FIGP Archives - SASDI Alliance

The importance of saving: the pillow maker in Samora, Cape Town

By FEDUP, Savings No Comments

Compiled by Carmen Cancellari (on behalf of CORC)

Through the Federation Income Generation Programme, FEDUP savers have an opportunity to establish small businesses to generate income through accessing and repaying loans. 

The financial aspect is crucial, but how can the Federation contribute to building solidarity and sharing among FEDUP business women? The experience of Patience, a resident in the informal settlement of Samora in Philippi, Cape Town, gives us some insights about the impact of FEDUP in the life of women.

My name is Patience and I live here in Samora, Philippi.  For a living I have my own business, I make pillows. Now it’s been 7 years that I have been doing this. The first time I heard about the Federation it was in 2013, and that is also when I got my first loan.

What changed after receiving the FIGP (Federation Income Generation Program) loans was mainly in relation to the stock for my business. In fact, I was able to increase stock for my business and this also resulted in the increase of my profit. This helped me at home because I was responsible for my child’s education fees, who was studying at University of Western Cape, and since I could pay for her studies, she was able to continue and she graduated last year. So this is what was important, because my intentions and priorities have always been helping her to finish school.

Even at home I was able to fix some of the things. For example I managed to extend our house, I added two rooms and I saved some of the money… if it wasn’t for the loan I can say it was almost impossible to do all of this because I did not make enough profit from my business.

My business grew already a lot but I don’t want to stop here. At the moment, I am busy saving so that I can be able to buy a container. In fact now I cannot employ someone to help me because there is no space for both of us to work. Instead, I want someone who is going to help me because making pillows is very difficult and my business really needs me to hire someone. As a result of the stock which has increased in fact, my job has also increased and this is why I need someone to help me.

With my savings I think I will be able to buy the container next year January. And I do not want to rush it and end up having debts that I will not be able to pay back…I just want to save and know that I will be able to buy it.

Savings in fact is the heart of the Federation. My business improved a lot because through the Federation I learnt a lot about saving. Nolwando, one of the Federation coordinator, always teaches us about saving on top of the loans, and this way I have learnt how to save. There were times where I did not save at all and I was using my money on useless things.

I remember when I was working in Tsusa, there was a lady working with us who used to buy meat on a regular basis. She would make three orders a week! So one day I told her, as a person who was taught how to save, that she could save the R60 that she was spending on buying meat by, for example, eating cabbage and meals that she had prepared at home!

So the federation has helped me because now I am able to save and I can also help other people. And even today that lady has not forgotten me because I really helped her.

Patience (left) with FEDUP loans facilitator, Nolwando (centre)


Expanding Informal Settlement Upgrading through Khayalethu Livelihood Initiatives

By FEDUP, ISN One Comment

By Thandeka Tshabalala (on behalf of CORC)

As the last quarter of the year comes to an end, we take time to give an overview of the Alliance’s Khayalethu livelihoods initiatives that have been supported by the Alliance’s City Fund.

The Khayalethu Initiative supported by UK funder Comic Relief is a collaborative platform between three urban sector NGOs including CORC, on behalf of the SA SDI Alliance. CORC’s work centers on the creation of a City Fund that would act as a citywide finance facility for community identified upgrading and livelihood projects in Cape Town. The aim is to leverage partnership and financial contributions by municipal counterparts. (Read more here.)

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The Khayalethu livelihoods initiatives aim to demonstrate the linkage between informal settlement upgrading and sustainable livelihoods. The SA SDI Alliance has recognized that there is critical need to move beyond informal settlement upgrading, with a focus on infrastructure and basic services provision to improved livelihoods and income generating initiatives within informal settlement communities. In-situ upgrading with minimum relocations adds value to strengthening livelihood opportunities because community governance is strengthened and community vulnerabilities such as basic infrastructural services (e.g. water, sanitation, electricity), shelter, social services (e.g. education, health care, Early Childhood Development) and skills development is dealt with during these upgrades.

Consequently, community socio-economic vulnerabilities such as crime, unemployment and access to education or health care are usually identified during the profiling and enumeration exercise. With all the challenges facing low-income households in informal settlements the Alliance, together with communities, aims to find strategies to strengthen and enhance livelihoods in informal settlements. The focus on improving people’s livelihoods is about improving their living conditions, quality of life and prospects for the future. The emphasis is on creating sustainability and resilience within the community with little reliance on external sources. This is reflected in a phrase often used by Alliance members: we use what we have, where we are. The Khayalethu livelihoods programs highlighted here, respond to unemployment, food security, lack of access to early childhood development and strengthening livelihood through skills development.

