Urwego Bank Holistic Life Improvement Training Booklet English Booklet

HOLISTIC LIFE IMPROVEMENT TRAINING

Contents

Holistic Life Improvement Training | 1

Contents Urwego Bank Holistic Life Improvement Training

1

Introduction 2 Mission, Method, and Motivation 2 Purpose of this document 2 Part One: Business Management 4

Lesson 1. Work is Godly

5

Lesson 2. Doing business properly

8

Lesson 3. Preparing your product

14

Lesson 4. Decide your pricing 19 Lesson 5. Customer care 23

Lesson 6. Dealing with uncertainties

27

Part Two: Caring for yourself and others

30

31

Lesson 7. Unity & Conflict resolution

Lesson 8. Self-management 35 Part Three: Financial Management 40 Lesson 9. Seeking finance 41 Lesson 10. Saving wisely 45

Lesson 11. Good management of resources

49

Lesson 12. Accountability and record keeping

55

Lesson 13. Planning financial goals

59

Lesson 14. Avoiding loss & calculating a budget

63

Lesson 15. Using credit in the business

69

Translation, Page layout & Printing by Bosco Kagaba on behalf of Urwego Bank Plc. Email: hbosco@gmail.com I 0788581321.

Introduction

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Introduction Mission, Method, and Motivation Urwego Bank’s mission is to provide a ladder of opportunity to underserved communities in Rwanda as we proclaim and live the Gospel of Jesus Christ.

Method: We share the hope of Christ as we provide financial services and biblically based training that restore dignity and break the cycle of poverty.

Motivation: The love of Jesus Christ motivates us to identify with those living in poverty and be His hands and feet as we strive to glorify God. Passion Passion guides our corporate culture and represents the qualities we seek and celebrate in our staff members.

Prayer On your knees, please (Psalm 95:6) Allegiance We will serve the Lord (Joshua 24:15) Service We will wash feet (John 13:14) Stewardship To whom much is given…(Luke 12: 48) Innovation We find solutions (Genesis 1: 27) Optimism Strength for today, bright hope for tomorrow (Lamentations 3: 22-24) Nurturing Love one another as I have loved you (John 13: 34)

Introduction

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Spiritual Integration Framework Who We Are To be the light and salt of the world wherever we are, at all times.

How We Work We do a good and honest work, showing the image of Christ in us.

How we serve the church We bear witness to Christ and His Kingdom through:

We live to support the church of Christ through our interactions and actions.

Purpose of this document The Holistic Life Improvement Training Manual is Urwego Bank’s official training document for entrepreneurs with small and growing business activities. This training is intended to be led by facilitators who have been trained in the content of the lessons and in training delivery. i. Who should use this Training Manual?

This training manual is to be used by certified facilitators operating for Urwego Bank or agents working on behalf of Urwego Bank or other members of the HOPE International network only. ii. How to be an effective facilitator using the facilitators’ manual •

Be well prepared and organized – read all the materials before the training.

•

Start and end sessions with good energy and enthusiasm.

•

Participants have busy lives – make sure it is always clear how the lesson will help them in their businesses and lives.

•

Speak clearly, ensuring all the participants can see and hear you, use simple, easy-to-understand language.

Introduction

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•

Write clearly and legibly on the board/flip chart, and utilize visuals at appropriate times

•

Listen to what the participants have to say and respect their views.

•

Ask questions which start with words like ‘why’, ‘what’, ‘how’ in order to encourage discussion and understand how participants are following the lesson.

•

Make examples and activities relevant to their past experiences. If you have a short story or example to help illustrate the example, feel free to share it.

•

Use group activities to liven up participants when they look tired or dull.

•

Make learning FUN and smile at your participants. This way, you will have the full attention of the group.

•

Always appreciate the participants’ contributions.

•

Conclude the sessions by asking a participant to share key points they learned

iii. Welcome and introduction •

Ensure everything is set on time.

•

Greet and welcome the participants.

•

Facilitate participants’ introductions (Be creative and introduce icebreaking activities)

•

Give the ground rules (what Urwego expects of trainees).

•

Briefly discuss the participants’ expectations of the training.

•

Give the lesson objectives.

Introduction

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Part One: Business Management Lesson 1. Work is Godly Lesson 2. Doing business properly Lesson 3. Preparing your product Lesson 4. Decide your pricing Lesson 5. Customer care Lesson 6. Dealing with uncertainties

Part One - Lesson 1

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Lesson 1: Work is Godly Anchor Scripture: •

Genesis 2:15 The Lord God took the man and placed him in the garden of Eden to work it and watch over it.

•

Galatians 6:4-5 (NLT) Pay careful attention to your own work, for then you will get the satisfaction of a job well done, and you won’t need to compare yourself to anyone else. For we are each responsible for our own conduct.

Specific training objectives: By the end of this session, participants will be able to: •

View work as part of God’s design for man

•

Communicate to others the value of working

•

Understand the reward of work

Ask the trainees to define Work. How do they view working? Is it positive or negative? Do they enjoy their work or only tolerate it?

Why do we WORK? •

We work because God designed us to work. We are designed in God’s image. God worked hard at creating the earth as shown in the scripture in Genesis – and we are created in his image to also be creative and hard working.

•

In the story of creation, God assigned work to humans before sin entered the world. He placed man in the garden to work in it. And this was not a curse! Humans are created to work.

Why should we work?

Ask the trainees to speak with one other person about what the purpose is of work. After a minute or two, ask for some examples to share with the group.

Accept all responses, then emphasize: We work for many reasons. The key reasons: 1. Work is what God gives us to earn income to provide for ourselves and our families

Part One - Lesson 1

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2. Work is a means to provide goods and services to the community, our customers, our employers 3. Working develops the capabilities God has given us What is the reward of working or consequences of not working?

•

By working, we receive many benefits:

•

*

Building confidence by investing our time and talents into hard work

*

Providing for our families

*

Having more opportunities in life.

What happens if we do not work? *

Lack of providing for ourselves or our family

*

Vulnerability to bad habits to cope with not working (addictions, dependency on others, etc.)

*

Vulnerability to making money in bad ways (immoral or illegal business, stealing from others, etc.)

ROLE PLAY: Ask the trainees to form small groups of 2-3. Have them imagine a situation when a friend or family member might criticize them for working hard or treating their work as a blessing from God. One person should pretend to be this critical friend, and another person practice explaining why work is good. Have participants recall key points together about why work is a blessing.

Key learning points •

Work is part of God’s design and was part of the initial creation, even before sin

•

Work has many benefits which one can only achieve through working

•

We can share with others the value of work, even when they criticize us for working hard.

Part One - Lesson 1

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Part One - Lesson 2

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Lesson 2. Doing business properly Anchor Scripture: •

Proverbs 14:23: All hard work brings a profit, but mere talk leads only to poverty.

•

Colossians 3:23-24: Whatever you do, work at it with all your heart, as working for the Lord, not for human masters, since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving.

