Last week was quite eventful for me. On Thursday, 18th I visited Kayole Estate, an upgraded slum area in the Eastlands of Nairobi where I met nine women registered in a savings group by the name ‘Mukaki’ under the Kenya Women Finance Trust (KWFT). KWFT is a micro-finance institution established by Kenyan women which offers services to low-income Kenyan women only. The International Fund for Agricultural Development (IFAD), in partnership with the Belgian Survival Fund, has been KWFT’s major donor since 1992. Other donors include UNDP and the Ford Foundation.
Set with their constitution and designated officials (chairlady and treasurer), groups such as Mukaki can now access loans that are five times their total saving. In every monthly meeting, the ladies service their loans and save an extra Ksh. 1,100 (about $18).
What I found most intriguing about this particular savings group was their use of m-pesa (mobile-phone based money transfer and micro-financing service) to service loans and make deposits directly into their KWFT accounts citing insecurity issues as their main motivator for using the mode of payment. In addition, the treasurer of the group pointed out that tracing the trail of the amounts deposited and their auditing was made much easier through m-pesa as opposed to transacting with cash.
Some of members of KWFT have advanced through many loan cycles, created bigger businesses and have taken out much larger loans. However, most of the trust’s borrowers are poor women. For instance, for the Mukaki group, the highest loan taken was about $500 while the least was for about $50.
It is said that one of the keys to KWFT’s success is its very clear message that all loans must be repaid on time. If any group member has an overdue balance, all new disbursements to the group are stopped immediately. With this kind of group responsibility or liability, it’s no wonder that KWFT boasts a financial self-sufficiency ratio of over 105 per cent since 2006 – meaning that the trust is no longer overly dependent on grants to cover its financial and operating expenses.
Groups such as Mukaki enforce the group responsibility concept by using each member’s house assets as security and by all members acting as guarantors to the group loan. Each member is allowed to take an individual loan but the amount has to be vetted by the entire group and is in most cases granted on a pro-rata basis with regards to the level of savings held by the borrower.
The ability to access savings through ATMs and do mobile banking at will, has not only empowered women in places like Kayole but has also boosted their self-esteem. Women savings groups also bolster their welfare especially during tragic times such as the death of family members/bread winners or during hospitalization of their members, given that women living in poverty can barely raise the premiums required to take health insurance.
On Friday, I also attended an International Development Research Center (IDRC) Partners’ Meeting that was hosted by Akiba Mashinani Trust and got to meet with lawyers from a group known as Katiba Kenya (translated Constitution of Kenya) which is currently researching on land tenure issues in Kenya’s informal settlements. I also met with fellow researchers and professors from Nairobi University.
The highlight of my week however was the visit to Faraja Childrens’ Home – an orphanage which houses twenty seven children situated in Murang’a, Central Kenya on Saturday. I learnt and played the monopoly game and had lots of fun with the children. Although the change of scenery and the very fresh air with lots of trees was definitely welcome, I had to travel back to Nairobi the next day.