Stromme Microfinance East Africa Financial services for the poor

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Plot 25, Bukoto Street, Kamwokya,
P.O.Box 27200,
Kampala, Uganda
East Africa

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smfeaceo@stromme.org

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Value Chain Development fights Poverty at Many Levels.

SMF EA Limited partners with ECLOF Tanzania to support enterprising rural and peri-urban individuals and companies to grow and increase their reach and production. The end goal is to see people lifted out of poverty by making it easy for them to access financial services.

Mr.-Manang

Mr. Manang addressing SMF EA Limited Board and Management

The Grande Demam Co. Limited is one of the companies that has benefited from this partnership. Its proprietors have been clients of ECLOF Tanzania since 2013. They shared their journey with members of the SMF EA Limited Board and Management who visited the company in May 2018. The company is located just a little outside Arusha town in Leganga, USA River. During the early months, the brothers produced milk from their home and sold to Arusha town clients at the younger brother’s shop. They used to produce 50 litres of milk each day. However, they incurred losses whenever they could not be able to sell all the milk. This was especially the case during the dry season as many would opt for cold drinks as opposed to milk tea. Mr. Ismail Manang, one of the brothers shared this challenge with a friend who advised them to think about value added dairy products that last longer.  This is when they thought of starting a yoghurt factory. Shortly after that, with training received in making cultured milk products by an expert from Nairobi, they launched their our factiory.

“It was difficult at first. All we had were rudimentary methods of production. We had no machines. We just used a charcoal boiler in a small kitchen.” – Mr. Manang

Still they maintained business discipline which saw the company grow from needing 50 litres of milk to 100 litres and then to 120 litres.

The production manager at Grande Demam explaining the process to the SMF EA Ltd Board members.

The production manager at Grande Demam explaining the process to the SMF EA Ltd Board members.

The company became popular and attracted TFDA (Tanzania Food and Drug authority) who not only certified their newly identified production house but also offered them training. In 2014, they managed to buy a big boiler and that relieved a lot of stress off their shoulders. Their input increased to 500 litres per day. When ECLOF Tanzania came in, the loan funds received from them helped to expand capacity of the cold room for the products to be preserved, they were also able to purchase a packing machine to help in the packaging of the product.

In addition, ECLOF Tanzania loan funds enabled the company, in the early months of inception to start buying milk from the small holder farmers which more than tripled their production. Currently Demam uses 2000 litres per day to produce various dairy products. The farmers are organised in small holder groups which are used as collection centres and payment centres. There are now 2000 farmers who supply milk to Demam at Tshs 1,000 per litre. Demam hires an expert to test the milk from each individual farmer before it is accepted. This is to ensure quality control. At the end of every month, the farmers then get their payment based on how many litres each has supplied.

Apart from providing a market for the dairy farmers, Demam got certified to train farmers in their area on various aspects of dairy production. The district council also comes in to help in the training. Mr. Deo Temba, one of Demam’s proprietors is also a trained veterinary doctor. His expertise comes in handy to help farmers guard against common diseases among cows. He also offers nutritional supplements for the cows to the farmers who may need them at a subsidised cost which is offset at the time of their pay for the milk supply.

A staff packaging Demam Yoghurt.

A staff packaging Demam Yoghurt.

The Grande Demam currently employs 18 people including drivers, training team, marketing and sale, operations, production personnel. Their main product is cultured milk/yoghurt and cheese which they produce in flavours of vanilla and strawberry and supply to different outlets in Arusha. “We have competitive advantage considering that we are a home-grown company, right here in Arusha region. Before all our milk products came from Iringa region but now we provide our products to the people of Arusha without having to travel long distances.” ~ Mr. Manang.

“We have competitive advantage considering that we are a home-grown company, right here in Arusha region. Before all our milk products came from Iringa region but now we provide our products to the people of Arusha without having to travel long distances.” ~ Mr. Manang.

Packaged Yoghurt is then taken to the cold room until distribution.

Packaged Yoghurt is then taken to the cold room until distribution.

One of the main challenges faced by the company is the lack of cooler tanks in the villages where the milk is collected before it is transported to the company. This was stressed by the farmers themselves during the board interaction with Kiwamu group. They also shared that transportation is difficult sometimes especially during the rainy seasons. When the Demam vehicle gets a break down and delays to pick the milk, they risk making losses. The group is currently saving towards getting a truck of their own.

This is a story that goes to show us how one small link can contribute to the development of a community and eradicate poverty in a sustainable way.

New-Potential-staff

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