Specific training objectives: By the end of this session, participants will be able to: •

Appreciate the purpose of owning business

•

Recognize the qualities of a good businessperson

•

Understand categories of business

•

Manage a business to ensure profitability

Ask the trainees to define “Business.” Do they know some businesspeople in their area? Do they consider themselves businesspeople? Are businesspeople considered good or bad? Why do they say the businessperson is good or bad?

A) What is a BUSINESS? •

An activity operated for the purpose of earning a Profit by providing a service or a product.

•

It involves a businessperson putting money, time, and hard work into the business activity

B) Categories of businesses Businesses can be categorized according to their activities as follows: •

Manufacturing / Production - Make or process raw materials into finished products. Cotton is used to produce cloths and grasses produce a mat. Raw food materials processed or cooked into ready to eat foods.

Agave sisalana are used to make baskets. These things can be sold one piece at a time or sold in bulk wholesale to a shop.

•

Service - Provide labour that does not produce a tangible product (schools,

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transport, beauty salon, childcare, domestic work) •

Retail - Selling goods directly to consumers

•

Agriculture - Growing crops or rearing livestock for sale (manure, meat, milk, and retain for the market sale

C) What are the qualities of a good business?

(Why do they say that there isn’t a businessperson who will go to heaven?)

NSENGIMANA’s RETAIL SHOP Read aloud: Nsengimana owns the biggest retail shop in town. He manages his business which has 5 employees. His employees like working for him because he is an organized man and he treats them well. Nsengimana started his business with his savings earned from farming and selling beans. The business was tiresome but Nsengimana was happy to make some small amount of money that he saved.

He sacrificed many things to start his business. He started the business by renting a small shop to sell a very limited stock. His customers have now increased; they say he is friendly and treats them with respect. He is also hard working and disciplined. Nsengimana also stocks good quality products and ensures he has all the customers need. He is also honest and gives fair prices to his customers.

“Nkurunziza, the previous shop owner was the very opposite of Nsengimana in everything, no wonder his business failed within 6 months” Says Shema, a customer who has lived in the town long enough.

Group discussion •

List the personal qualities that contribute to Nsengimana’s business success.

•

List personal qualities that contributed to Nkurunziza’s business failure.

Personal qualities that enhance success in business can be learned. Business persons need the following qualities to succeed: •

Willingness to sacrifice time and money for the sake of the business

•

Good people skills

•

A good leader

•

A good organizer

•

Can make good judgments and decisions

•

A good manager

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•

Has or is willing to gain experience

•

Committed to succeed

Businesspeople can set up a good business that has these qualities: •

It is registered with authorities

•

It pays taxes to RRA

•

It fulfils specific needs of customers

•

It is reliable – opens and closes at standard times each day

•

It cares about the environment

D) Business activities Explanation: There are 3 things that are required in business:

Buy

Transport

Sell

1. Inputs. These are the tangible things that are “put in” for the business to operate. For a shop, cash is an input, for a farm seed is an input. For a service, the equipment or supplies you need to do the service are an input.

2. Operational activities. These are the various tasks or activities that must be carried out for the business to produce results.

3. Marketing activities: These are the tasks related to promoting the business products to customers.

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E) What is Profit?

•

The amount that remains after subtracting the cost of providing the service or product (expenses) from what one gets after selling (revenue).

•

When the expenses are higher than revenue, the business makes a loss.

How can a business be profitable?

•

When the cost of producing the goods or service does not exceed the selling price

•

When a business person employs honest workers

•

When the business person manages money carefully, like: *

Saving the business income with a bank

*

Separating business income from household income

*

Keeping records

*

Planning expenses

F) To successfully manage a business, a business person must: •

Meet the customer’s need

•

Plan business activities

•

Buy the right materials at the best prices at the right time

•

Control business expenses and ensure there is money to meet business needs

•

Keep records of the business finances, stocks, and investments

•

Adapt the products or services to what is in demand

Exercise: Ask the group to name one business in the area, e.g a milk vendor’s shop. Ask them to identify the inputs, operational activities, and marketing activities involved in the business in order to make profit.

Closing activity: Ask the group to share one thing they will put into practice to improve how they do business this week. Maybe it is record keeping, asking their customers what they need, etc. Depending on the size of the group, you could have them share with the whole group or with one or two people sitting near

them.

Part One - Lesson 2

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Key learning points •

Business is an activity operated for the purpose of earning a profit by providing a service or a product

•

Business can be grouped into Manufacturing/Production, Retail, Service and Agriculture

•

Business activities include providing the inputs, operational activities, and marketing activities.

•

Profit is the amount that remains after subtracting the cost of giving the service or product from what one gets after selling.

Part One - Lesson 2

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Part One - Lesson 3

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Lesson 3. Preparing your product Anchor scripture: •

Proverbs 16:3: Commit to the LORD whatever you do, and he will establish your plans.

Specific training objectives: By the end of this session, participants will be able to: •

Recognize the factors to consider when preparing a product

•

Know the importance of value addition

•

Understand how a business interacts with actors in its network

When we are in business, we all have something we are selling. It could be a tangible product, or a service. When we are trying to sell to customers, we want to ensure that we have a quality product that customers are interested in buying.

Factors to consider as you prepare your product •

Product kinds: Is it perishable – under what conditions should it be stored? e.g. tomatoes, cabbage

•

Have you followed all the requirements – permits, certification, hygiene practices, labelling?

•

What is the full cost of production: adding labour, raw materials, transport?

•

How does it compare with your competition in quantity, quality, and price?

•

Who are your customers? What do they want?

•

What value has been added to the product?

Adding value Ushaka inka aryama nkazo - He who wants more profits works harder Adding value refers to improvement of the product/service. A value-added product or service aims at giving more satisfaction to the customers and therefore the customer is willing to pay more for it. The purpose of value addition to the business is to earn more money while improving and increasing the customer’s satisfaction. Adding value is very important step in any business since the goal is

Part One - Lesson 3

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to make the product/service worth more to the customer. (Illustrate with process of making mats from straw)

Exercise: Show the participants the illustration “from grass to basket(Agaseke)”.

Ask them to discuss what is happening in the picture by posing the following questions: # How much would you be willing to pay for the grass and why? # How much would you be willing to pay for the basket and why?

Ask them to compare the price of the straw and that of the mat, then ask “by how much did its value increase?”

Balancing the business network A business person does not just come up with a product. He/she operates within a network consisting of suppliers, financiers, customers, workers, and family who contribute to the preparation of the product in various ways. These are the other actors in the business network. (Illustrate flow of relationships between trader and supplier, workers, family, customers and financier) EXPLANATION •

The main duty of the business owner is to ensure all business activities are done as required and profit is made.

•

The process of running the business requires the business owner to relate

Part One - Lesson 3

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with other people who have a role in the success of the business.

•

These people form the BUSINESS NETWORK

ROLE PLAY Ask the participants to form groups. Taking the example of a maize seller, ask them to make a small role play that demonstrates the way the business person relates with one of the following members of his business network, and how the maize seller can add value through each of these relationships: A. Supplier B. financier C. customer D. workers E. family •

Give each group a short time to present their role play and for the class to discuss and list what comes out.