Community Bakeries

The project was initiated in October 2014 as a social enterprise and livelihood opportunity for the ISN and FEDUP members. Ten groups consisting of 5 members were selected from several communities within Cape Town namely Khayelitsha, Mfuleni, Gugulethu and Philipi. The members’ trust among each other and eagerness to start the business was the driver for the project. Members were selected from the existing savings schemes and community members who had the will to start a business. Saving was emphasized as the main driver of a successful collective based business. Savings as the backbone of the alliance brought several benefits to the groups such as building trust among members and providing resources for the business. A baker-to-baker exchange was used to strengthen and transfer knowledge among members. The exchange assisted the groups’ improvement in product quality and solidarity among group members. Bakers from well performing groups visited bakers from non-performing groups and visa versa. They all spent the day baking and marketing the product.

The challenges of setting up the community bakeries were building solidarity among members through a well-kept financial record and constitution. Due to the lack of basic numeracy and business management skills setting up a collective enterprise takes up a lot of mentorship. However, participants with existing or previously owned businesses proved to be successful because they understood the basic principles of operating a business. Other challenges such as crime and lack of access to trading spaces take a toll in the growth of such small businesses. As spaces in informal settlements are highly regulated by the local municipality, community members needed to get permission from the local municipality to put up trading stalls. They were therefore forced to bake from their homes.

Training and skills development

In partnership with The Business Place and The Tourism Business Institute of South Africa (TTBISA), community members with existing businesses were given skills development training. TTBISA with the support from Food and Beverage Seta offered a baking and hospitality learnership for 14 youth members from the community bakeries. The learnership equipped the bakers with business management and baking skills. With the stipends received from the learnership the students contributed towards the growth of their businesses. They were placed in various retail shops in the city so that they can learn more about customer relations and management of their businesses.

The Business Place offered short training courses on market research, business banking, costing and pricing of products to small business owners in the communities. The courses were offered to people who wanted to start, improve or expand their business. This opportunity was expanded to members of the Federation Income Generation Program (FIGP), who, after accessing loans they were mentored on how to start a small sustainable business.

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Food security and nutrition through Gardening

Due to high unemployment rates and distant location of certain settlements from economic opportunities, food gardens become an important vehicle to address food security and nutrition among low-income groups and informal settlements. In partnership with Soil for Life the Alliance trained community members in organic farming. For three months the community-farming group is trained in building the soil (most of the soil in Khayelitsha is sandy and becomes difficult to grow food), transplanting and developing the vegetables. Sustainability of the gardens is vital hence the groups are taught how to build their own compost and harvest seeds for the next crop. Due to lack of space in informal settlements, Soil for Life places emphasis on growing vegetables in limited spaces, containers and bags.


Livelihoods through recycling

The Solid Waste Network (SWN) is a network of approximately 1500 informal waste pickers in informal settlements. The recycling program is a social enterprise program with the aim of delivering a unique and value adding collection and payment service to informal waste pickers across Cape Town. The goal of this initiative is to create access to livelihoods and income generating opportunities for informal settlement residents through the recycling of glass, plastic and paper waste.

Despite being targeted by criminals during collections and experiencing product pricing fluctuations, the SWN managed to sustain its operations. In order to strengthen the network cluster meetings, recycling workshops were used to create awareness about recycling. Therefore, the strength of the program lies in the collective: collectively waste pickers removed 50 tons of waste.

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Early Childhood Development

Early childhood development is important for the growth and education of all children. While planning a multi-purpose centre, the community of K2 in Site B, Khayelitsha decided to start an informal space-based crèche. The analysis of the enumeration showed that there was a high number of children not attending crèche. This was partly due to the high unemployment rate in the settlement and the parents’ inability to afford crèche fees. The residents used the results from the enumeration to improve access to early childhood development for their children. In partnership with Sikhula Sonke, the community has started an informal learning space, which will be integrated into the multi-purpose centre once completed.

