Lucy Njoki Mbugua

Thank you for your loan. It has been disbursed to Lucy Njoki Mbugua by People Microcredit Investment Bureau in Kenya. We are excited to watch this business grow. Over the next 9 - 15 months, People Microcredit Investment Bureau will be collecting repayments from this entrepreneur and posting progress updates on the Kiva website.

Dear Kiva lender,

As a recent Kiva blog post discussed (http://www.kiva.org/about/inside), the situation unfolding in Kenya has disrupted the day-to-day operations of many of Kiva's microfinance partners, like People Microcredit Investment Bureau (PEMCI).

Margaret Karuri, Director of PEMCI, has provided the update below for you. Due to the exceptional circumstances (including lack of reliable internet) where Margaret is working in Kenya right now, Kiva is posting this update on her behalf.

Although we realize the entire Kiva community is eager to help entrepreneurs in Kenya, it is not possible to "forgive" your loan at this time. PEMCI will be following up with each borrower one-on-one and assessing whether loan repayments can be made directly, late, or not at all. Please stay tuned in coming months, as PEMCI provides repayment updates on their clients.

Thank you,

Kiva Team

Our Esteemed Lenders,

On behalf of all our clients who have been empowered by the Kiva loans, we would like to wish you all a very happy New Year. We thank you for your commitments in supporting the work of PEMCI for the benefit of the people of Kenya. We also wish to draw your attention to the recent events that have taken place in Kenya as a result of the disputed election that took place on 27th December 2007. It all started the evening of 31st December 2007 with the announcement of the incubate Mr Mwai Kibaki as the winner of the hotly contested presidential election. Soon after, the country was hit by riotous demonstrating mobs in the all opposition strongholds including Malaba where PEMCI is located. Within an hour or so, the protests had taken an ugly turn targeting the Kikuyu people (the ethnic group of the declared winner). The unanticipated extent of violence took the community by surprise and many lost their lives. The anarchy continued through the night of 31st December 2007 into the New Year. By 1st January 2008 there was a mass exodus of persons fleeing to secure places such as churches, schools and police stations where they could be protected. PEMCI offices are located at Malaba which is a Border point into Uganda. Many of the affected families crossed the border prompting the Government of Uganda to set up a temporary refugee camp for them. The families have since been moved to a more secure camp further into Uganda under the care of the United Nations and the Red Cross. Among those affected are several PEMCI clients.

Impact on PEMCI:

In the annual cycle of business, December and January tend to be difficult month for families in Kenya, and also the months when lending institutions experience the highest level of default. These are schools holiday months in Kenya, with Christmas and New Year festivities also falling within them. 2007 was also characterized by heightened political campaigns culmination in an election on 27th December. January is the month when parents send their children back to school and are required to pay fees, buy uniforms and other school equipments. Financially parents are under a lot of pressure during this period and there is a tendency for them to default on loan repayments.

This year, the prevailing political crisis has worsened the situation. Businesses have either been destroyed or closed in fear of looters. Displaced persons are fearful of returning to their homes and businesses. Others have lost everything and have no means of jump-starting their businesses.

Many people, including a good number of PEMCI staff, are not able to move freely within the project area in fear of victimization. They are however working hard at tracking down the displaced clients to serve them with status reports, obtain inputs for Kiva journals and a commitment on future loan servicing. To mitigate the ethnic issue, PEMCI has secured premises and proposes to open an office in March within the Central Part of Kenya dominated by the Kikuyu people. Nairobi is also more cosmopolitan and a home to people from all walks of life. The Malaba office will continue to function albeit at a much lower level.

For a young MFI like PEMCI the turn of events is very disheartening and the impact of the crisis has greatly compromised our sustainability, and eroded the gains we have made in the last two and a half years we have been in operation. To that effect, we have resolved to suspend all lending operations until April 2008, hoping that by then the situation will have improved. In view of this unfortunate development we thank you for your patience. We at PEMCI remain committed to our goal of empowering the poor to lift themselves out of poverty.

Most Sincerely,

Margaret Karuri

Managing Director

PEMCI

Malaba, Kenya

Lucy is somehow reserved bussiness entreprenuer. She owns acouple of businesses exactly opposite the PEMCI offices. With the loan granted to her, she was able to top up to the money she had and purchased a matatu( Local 14 seater passenger van). She even taged it the name " Chairlady". She really impresses PEMCI by repaying her loan upfront. She appreciates the lenders and says she wouldnt like to dissapoint them. We are proud of her.

Dear Kiva Lenders:

We would like to give you an update on your loan(s) managed by Kiva’s Field Partner PEMCI in Kenya.

As you may know, the region in which entrepreneurs working with PEMCI live was severely affected by the riots and civil unrest that took place in Kenya earlier this year. Many, if not all, of PEMCI's entrepreneurs were adversely affected by this event, and currently PEMCI has a very high portfolio delinquency rate. Kiva staff have been in continual contact with PEMCI's Executive Director, Margaret Karuri, to assess the possible impact the civil disturbances may have on Kiva lender loans.

PEMCI is making every effort to work with their clients to fully understand their unique situations and how it has affected their businesses and their ability to repay their loans. However, we do expect that there may be situations where loans managed by PEMCI will go into default, as clients (i) may be unable to be located, (ii) clients' businesses may have been destroyed, and (iii) clients may have otherwise suffered such extreme losses that their debt is causing them unusual difficulties.

At this time we are providing PEMCI with what support we can, and PEMCI is encouraged knowing that they have supporters around the world in Kiva Lenders. Although we realize the entire Kiva community is eager to help entrepreneurs in Kenya, we ask that you please refrain from requesting to “forgive” your loan at this time, because PEMCI will be evaluating each entrepreneur’s status individually and we would like to cooperate with PEMCI in following the standard procedures to assess the situation. As the situation develops, PEMCI will provide additional overall updates to lenders as they can; however, we wish to convey the expectation that individual entrepreneur updates will likely be difficult to obtain.

Thank you for supporting Kiva Entrepreneurs through PEMCI.

Most Sincerely,

Kiva Staff

You may have noticed that repayments have not been coming in for quite some time. After detailed investigation by Kiva and our Field Partner, PEMCI, in Kenya, our team has determined that further repayments on your loan are highly unlikely. Therefore, these loans are now considered to be in default. To learn more, please visit:

http://www.kiva.org/about/aboutPartner?id=27

Although your loan was not repaid in full in this case, we hope you realize that over 95% of loans have been repaid in full to date on Kiva.

We hope you'll give lending to developing world entrepreneurs another chance in the future.