•

Take them through the list of pressure/ challenges of the businessman selected in the role plays and ask them to suggest the possible ways of managing them.

•

Have participants discuss various value addition methods to enable the maize seller to earn more money.

•

Summarize the main points raised by the roleplay at the end of the activity.

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Key learning points •

Value addition makes the product/service more satisfying for the customers and brings more income to the business

•

Business management involves managing the expectation of your business relationship partners also referred to as the business network.

Part One - Lesson 3

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Part One - Lesson 4

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Lesson 4. Decide your pricing Anchor Scripture: •

Psalms 106:3 Blessed are those who act justly, who always do what is right.

Specific training objectives: By the end of this session, participants will be

able to: •

Determine costing for product/ services

•

List considerations made while setting prices

As business people, you have to determine the price for the goods or services that you are selling. There are many things to consider when setting your prices. Let us explore some of them together.

Group Exercise – divide participants into at least two groups. Each group may choose one example.

1. Second hand shoes business A businesswoman gets second hand shoes from Kigali and sells them in her rural shopping centre.

Discuss the things she needs to consider when setting her price for a pair of shoes.

2. The Milk Vendor A vendor is buying a litre of milk at Rwf150, what should be the vendor’s selling price per litre?

Discuss some things the milk vendor must consider when setting the selling price for a litre of milk.

Direct and Indirect costs The cost of the product is the total of all of the costs related to the product/ service. The cost can be divided into two categories:

Part One - Lesson 4

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Direct Costs These are costs that are directly related to the products or services that the business makes or sells.

•

Cost of buying the products or material involved in producing the product

•

The money we pay people who work to make or sell the product

•

Transport of the materials or product

•

Any other costs needed to get the product to the customer

Indirect Costs These are all other costs for running the business, for example rent, license, security, etc.

Indirect costs are also known as overheads or fixed expenses. Overhead cost is paid whether the business is producing or not.

Calculating costs for business products – expanding the example cases 1. Second hand shoes business A business woman gets second hand shoes from Kigali and sells them in her rural shopping centre. She buys a bale of 100 second hand pairs of shoes at Rwf300,000. A bale of shoes takes one month to sell. She pays herself a monthly salary of Rwf100,000. She pays Rwf1500 to travel to the city and Rwf2500 back with a bale of shoes once a month. She sells from an open air market and pays Rwf36000 for a one year licence. Work out her cost of one pair of shoes.

Direct cost

Cost item

Cost per pair

Buying Price Travel Cost (to and from city) Woman’s monthly salary

Rwf300,000 for 100 shoes Rwf4,000 for 100 shoes Rwf100,000 for 100 shoes

Rwf3,000 Rwf40 Rwf1,000

Open air license

Rwf36,000 for a year=Rwf3,000 per month for 100 shoes

Rwf30

Total cost for one pair of shoes

Add all cost items/shoe

Rwf4,070

Indirect cost

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2. The Milk Vendor A milk vendor buys milk from the farmers in town at Rwf150 per litre. The vendor sells 100 litres milk to the customers every day. The vendor uses the services of the bicycle rider and pays Rwf2, 000 for milk collecting and delivering to the nearest bus stop. The vendor gets a bus from the stage to town and pays Rwf 500 for both milk and self. The vendor pays Rwf1, 000 to the young man who helps distribute the milk to the customers every day. After selling, the vendor catches the bus back with the empty can and paysRwf500. The vendor takes a pay of Rwf5000 per day.

Other Indirect Cost: Milk vendor’s license is Rwf45, 000 for one year. What is the vendor’s cost of milk per litre?

Direct Cost

Cost items

Cost per litre

Buying price from farmers

150/ltr for 100 ltr = 15,000

150

Bicycle rider service cost

2000 for 100 ltr = 2000

20

Transport to town

500 for vendor and 100ltr milk

5

Distribution cost

1000 for 100 litres

10

Transport back

500 for vendor and cans

5

Vendor’s salary

5000 per day for 100 litres

50

License

45,000 per year=123 per day

1.23

Total cost per litre of milk

Add all costs items / litre

241.23

Indirect cost

Key learning points When setting a price for a product one needs to consider the following: •

The total product cost (direct and indirect)

•

Competitors’ prices

•

How much customers are willing to pay – the most important element!

If you cannot get your costs low enough to set a price that customers are willing to pay, it may be time to consider other products

Total costs + Profit = Price

Part One - Lesson 4

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Part One - Lesson 5

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Lesson 5. Customer care Anchor scriptures: •

James 2:1-5: My brothers and sisters, believers in our glorious Lord Jesus Christ must not show favoritism. Suppose a man comes into your meeting wearing a gold ring and fine clothes, and a poor man in filthy old clothes also comes in. If you show special attention to the man wearing fine clothes and say, “Here’s a good seat for you,” but say to the poor man, “You stand there” or “Sit on the floor by my feet,” have you not discriminated among yourselves and become judges with evil thoughts? Listen, my dear brothers and sisters: Has not God chosen those who are poor in the eyes of the world to be rich in faith and to inherit the kingdom he promised those who love him?

Specific learning objectives: Participants will be able to: •

Identify various ways of caring for their customer

•

Apply universally accepted Do’s and Don’ts of customer service

Ask participants: What do you consider to be “customer care”?

When you satisfy your customers and give them a good experience, they often come back to buy from your shop. When we talk about customer care, we mean being considerate of customers’ needs and preferences in some of the following ways: •

Attracting customers

•

Being attentive to customers

•

Maintaining a clean and well-arranged shop

•

Transporting products to where the customers are as an after-sales service

•

Choosing attractive prices that will keep customers coming back

•

Learning and explaining the benefits of products to customers

•

Being friendly and helpful towards customers

You can remember the key aspects of providing good service by remembering your five fingers. Explain the illustration of a hand.

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•

Thumb: people/clients – respect your clients and give them attention.

•

Index finger: services/products - give clients products and services they want/need.

•

Middle finger: place and time – choose a place where you can get a big number of clients.

•

Ring Finger: price – fix a price that clients can afford to pay and you also get to gain some profits from it.

•

Pinky/Baby finger: advert/promotion – promote your business through good advertisements to use to attract more clients.

DOs Discuss: what are some good practices of customer care? Accept participant answers and emphasize these points: *

Greet; say welcome, please and thank you.

*

Say: Excuse me and I’m sorry when you fail to understand someone, when someone is in your way, or when you do something incorrectly.

*

Be friendly, smile when it’s appropriate and focus attention to your customer.

*

Inform customer of the time it takes to complete the service he/she requires.

*

Take criticism positively; thank customers for bringing complaints to your attention.

Part One - Lesson 5

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*

Follow up on customer complaints and inform them of action taken.

*

Treat customers like kings or queens;

*

Promise less and deliver more.

DON’TS Read aloud: Before Kabalisa opened her own shop, she was working for a tailor in the same town. Her boss would only speak with specific customers who were personal friends. All the other customers were sent off to the assistant tailors.

