to relieve some pressure during this crisis.
“Now more than ever our stakeholders need our support in Uganda and now more than ever we're in turn grateful for Kiva’s support to enable it.” - Molly Burke, CEO of Cycle Connect
We have offered repayment relief to several social enterprises with loans coming due in the next 3 months. In addition, our team is evaluating applications for our emergency loan product to help businesses weather the shutdowns and disruptions.
You can read more about Kiva’s Crisis Support Loans here. Now more than ever, the Kiva lending community has an even higher social impact. We are grateful to our lenders and remain steadfast in mission during this global pandemic. Together we can help communities emerge stronger in its wake.
Support organizations like Cycle Connect today with Crisis Support Loans.