Microfinance for Beginners~
By Anne Hector, KF9 Kenya
When last I posted (http://tiny.cc/pl68v), I was preparing to plunge into Nairobi traffic with the redoubtable intern, Mary Chege, to visit the Kitengela branch to gather up loans and work with the lending officers on Kiva postings.
Kitengela is a small town of approximately 8000 located one hour southeast of Nairobi. Once Mary and I successfully navigated our way there, one of SMEP’s local loan officers, Winnie Mwiti, took us out for the day on her usual rounds. I had never been to a group borrower meeting and nor met a micro-finance client, so this was a big day.
Our first stop was the Ondisore Group loan meeting in the market. It was blazingly hot and the meeting was held in a small corrugated tin hut. While I was concerned about willingly stepping into an oven, it was surprisingly cool inside and a quiet business atmosphere prevailed. Borrowing groups, for those of you who don’t know, are the backbone of microfinance. A terrific innovation developed by Bangladesh’s Grameen Bank and Bolivia’s BancoSol., the group guarantees the loans of every member. What that really means is that if a member defaults on his/her loan for whatever reason, the group has to pay back the outstanding amount. As you might imagine, the group takes selection of its members very, very seriously, and in this way, the credit risk assessment normally performed by a bank is outsourced to the community.
Groups typically meet once a week, and everyone makes their payment in cash. Pictured above are Jael Ombange and Wanjiku Wangui (head of the Ondisore group) recording each and every payment by the 10 members attending. This is one serious meeting. Some joking around, but everyone is cognizant of the risks involved, and a no nonsense attitude prevails. The arrival of the Kiva mzungu (lily white me) created some stir and they all agreed to have their photos taken for the website, but then it was back to business.
We next moved on to the Kilume Wealth Creation Self Help group meeting. Vice Chairman of the group, Francis Ndungu, cordially invited us to come see his workshop. Somehow I had the impression that micro-borrowers lived at far more precarious economic levels than is the case of the SMEP clients we visited. While their lives certainly have challenges, many are established small business people and very proud of their enterprises. When asked if they minded having their pictures on the internet, they tend to look surprised, pleased and then check to see how they looked for their upcoming 15 minutes. Our Vice Chair, Francis, is a metal fabricator and upholster, and he shown here in his shop with a metal grill he created. You have got to admire that blue blazer with gold buttons and white shirt… the man looked sharp and he knew it.
Final stop was a loan interview with a tuk tuk operator from the same group. The matatus, buses, taxis and tuk tuks all gather at a depot in the center of town, and the tuk tuks tend to flock together. The three-wheel vehicles, lend themselves well to customization to attract passengers and express the true soul of the operator. Pictured left is one particularly outstanding vehicle owned by John Kimani.
All in all, a great day in the field. It turns out that Kitengela’s biggest problem posting Kiva loans is emailing the photos to headquarters. Internet connection is at dial-up speed and this has caused a complete breakdown. It all sounds so easy back in the Bay Area… but getting loans posted in remote parts of the world takes enormous dedication by the staff. We determined that flash drives send back and forth by the Wells Fargo courier will solve the issue.
For Mary and I, it is on to Thika, a colonial town NE of Nairobi. In the meantime, please consider joining Kiva if you are not already a member (http://tiny.cc/aD7N2) and funding a loan (http://tiny.cc/ZjeZQ)./>