Kabalisa noticed that her boss looked bored and annoyed when customers walked in, especially those with young children. She would keep them waiting until the child began to fuss and then ask them to come back another day. Most never came back. One day a friend of the shop owner’s came and requested to have a kitenge outfit made for a wedding. She made it clear that she wanted it the next day and although Kabalisa tried to protest, her boss accepted the order and promised to have the outfit ready in less than 24 hours. While rushing to beat the deadline, the boss cut the fabric poorly and then passed it on to Kabalisa to stitch.

When the client returned, she couldn’t fit into the outfit since a lot of material had been wasted in cutting. The client raised a complaint but the boss brushed her mistake off and told her friend not to worry since she could afford to buy similar fabric. The customer left upset and disappointed. Soon word went round that the owner of the shop had mistreated her friend. This led to the closing of the shop and Kabalisa was forced to open her own shop to earn a living.

Discuss: What are some things you heard in the story that you should never do to customers? *

Ignore those who visit to your place of business.

*

Ignore or take lightly mistakes or acts of negligence, even if you think they are minor.

*

Make promises you can’t keep.

*

Keep a customer waiting

*

Look distracted, bored or unconcerned, annoyed or, worse, argue when a customer complains.

*

Neglect to follow up on customer complaints or to provide feedback on what was done.

Closing activity: Ask the participants to recall the five fingers of good customer care.

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Part One - Lesson 6

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Lesson 6. Dealing with uncertainties Anchor scripture: •

Matthew 25:1-13. Verse 13: Therefore keep watch, because you do not know the day or the hour.

Specific learning objectives: Participants will: •

Appreciate some of the uncertain events that can happen in business

•

Understand how to deal with uncertainties

•

Business trends can change suddenly for better or worse. Let us listen to this story of how uncertainties can affect the business.

Read aloud: Kalisa runs a business that deals in household goods. He has just bought 200kg of maize flour and 200kg more of cassava flour in preparation for big orders from nearby schools. She is sure business will be good for the next few days. It rains heavily one night and villagers are happy that their crops will grow.

However, when she opened the shop the following day, she found that the strong wind that came with the rain had blown the roof off her shop and the goods were all drenched in water. The flour can no longer be sold as it could cause illness.

It has to be thrown away. Kalisa is more saddened by the fact that she had taken credit from her supplier and was expecting to pay for the flour at the end of the week after she had sold it.

Discuss: What should Kalisa do?

Some causes of uncertainty in business include:

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•

Death of the business owner or a family member (illustrate with a coffin)

•

Pest or animal attack

•

Injury

•

Natural calamities like floods or landslides (illustrate with a tree falling on the roof of a building)

•

Sudden changes in the economic or political system that affect peoples’ ability to buy your goods

Traders can deal with uncertainty or misfortune by: •

Preparing for any outcomes; failure or success

•

Spreading risk; not investing too heavily in one thing or business idea

•

Taking out an insurance policy to protect the business

•

Praying and reading the word of God to seek God’s plan

•

Having a group that helps them stay accountable and grounded

•

Use past records to predict low/high periods of sales and act accordingly.

Discuss: What are some examples of preparedness that you have seen others do?

Think about your business activities. Are they spread out across more than one product or service? Do you have a plan in case your main source of income is affected? Share with one or two people near you.

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Introduction

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Part Two: Caring for yourself and others Lesson 7. Unity & Conflict resolution Lesson 8. Self-management

Part Two - Lesson 7

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Lesson 7. Unity & Conflict resolution Anchor Scripture: •

1 Corinthians 13:4-7: Love is patient, love is kind and is not jealous; love does not brag and is not arrogant, does not act unbecomingly; it does not seek its own, is not provoked, does not take into account a wrong suffered, does not rejoice in unrighteousness, but rejoices with the truth bears all things, believes all things, hopes all things, endures all things.

•

Colossians 3:12-14: Therefore, as God’s chosen people, holy and dearly loved, clothe yourselves with compassion, kindness, humility, gentleness and patience. Bear with each other and forgive one another if any of you has a grievance against someone. Forgive as the Lord forgave you. And over all these virtues put on love, which binds them all together in perfect unity.

•

Ecclesiastes 4:9 & 12: Two are better than one, because they have a good return for their labor; Though one may be overpowered, two can defend themselves. A cord of three strands is not quickly broken.

Local saying: Intambara irasenya ntiyubaka(war destroys and does not build).

Specific training objectives: By the end of this session, participants will be able to: •

Recognize causes of Conflict

•

Understand the effects of unresolved conflicts

•

Communicate the biblical context of conflict resolution

•

Resolve conflicts

What is conflict? How is it resolved?

Ask the trainees to define a conflict and conflict resolution. Have they ever had a conflict? Conclude with asking if conflicts are normal or not. Accept all answers, then emphasize: •

Any group can have conflict - family, church, neighbourhood, loan group, etc.

•

God choose to create us with differences, we handle things very differently and hence we need to take time to understand why things are done differently.

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•

To be able to resolve a conflict is to be in position to humbly understand one’s opinion about something.

•

In failure to resolve a conflict, you may invite a trusted person to intervene

•

It’s normal to have a conflict but not normal for it to stay unresolved.

What are the consequences of conflicts?

Ask the trainees some of the consequences of conflicts once unresolved.

•

Slow down development

•

Hinder prayer

•

Break relationships

•

Distort trust

Ask the trainees some of the benefits of resolving conflict •

Restored unity and trust

•

Clean conscience, peace in your heart

•

Glorifying God by living in unity with each other (Psalm 133:1)

•

Your energy and time can go to other things in life

•

You can rely on one another and go farther together

What are the causes of conflicts?

Ask the trainees to share some of the causes of conflicts.

•

Disrespect

•

Disagreement over the goal, or misunderstanding of the goal

•

Miscommunication

•

Pride and selfishness

How do you resolve conflicts?

Ask the trainees some of the methods used to resolve conflicts in their churches, communities, groups, families etc. Then, emphasize resolving conflict in this order:

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•

Prayer

•

A talk among two parties:

•

Go to the other person alone first;

•

Humbly confess your faults in the situation and make an apology (Matthew 5:23-24)

•

If it still cannot be resolved, call friends who are neutral (Matthew 18:15-16)

•

Gacaca

Ask the trainees to reflect: now that they have discussed conflict and conflict resolution, are there conflicts in their life where they owe someone an apology or may need prayer and help in resolving a conflict?

Key learning points •

Conflict is normal but we must work to resolve it.

•

Though God has created us with diverse personalities, we are called to be at peace with one another.

•

Conflict resolution is possible with humility, forgiveness, and God’s help

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Part Two - Lesson 8

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Lesson 8. Self-management Anchor scripture: •

3 John 1:2: Dear friend, I pray that you may enjoy good health and that all may go well with you, even as your soul is getting along well.

•

1 Corinthians 6:19: Do you not know that your bodies are temples of the Holy Spirit, who is in you, whom you have received from God? You are not your own.

Specific training objectives: By the end of this session, participants are able to: •

Recognize the importance of self-management, including behavioural awareness and physical awareness.