Unemployed but Making Money: Income Generation in Port Elizabeth

By News No Comments

By Yolande Hendler (on behalf of CORC)

Bulelwa Msila & her mother sell vegetables in New Brighton, Port Elizabeth

Bulelwa Msila & her mother sell vegetables in New Brighton, Port Elizabeth

As Bulelwa Msila arranges vegetables on a small vending stand on New Brighton’s busy Ferguson Road, a chilly gust of wind ushers passers-by into nearby homes. Due to Port Elizabeth’s winter weather, her mother is not braaiing (grilling) fish that day:

“Actually my mom sells fish but today it’s too cold. This is just a small business that I started with my mom, just to survive. I buy the vegetables from the fresh produce market. There is a lot of junk food that people eat, so we decided to sell vegetables because they are affordable and healthy. People buy from us because we are cheaper than supermarkets. Many come at the end of the month [after pay-day]. I also have another job but this one helps us to earn more. We use the money for our day-to-day expenses like electricity and school fees for my daughter.”

(Bulelwa Msila, Federation Income Generation Program)

Linda Mpako, who oversees FEDUPs income generation program (FIGP) in Port Elizabeth, explains that the program provides tangible access to financial assistance through small-scale loans. In particular it supports people who are not formally employed nor earn a regular income.

FEDUP’s Income Generation Program in Port Elizabeth

FEDUP has registered the FIGP as a micro-finance institution that draws its loans from FEDUPs National Urban Poor Fund (UPF). The UPF is built up through the payment of a once-off membership fee of R750 that is asked of each new FEDUP savings group member. In order to access loans in consecutive tranches, an individual needs to become part of a loan group (of 5 members), be an active saver and member of a savings group. Each province is guided by a FEDUP appointed loan facilitator like Linda, who provides support around loan group formation, loan disbursements, repayment cycles and other needs.  Read more background here.

Linda Mpako, FIGP Loan Facilitator Eastern Cape

Linda Mpako, FIGP Loan Facilitator Eastern Cape

In the Eastern Cape, the FIGP has mostly attracted people who are not yet members of FEDUP-based savings schemes.

“People are interested to find out about us because most people already have businesses but they don’t have finances to sustain them. The FIGP interest is very low – we are the best on the ground. We don’t just issue money to anyone. People need to become part of a savings scheme. The repayment is manageable when over four months you are paying back R 276,67 per month”

(Linda Mpako, Eastern Cape, Loan Facilitator)

Motherwell: Income and Strong Savings go hand in hand

Further outside Port Elizabeth, Vivian Gulwa welcomes Linda into her home in Motherwell.  She is on her third loan cycle, making a success of her beading business.

“I usually buy coffee mugs [ traditional metal mugs] in a pack of 6, decorate them with beads and sell them for R150. You will find that most people love to put them into their display units. Many of us make necklaces and traditional artwork so I had to shift and make something different. As long as you start with a small thing and have the spirit to grow, you can think of anything. I thank God for what I learnt from FEDUP: in savings groups we buy groceries in bulk. We will never go hungry in this programme, we are building each other and encouraging each other”.

(Vivian Gulwa, FEDUP member in Motherwell, Port Elizabeth)

FEDUP members showcasing the work they do under FIGP.

Vivian Gulwa (far right) showcases her beading work financed through the FIGP together with members of her savings group.

Nomsa Dyalom and Busisiwe Tekane are very recent FEDUP members.  Both are seamstresses using FIGP to become more independent in running their business:

“We are a group of 5 women in Motherwell community who make beadwork and sew clothes. We have been working in this field for 5-6 years but only came together as a loan group recently when we heard about FIGP. We are not yet members of FEDUP but we are in the pipeline. The loan group will assist us in getting additional money to make our business more successful – especially since some of us are pensioners. The loan will help us spend our money independently – we will no longer quarrel with our husbands to convince them that we want to use some of the pension money for our business.”


Nomsa Dyalom and Busisiwe Tekane

Building business strategy to build long term livelihood

In terms of business strategy Linda advises that new loan groups should use the example of people from outside South Africa. Through working together, it becomes possible to buy products and stock the spaza shop [corner shop] more cheaply. Unsurprisingly, one of the main challenges is competition: if potatoes are in season, you will find people selling potatoes in the same street – or sweets and fat cakes. Linda expresses the necessity for training so that people start checking with their community what people need. Overall, she shares:

“In my experience the FIGP is delivering what people need. It helps with unemployment and growing the FEDUP membership. We are seeing how families that have never worked can make money. Because of savings and small business, FIGP is like a survival skill. It shows when poor people use their own skills they can make money without being employed.”

(Linda Mpako, FIGP Loan Facilitator, Port Elizabeth)

Mama Nobom's small business

Mama Nobom’s small business

Mama Nobom sells handmade crafts

Mama Nobom sells handmade crafts