Co-operatives open opportunities for Rwanda cross-border traders.

Driving south from Kigali to the Burundi border, you might think that Nemba is one of the luckier border towns in Rwanda. A good road connects its unusually quiet trading centre to the nation’s busy capital, and the journey lasts only an hour, unlike the winding, up-hill distances to other border towns. Surely no one in Nemba buying goods from Kigali to sell to Burundi, would have a hard time running a quick and easy cross-border business?

Yet for women traders such as Benigne Maliboli, who sells a bottled local brew to Burundi, reduced transport costs to and from the capital did little to alleviate the gender-specific barriers to her cross-border trade.  Like many women traders, she lacked awareness of cross-border traders’ rights, rules and regulations as legislated by the East African Community.

Today, thanks to TradeMark Africa (TMA) funded Rwandan NGO, Profemme/Twese Hamwe, the women know better. “We now know that there is someone at the border who can assist small-time cross-border traders, who gives us information we need about both sides of the border. Before, we were not aware that such services existed at the border,” Benigne Maliboli says of her newly formed co-operative.

Many women traders purposefully do not register as such in order to bypass what they see as complications, and end up paying exorbitant bribes to keep their informal trade going. According to experts however, as informal as this trade is, it contributes significantly to the East African economy. Cross-border traders, say the experts, should be made aware of the benefits of becoming formal.

“Informal cross-border trade has been estimated at up to 60% of all EAC intra-regional trade and approximately 80% of those who participate in this trade are women”, says Gloria Atuheirwe, Programme Manager of Business Environment at TMA. She continues: “According to the State of East Africa Report 2012, the value of ‘informal’ intra-regional trade in 2010 was estimated at US$591 million. Generally, volumes of informal cross-border trade, and the conditions experienced go largely undocumented, meaning their contribution to trade expansion is unrecorded and ‘invisible’ to policy makers.”

To address regional economic losses, policy information gaps and crime fuelled by informal trade at Rwandan border points, TMA, in 2012 , funded  Profemme/Twese Hamwe, to implement a two-year project at five Rwandan borders, aimed at strengthening the economic power of women in informal cross-border trade.

In Nemba, Profemme encouraged the traders, who were scattered all over town, to group together to form co-operatives. Chantal Umuhoza, Project Coordinator at Profemme, explains the concept: “A co-operative is a group of people that come together for business purposes. They pool their resources and conduct whatever business they want to conduct, but make these business decisions together.”

When Benigne and 39 other traders, both men and women, were encouraged by Profemme to form the co-operative ‘Imbereheza Mucuruzi’ in 2012, the NGO also helped the group get legal status by registering them through the Rwanda Co-operative Institution. The co-operative is now a fully-functioning business ran by Benigne and five other supervisors. She explains how the business is supervised.

“As a co-operative we have permanent staff who run the business. Five are supervisors who visit every day. I visit every Saturday morning to see how the business is going. I also check the record books to see what the supervisors have noted down. So on a weekday like this (Tuesday) I would not be here, but Maria my colleague is one of the supervisors and would be here.” She points to a lady seated next to her, wearing similar traditional African dress.

Apart from assisting with the legal requirements of forming the co-operative, Profemme also taught the members how to apply for loans from financial institutions.

“We started in 2012 with little capital, from the contributions of the members. After registering however, we were supported by Profemme to apply for a loan from the Business Development Fund, and we have had two loans so far. After repaying the first loan of five million Rwandan francs, we successfully applied for another loan,” Benigne explains.

Her co-supervisor Maria, who proudly states that she is one of the original members of the co-operative, adds, “Ever since we formed a co-operative, we have seen increased capital for our businesses. We have increased the quantities we sell and our market has also increased. Every day there is more profit.”

With that increased capital the traders could buy goods and then sell them at a higher price, allowing them to expand their products beyond just maize flour, to include potatoes, sorghum, beans and groundnuts. Benigne says that they buy from farmers in the district of  Bugesera and sell in Burundi.

According to Profemme, one of the biggest benefits of being part of a co-operative is the access to the available resources from financial institutions that an individual trader would not have had.

“Financial institutions take registered cooperatives more seriously, because if an individual makes a mistake he or she can just decide to stop the business and even run away. Groups are more trusted by banks when giving out resources,” explains Chantal Umuhoza,

She adds that it is easier for organisations such as hers to identify and engage with co-operatives rather than individual traders. Profemme also provided business management trainings that included a very long, but fulfilling bus ride.

“I was also one of many taken on a study tour to Malaba on the Kenyan border, to see how other women cross-border traders operate. I was able to get information on how to trade with other countries,” Benigne recalls. “I was also trained in book keeping, how to count my profits, how to manage the business in general. I got that because I joined a cooperative. I apply those skills to my beer business too.” The “beer business” that Benigne also runs is the reason she has five other supervisors at the co-operative on weekdays.

A short distance away and still at the border, Benigne’s wholesale depot sells three types of local brew at 300 Rwandan francs a bottle. The product, which is standardised, with the ‘S’ mark displayed on its label, contains mostly honey and banana. The drink is popular with Burundians as well as locals, who stock their bars with it.

Benigne believes that what she learns in the co-operative, helps her in this business as well.  As she looks around at the crates and sacks of beer she says, “I can already see the profit I am going to get from my beer. There are 96 bottles in a sack. I gain profit of 4000 (Rwandan francs).”

According to Chantal Umuhoza of Profemme, working together has been helpful to the women in Nemba. “In one group you will have women with different qualities and experiences”, she explains. “They are able to exchange ideas, learn from each other and decided together what will benefit them and the cooperative.”

Benigne agrees, “Through the cooperative, I was also linked with other women who are doing business, which opened my mind to other ways of doing business. In the co-operative, since we were able to get a loan and increase our capital, I benefitted financially and the income I got from the co-operative helps me run this beer business.”

Benigne uses international contacts that she collects through the different workshops, to stay on top of the ever changing prices of the beer. “Profemme invited us to meetings and workshops, which were attended by Burundi traders as well. Whenever we meet we make sure we exchange contacts. I occasionally contact them to ask them about Burundi prices.”

As for the future of Imbereheza Mucuruzi, Benigne states that the co-operative has applied for a loan to buy a machine to process maize flour from the maize grain they currently sell. They know that trading in flour will be more profitable. They also plan to brand the maize and store it in sacks bearing the name of the cooperative.

 When asked about her experience co-ordinating this project and engaging with these entrepreneurial women cross-border traders, Chantal Umuhoza smiles.

“Personally, the most fulfilling thing has been seeing these women move from one stage to another. I have seen women’s incomes increase due to the success of their businesses. I have seen their lives change. That is very fulfilling.”