•

Take basic steps to staying healthy and preventing illness

Read aloud: Clare has a small shop where she sells baked goods. One week, she was not feeling so well, but she went to work anyway because she thought the feelings of being sick would pass quickly. While she was baking her goods, she got very hot like with a fever, and because she was not feeling well, she was distracted and burned the whole batch of bread. The oven even over heated and was damaged. She had nothing to sell because her bread was ruined. When she called her sister to come help her in the shop, her sister noticed Clare looked ill and took her home to call the doctor. The doctor brought medicine and Clare was better after 3 days. When she returned to her shop, she realized her oven was damaged and she would have to buy a new one.

What happened in this story? What was the outcome for Clare and her business when she pushed herself to work while she was very sick?

Let us talk about how self-management can help us and help our business.

What is self-management?

Management of or by oneself; taking responsibility for one’s own behavior and well-being. Failure to have self-management could lead to not being able to achieve your goals. Self-management helps us stay healthy and at peace with those around us. If you are not taking care of yourself, you can’t run your business.

We want to be able to continue working hard in our business and not be distracted from our work by preventable issues.

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Self-management includes both behavioral awareness and physical awareness. *

Behavioral awareness is knowing your stress, physically, spiritually, emotionally, your relationship with yourself, and others.

*

Physical awareness: Is about being healthy, which includes eating well, general cleanness, exercising and other health habits. Once a body is not treated well, it may attract sickness which will not allow one to work. Some

To have good behavioral awareness, consider the following areas: •

Spiritually: For human life, relationship with God is very important. Life and soul are intertwined, because the spirit is active in the living body. We want to make the spirit the leader of our lives and our actions

•

Our relationships with others in order to live with others, it is important to first live in harmony with yourself. This includes knowing how to protect your emotions (Good and bad) and then learning to accept others.

•

Responsibilities: Know your responsibilities: *

A better understanding of your work, making it easier to do it with a clear heart

*

Doing it well: When you do something about the gift you have, the work is easy, you love it, you do it without being forced to.

*

Timeliness: You are more productive when you do what you need to do on time

To have good physical awareness, consider the following areas: •

Eat well: (a balanced diet), it is good that the food is well prepared and nutritious. This prevents people from getting sick and thus having a healthy life.

•

Cleanliness: All over the body, clothing, food, at home all around us.

•

Exercise: To stay healthy, exercise is essential. it helps to have good health, mental relaxation and positive thinking

•

Vacation: Vacation helps to regain strength and makes you think positively

Health within our control Part of physical awareness is also doing our part to prevent illnesses. Let’s talk about some common health challenges and what things are in our control to keep ourselves healthy. Trainer: pick one or more the following health topics that are relevant to the group.

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A. HIV According to the Rwanda Biomedical Centre, the prevalence of HIV in Rwanda stood at 3% (3.7% for women and 2.2% for men) in 2019. It is somewhat more common in urban areas than rural areas. The country has had good success in treating HIV-related mortality due to Anti-retroviral drugs that have been proven to prolong life for persons infected with HIV. It can be transmitted through bodily fluids, so if you have close contact with bodily fluids with someone who is HIV positive, you should speak with a doctor.

B. How malaria infection occurs Malaria is spread through mosquito bite. Disease carrying mosquitoes lay eggs in stagnant water and multiply into bigger populations which get into nearby homes and bite and suck blood from people as they sleep. If the mosquito has bitten another person who has malaria, it vomits the blood into the new victim’s body and draws new blood from the new victim.

How to prevent malaria infection *

Use a mosquito net when you sleep

*

Clear the bush around your home

*

Drain stagnant water that forms a puddle near your home

*

Spray your home with insecticide

*

Close windows and doors early in the evening to prevent entry.

Statistics According to a 2017 study by the Rwanda Biomedical Centre, ownership of insecticide mosquito nets stood at 82%. This has led to reduced prevalence of malaria among the Rwandan population. It is especially important that pregnant women and children under the age of 5 sleep under a net. You can get them from doctor visits.

C. Other preventable illnesses There are other illnesses that can be prevented with good health habits. The novel coronavirus in 2020 created a global pandemic, and other respiratory illnesses can be transmitted in similar ways. To help prevent the spread of coronavirus and other illnesses:

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*

Wash hands frequently with warm water and soap, or use a disinfecting hand rub

*

If you need to sneeze or cough, use a tissue or cover your mouth with your elbow

*

If you have a fever or feel sick, stay home. If it persists, seek medical treatment.

*

Avoid gathering in very large groups when there is an illness being spread around

*

If someone else appears sick, try to stay 3 meters away from them

*

Be sure to keep bodily waste away from sources of water or food. Do not dispose of waste near sources of drinking water.

Closing: Allow participants to ask questions, and encourage them to visit a doctor when they are feeling ill.

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Introduction

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Part Three: Financial Management Lesson 9. Seeking finance Lesson 10. Saving wisely Lesson 11. Good management of resources Lesson 12. Accountability and record keeping Lesson 13. Planning financial goals Lesson 14. Avoiding loss & calculating a budget Lesson 15. Using credit in the business

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Lesson 9. Seeking finance Anchor scripture •

1 John 5:14: This is the confidence we have in approaching God: that if we ask anything according to his will, he hears us.

•

Proverbs 10:5: He who gathers crops in summer is a prudent son, but he who sleeps during harvest is a disgraceful son.

Specific learning objectives: from this lesson, the participants will be able to: •

Understanding how loans, interest, and repayment function.

•

Plan the wise use of taking and repaying a loan.

ASK Participants: In your own understanding, why should a person take a

loan?

EXPLANATION: Unless you have enough money yourself to start the business, you may need to find other sources of finances. One way is to borrow from a bank - this is known as taking a loan. A businessperson can borrow money for various reasons, among them: •

To buy inputs for the farm

•

To use as capital for the business

•

To buy more stock for his business

•

To fund a new business idea

•

To expand an existing business

•

To take care of an emergency need

Different types of Loans Ask participants what different places or ways can you borrow money?

•

Bank loan or micro-loan from a financial institution

•

Borrow from someone in your family. It is risky – many times, it creates conflicts if your family member wants to repay all at once or you struggle to repay on time.

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•

Merry-go-round groups

•

‘Borrow’ from your savings

Saving Products

Financing Products

Group Loan

Individual Loan

School Fees Loan

Agriculture Loan- Maize

Agriculture Loan - Rice

Agriculture Loan -Coffee

Agriculture Loan

After discussing these options, tell them about Urwego products and services.

Products: •

Group loans: inguzanyo z’amatsinda

•

Individual loans: inguzanyo y’umuntu ku giti ke

Part Three - Lesson 9

•

Salary loans: inguzanyo ku mushahara

•

School fees loans: inguzanyo z’abanyeshuri

•

Mortgage loans: inguzanyo zo kubaka no gusana

•

Agriculture loans: inguzanyo z’ubuhinzi

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Services: •

mHose

•

Transfers

•

Remittances

Factors to consider when taking a loan •

Family: Financial decisions should be discussed a couple or a family, especially loans or financial commitments that require repayment. Discuss it openly with family before making a commitment.

•

Interest rate

You will often have to pay back more than what you borrowed - this extra amount is called interest. This is the “cost” of the loan. Calculating the interest depends on many things, like the size of the loan, how long you have borrowed the money, how much you have already repaid, etc. A financial institution should be clear and open about the interest rate.

•

Loan Groups

To get a micro-loan, especially if you do not have adequate collateral, you must be in a group or cooperative. If anyone in the group cannot repay their loan, the others will have to repay instead. Only team up with people you trust.

•

Security

Security is a way for the lender to be sure to get the money back. This can be in the form of mandatory savings amounts or collateral or commitments you make to the loan group or cooperative.

•

Repayment

When you take a micro-loan, you must make a regular repayment depending on the terms of the loan. For many types of micro-loans, this means a payment each week following a grace period of one week. Some other loans are paid biweekly or monthly.

Part Three - Lesson 9

•

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Planning the wise use of a loan

It is important only to take a loan from an institution or group that will be honest and fair with you. Be sure to ask all the questions you have and discuss with your family before making a commitment.

It is also important to think about using the loan in a wise way. Because you have to pay interest on the loan, you should invest the loan money in things that will help you increase your income and profits. Some people may know you got a loan and ask to borrow some money. Or maybe there is a temptation to spend the money on some personal items that won’t help you increase your profits. The best thing to do when you get the loan is to invest it in your business as soon as possible. If you really need to lend someone money or purchase a personal item, do it out of your business profits instead of the loan.

Closing activity: Ask the group to share two things each that they remember to consider when taking a loan. If time allows, you could ask them to share example from their experience or that they have seen from others of how to use the loan wisely for a purpose that will increase profits.

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Part Three - Lesson 10

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Lesson 10. Saving wisely Anchor Scripture •

Proverbs 21:20 The wise store up choice food and olive oil, but fools gulp theirs down.

•

Proverbs 30:25 Ants are creatures of little strength, yet they store up their food in the summer.

Local proverbs •

Early planning for the future - Akabando k’iminsi gacibwa kare kakabikwa kure.

•

Bad days can manage to cook an elephant in a small pan - iminsi iteka inzovu mu rwabya

•

Having a fill stomach is like working in vain - ugorwa n’ubusa arara ahaze,uhima inda arayirariza

Specific learning objectives: At the end of this training, participants should be able to: •

Understand what saving is

•

Share their perspective on why it is important to save

Introduction Profit is the money that is left over after selling the product. It is the entrepreneur’s decision to decide whether to use the profit for him/herself or the household or to save it at the bank. If a business person has little profit, they may find it very difficult to keep money aside for future needs. However, saving money for future needs helps business people to improve their business and their lives.

DISCUSSION Ask: If your business makes a profit, what would you do with the money? Accept all answers. Bring out the following: •

If you have not taken any money from the business money for yourself and your household, then you will have to pay yourself first. The rest of the money can be put into savings, until you need it.

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What are savings?

To save means to keep money apart and not spending it, until the purpose you have planned to use it arises.

Ask: Why would you save money? Accept all answers, and proceed with the explanation.

1. To replace or repair old or damaged equipment and tools 2. To expand your business. For example: •

The mandazi seller is saving to buy a bigger sufuria, so that she can fry more mandazi at a time and thus sell more. In future she may want to bake cakes, so she is saving to buy an oven. Illustration: woman starting in a small shack, saving at a bank and finally opening a big shop.

•

The poultry farmer wants to save money so that she will be able to buy more chicks

•

The driver wants to save money so that he can buy his own taxi.

3. To prepare for emergency cases. For example: •

The children all need school fees at the beginning of the year

•

Your child gets sick and is admitted to the hospital

•

Your relative dies, and you have to contribute to the funeral. Illustrated by a coffin image

4. To improve your way of living. For example: •

Building a house or making improvements to your home

•

Buying a cow to produce milk for the family.

5. To be eligible or creditworthy with a bank when and if you need a loan in future.

6. To invest in a new business idea Many people find it easier to save if they have a specific goal in mind. When you are tempted to spend the money on something else, you can remember the goal and how proud you will be once you reach the goal.

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Closing activity: Ask the group to share some of the benefits they remember of having savings.

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Lesson 11. Good management of resources Anchor scripture: •

Matt 25:14-18: Again, it will be like a man going on a journey, who called his servants and entrusted his wealth to them. To one he gave five bags of gold, to another two bags, and to another one bag, each according to his ability. Then he went on his journey. The man who had received five bags of gold went at once and put his money to work and gained five bags more. So also, the one with two bags of gold gained two more. But the man who had received one bag went off, dug a hole in the ground and hid his master’s money.

Local proverb: •

Lies and lying to yourself can make us not be accountable to our money in a proper way e.g. kadahwema, kataryama which means :no sleeping and no time to lose

Specific learning objective: As a result of this session, participants will be able to: •

Look ahead and see how money will flow in and out of the business.

•

Identify some of the pitfalls that cause business failure and how to avoid them

Read aloud: Didier is a rice farmer. He earns a living from farming and selling his produce to the processors. Didier has a book where he writes all his activities on the farm. When he plants, when he applies pesticides, and when he harvests. Last season he harvested and sold his rice for Rwf3 million. He had an input loan to pay and his daughter had just been sent home for school fees. However, instead of seeing to his responsibilities, Didier boarded a coaster headed to Kigali. He booked a room in a motel in Nyabugogo and began enjoying life in the city, drinking and entertaining new friends. Soon after he had nothing left, not even bus fare to take the bus back home. He had to borrow a phone to send his wife a message.

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Part Three - Lesson 11

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Discuss: What did Didier do wrong? What should his wife do when she receives the message? What should he do differently after the next harvest? Accept all answers, then emphasize the following: •

Planning the use of money before you receive it, especially if you receive a lot of your income at one time (like with a harvest or big wholesale order)

•

The advantage of separating business income from home income. Instead of keeping all the money in one big pot, pay himself his wages so he has that money to use for his family expenses.

•

Record keeping

•

Illustrate trader taking inventory in the shop

•

Illustrate trader’s family having a good meal, while his shop is thriving

Didier may have put himself in the position of a business failure. When a business has run out of money and can’t operate, it has failed. A failure means you don’t have any choices left. For example, if you don’t have any cash or stock left, what can you do? Unless someone owes you money or you can invest more money, the business has failed.

Why do Businesses fail?

Ask participants: what are some of the reasons a business fails? Do they have examples or experiences? Most reasons have to do with running out of money because the expenses are larger than the income.

Too little Income If you can’t sell enough, your business will end up failing, because too little money is coming in. How can you avoid selling too little?

•

Choose the right business idea. If nobody needs what you are selling,

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you’re in trouble.

•

Stock the right quality of the product

•

Set the right price.

Too many Expenses (costs to the business) This happens if you have too many expenses or take too much out for the household. Your business can fail if your stock is decreasing, and you don’t realize it. (Illustrate using a hand filling a cup with water from a jug, but the cup is leaking from some holes on the sides) Examples of expenses •

Taking out too much money for the household

•

Customers who never pay back credit

•

Bad prices

•

Food which goes bad and has to be tossed out

•

Loans and supplier credit

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How can you avoid too many expenses?

•

Be careful about how much money you take out of the business.

•

Keep some records, so you know how your business is doing.

Running dry before becoming Profitable Another reason your business might fail, is if you don’t have enough money to keep it running until it starts making money. Or, if you take out more money than what you can make back in a short time.

Giving out too much Credit When you give credit to customers, there’s always a risk that you will never get the money, either because the person can’t pay, or because you forget to whom you gave goods on credit. Only give credit to customers you know and trust.

Keep Expenses smaller than Income The way to avoid failure is by making sure that expenses are never bigger than the income. Your business will be healthy when the income is big enough to support your expenses.

Closing activity: Ask the group to share in small groups some of the things to do and not to do to manage their business resources well.

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Part Three - Lesson 12

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Lesson 12. Accountability and record keeping Anchor scripture: •

Proverbs 27:23: Be sure you know the condition of your flocks, give careful attention to your herds

•

1 Corinthians 4:2: Now it is required that those who have been given a trust must prove faithful.

Specific objectives: As a result of this session, participants will be able to: •

Summarize the importance the importance of keeping business records

•

Draw and update a simple cashbook

Ask participants the following questions: •

How does money come in to your business (your income)?

•

How does money go out of your business (your expenditure)?

The best way to keep track of the income and expenditure in the business is using a cash book. What is a cash book?

A cash book is a book in which you write all the cash money that comes in and goes out of your business.

It is important to write down all the money that comes in and goes out of a business in a cash book. Keep your receipts from purchases that you make and write your own receipts for products sold by the business to help with tracking the money goes out and comes in.

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EXPLANATION: How to draw a cash book Left page = ‘Money in’ (or income)

Right page = ‘Money out’ (or expense)

1st Column = Date: the day that you 1st Column = Date: the day that you receive money pay money 2nd Column = Source of income 2nd Column = What the money was (symbol) spent on (symbol) 3rd Column = How much money

3rd Column = How much money

Activity: Practical Example of a cash book Dusenge operates an Agrovet shop. Below is the information concerning Dusenge Vet in January 2020.

Demonstrate how to record the first 5 examples in the cash book. Then, read each of the remaining examples and ask the participants to help you categorize each example one at a time. Continue with examples until the participants are more confident in how to record the cash book entries.

Jan 1: Balance brought forward from the month of December 2019 was cash Rwf50,000 and in the bank Rwf100,000.

Jan 1: He paid rent for the month of January Rwf20,000 in cash Voucher/receipt No. 1 Jan 2: Dusenge paid advance to his sale staff Neza of Rwf30,000 in cash. Voucher No. 2 Jan 2: He tick sprayed Gasasira’s cattle. He was paid Rwf200,000 in cash.

Receipt No. 1 Jan 3: Dusenge banked Rwf100,000 from the cash box to Urwego Bank. Voucher 3 Jan 4: He bought some repair materials for the shop Rwf20,000 with cash.

Voucher No. 4 Jan 5: He got a business loan from Urwego of Rwf500,000 in cheque Jan 5: He helped three cows deliver for a customer on credit to be paid next month. He charged Rwf50,000. Invoice No. 2 Jan 6: He withdrew from bank Rwf300,000 for his personal use. Voucher No. 5 Jan 7: He withdraw from bank Rwf200,000 and bought stock of vet drugs.

Voucher No. 6

Jan Rent

Staff advance

Tick spray

Urwego

Repair material

Business loan

Cow delivery

Personal use

Drug stock

2

2

3

4

5

5

6

7

Balance brought forward

Details

1

Date

Vcr 6

Vcr 5

Rct 2

Urwego

Vcr 4

Vcr 3

Rct 1

Vcr 2

Vcr 1

Ref

50,000

200,000

200,000

0

30,000

20,000

130,000

130,000

130,000

80,000

80,000

100,000 100,000

30,000

20,000

50,000

500,000

100,000

In

Balance

In

Out

Bank

CASH

200,000

300,000

Out

200,000

400,000

700,000

700,000

200,000

100,000

100,000

100,000

100,000

Balance

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Part Three - Lesson 13

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Lesson 13. Planning financial goals Anchor scripture: •

Luke 14:28: Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?

Specific learning objectives. As a result of this session, participants will be able to: •

Apply financial planning for the growth of the business.

•

Involve key stakeholders who can contribute to your financial goals.

Financial planning - Knowing how much to spend The financial plan is a way to avoid running out of money, by looking ahead. It is important to consider the various stakeholders who can help you reach your financial goals.

How to make a financial plan Begin by considering three factors •

Goal – this is wat you want to achieve

•

Task – this is what you need to do to get to the goal

•

Resources – this is what you will need to achieve the goal

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Example: Goal: Open a new market for milk vendor •

What tasks must be done?

•

What are the necessary resources?

•

Who will be responsible?

GOAL

By when

Tasks

Resources

Person responsible

Purpose of following a financial plan •

Helps figure out how much money (capital) you need to start, and keep your business running until it makes money.

•

Helps you see how much cash you will have left each week or month.

•

Help you figure out how much money you can safely take out of your business without drying out your business.

•

Help you involve the right people who can help you reach your goals.

Should you plan in months or weeks?

Planning in months is better for businesses like growing bananas or fattening animals that takes longer time. Planning in weeks might be better for businesses like shops or selling vegetables where the time between the start of the business until it’s profitable is shorter.

What to do if your financial plan shows you cannot meet this goal?

•

Reduce expenses

•

Take out less money for household use

•

Invest more of your own money

•

Take up a bigger loan from the bank

•

Increase sales by marketing the business

•

Find a new business idea to increase income

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Advantages of following a financial plan •

It will set out clearly the money that you need to put together to start the business and to run it for a period.

•

It will prevent you from going into a business that will not be a success. (illustrate with a stop sign on a plan)

•

It will point out where your business might need extra financial help, and it will help you to obtain a loan from a bank if you need it.

•

It will show when you are holding too much stock or whether your collection is less than it should be or that you will be short of cash at a particular time.

•

It will inspire confidence in lenders and banks that you may need to approach for finance.

ROLE PLAY

Ask the participants to pair with one other person or a group of 3. Give them a few minutes to identify one of their goals. What is the goal? When do they want to accomplish it? What tasks will help them accomplish it? What resources will they need? And who will be responsible for each task?

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Part Three - Lesson 14

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Lesson 14. Avoiding loss & calculating a budget Anchor scripture: •

1 Peter 5:8: Be alert and of sober mind. Your enemy the devil prowls around like a roaring lion looking for someone to devour.

Specific learning objectives: As a result of this session, participants will be able to: •

Differentiate between profit and loss

•

How loss occurs and how to mitigate

What is profit or loss?

When we talk about the profit or loss of the business, we mean how much money the business has made or lost in total on a specific transaction or for a period of time.

Loss can happen when:

How does a trader prevent loss?

a. A business manager sells his goods at a lower price than he paid for them

Buy goods when prices are low and sell when prices are high

b. Goods get spoilt in the shop and have to be disposed (illustrate with eggs not being stored properly)

Factor in the methods of storage for all the goods he sells (illustrate with egg trays)

c. If a business manager uses his business money for household needs and cannot replace it

Plan expenses wisely and only take what you can make back in a short period.

d. if thieves steal money or goods from the trader

Stay alert to the activities in the business and effectively manage the business.

e. if the trader gives credit to a cus- Avoid selling on credit. Only give credit tomer and the customer does to customers who have proven faithful. not pay for the goods f. Unavoidable circumstances like floods or accidental fires

Trust and pray every day for God to keep your business safe

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Six ways to waste money •

Amount paid as penalties due to bad payment.

•

Walking with a large amount of money which is unplanned.

•

Lending someone without a written note

•

Untrustworthy among family members where the money/properties are kept.

•

Buying unplanned items.

•

Spending money more than your actual income.

Some root causes of serious loss or poverty •

drunkenness/Adultery

•

having a big number of children you can’t manage to care for

•

War

•

ignorance

•

floods

•

Luxury- money that can’t construct a house is used for body construction.

•

Lack of self-esteem and not getting the right advice

•

long term sickness

•

lack of satisfaction and comparing yourself to others

•

use of drugs

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•

proudness

•

lack of enough knowledge on the project you want to do.

•

lack of savings.

•

trauma.

•

theft/banditry

•

not giving value to the job you do

•

laziness

•

over complaining

•

mismanagement of your finances

How to calculate profit or loss Read aloud: Byukusenge put Rwf20,000 into his shoe making business when he started, and has made Rwf10,000 in total profit since he started. He has a stock of leather that he paid Rwf30,000 for, and no cash. He now works to turn the leather he bought into nice sandals for selling, and then goes to the market.

But he can’t get a good price for his sandals that day. However, he needs money to buy food, so he has to sell them, even though the price he gets is not high. He sells all the sandals for Rwf10,000.

Ask participants: Did Byukusenge made money, or lose money? Why? EXPLANATION: Write the calculations on the flip chart to show how he made a loss.

He lost Rwf20,000 because he bought the leather for Rwf30,000, and sold the sandals for only Rwf10,000. The previous profit in the business of Rwf10,000 disappears and turns into a loss of Rwf10,000.

To find out whether you are making a profit or a loss, check the following: In what way does money go out of your business to produce your goods (or provide your service)? Consider all the things that go into the cost of your goods as mentioned in lesson 3.

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What materials do you buy;

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What services do you pay for;

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How much do you pay for wages;

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How much do you need for replacements and repair of your tools and equipment.

How much do you receive by selling the same goods (or providing the service)?

The cash book in lesson 9 will help you to remember how you have spent the money that has gone out of your business and how much money has come in from your sales.

How to calculate a simple budget Once you are calculating your profit or loss, you can add this information to the information you have in your cash book and about your expenses, to make a simple budget. A budget can help you manage your finances better and run your business better by telling you what you should expect each week or month as far as your bills, your income, and what you might have left over. It’s okay.

Let’s take the same example of a shoe business man. Let’s think of the different type of expense categories he might have in his life. Let’s think on average, for a month’s worth of expenses.

Write the example on the flip chart.

Expenses

Amount

Household/family expenses Rent/mortgage on his home

60,000

Food 80,000 Utilities

25,000

School fees

30,000

Subtotal: Household/family expenses

195,000

Business expenses Purchase of goods or supplies Salary of workers Rent of shop or stall

200,000 50,000 100,000

Taxes, fees, market charge 30,000 Transportation of goods

20,000

Payments on business loan or other loans

65,000

Subtotal: Business expenses

465,000

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Total

660,000

When we add up all the expenses, we can see the total amount of money needed for the month. Now, to see if this shoe salesman will have enough money for the month, let’s add up all his sources of income.

Income

Amount

Income from business

700,000

Any other income (other family members, or from another job)

280,000

Total

980,000

If the total income comes out to more than the expenses in the budget, then we can say that overall, the businessman is making a profit. This is the amount that he can save each month, or reinvest in his business to help it grow. If the amount he is making in income each month is less than the expenses in the budget, then he needs to either increase his income or review his budget closely to find places he can spend less money.

If you are regularly coming up short each month, you can be in the position of needing to borrow money from others or being behind on your bills. By making a budget and making sure your expenses are less than your income, you can have more control over your situation.

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Part Three - Lesson 15

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Lesson 15. Using credit in the business Anchor scripture: •

Proverbs 27:12: The prudent see danger and take refuge,but the simple keep going and pay the penalty.

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Psalms 37:21: The wicked borrow and do not repay, but the righteous give generously.

Specific learning objectives: As a result of this session, participants will be able to •

Understand what credit is, and how it affects the business.

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Recognize the difference between customer credit and supplier credits.

What is credit?

Credit can apply to a customer or to a supplier. When you allow a customer to pay later, then you have given the customer credit. The customer now owes you money to be paid later. You can also get credit from a supplier. This happens when you get some goods to stock your business but are allowed to pay later.

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Example: Giving Credit/ lending to a customer Read aloud: Nkurunziza buys some fresh beans and stocks them in his shop. A kilo cost him Rwf200. As soon as he displays the sack, Umulisa, a woman Nkurunziza knows well comes by and likes the beans very much. She is interested in buying, and after some negotiations, she agrees to pay Rwf500 per kilo for ten kilos! It’s a good deal for Nkurunziza. However, Umulisa tells him that she will only buy them if she can take the beans now and pay next week. Nkurunziza accepts, because he knows the woman and the price is good.

Ask participants: Does Nkurunziza have more cash than before? No! Did he make a profit? Yes! He made a profit of Rwf300 per kilo of beans, even though he didn’t get the cash yet. The profit is made in the moment you make the sale, because you know you’re supposed to be paid later.

Example: Getting credit from suppliers Your business can also get credit. For example, Nkurunziza might buy goods from a supplier and agree to pay later. When the business buys on credit from a supplier, it’s similar to getting a loan, except he is getting goods instead of money. Since it’s a source of value, supplier credit is considered an income, although it is not his own money, because the supplier expects to be paid back!

DISCUSSION Let participants discuss giving credit to customers and getting it from suppliers.

What are the benefits and risks? When should a trader do it and when should he avoid it? What is important to remember?

When giving out credit, there is always a risk that the trader will never get the money. For instance, he might forget that the person owes him money, or the person might move away, or not be able to pay. If that happens, the trader records a loss!

A trader must give credit only to people he/she trusts will be able to pay the money. Also the trader must always keep records of credit in their cash book, to remind them who owes money.

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Saving Products

Financing Products

Group Loan

Individual Loan

School fees loan

Agriculture Loan-Maize

Agriculture Loan-Rice

Agriculture Loan-Coffee

Agriculture Loan

Saving Products

Individual Loan

Agriculture Loan-Rice

Financing Products

School Fees Loan

Agriculture Loan-Coffee

Group Loan

Agriculture Loan-Maize

Agriculture Loan