Higher impact: Kiva’s work to incubate small and growing businesses

You probably hear a lot of inspiring individual borrower stories from us, but our Higher Impact series takes you behind the scenes to catch a glimpse of the impact our Field Partners are making in their regional communities.

This installment comes from our Labs Partnerships Manager, Michelle Schenck. Below she delves into our Kiva Labs program, in collaboration with the Mastercard Foundation. Rather than financing microfinance organizations, Labs provides crowd-sourced, risk-tolerant capital to new, innovative organizations making a positive social impact in their communities. Some of these are social enterprises, nonprofit organizations or agricultural cooperatives. While considered too risky by other impact investors, Kiva works hard to foster the growth of these organizations into maturity.


Photo of Joyeuse, Jibu franchisee, by Jeremy Jue, Kiva Media Fellow

If you’re wondering what an ideal Labs partner would look like, consider Jibu in East Africa. Meaning ‘solution’ in Swahili, Jibu is a social enterprise that seeks to address two emerging market challenges: the lack of meaningful economic opportunity and affordable drinking water.

The region’s youth unemployment rate is expected to hit 30% this year, and 90% of people cannot afford safe drinking water on a daily basis. By providing financing and equipping local entrepreneurs to create access to clean drinking water, Jibu helps people create opportunities for themselves and their communities.

Jibu’s primary target market is the “middle 70%” who often cannot afford drinking water. Jibu’s affordable pricing allows this growing segment to drink exclusively safe water every day. Jibu’s Water Club also subsidizes the price to ensure their water is also affordable to the poorest bottom 20%.

Photo of Jibu water treatment system and production operator courtesy of Jibu

The organization can filter water from almost any source, whether it is contaminated tap water, a lake, a well, or a spring. Jibu locates its stores near community water sources that are closest to strategic, high population density areas and then configure a system to properly filter that water. Customers pay a bottle deposit and then exchange empty bottles for new, full bottles. Jibu is able to make a profit while keeping the cost of water low because of its distribution model, refillable bottles and lack of middleman markups.

Experienced local entrepreneurs can co-invest in a franchise with a turnkey model that includes the full suite of equipment, training and tools required to run a successful business. Jibu entrepreneurs are quickly scaling up a network of locally-owned clean water franchises in Uganda, Rwanda, and Kenya. So far there are 87 franchises that have created 600 jobs and supply clean drinking water to almost 200,000 customers.


Photo of Jeanette, franchisee, and her employees by Jeremy Jue, Kiva Media Fellow

An evolving partnership


Our partnership with Jibu shows how Kiva can grow with an organization and find new ways to best support its impact. Galen Welsch, Jibu’s founder and CEO, first reached out to me to establish a partnership with an initial $50,000 credit line in 2016. This enabled Jibu to provide its franchisees with 0% interest loans to purchase water bottle inventory.

In 2017, we expanded the partnership to include loans for delivery vehicles, which helped franchisees grow their business and client base by expanding distribution.

By early 2018 Jibu was ready to use more credit and they graduated to a $200,000 credit line.

By the end of 2018, Jibu wanted to expand into the Democratic Republic of Congo (DRC) and we worked to fundraise a Direct to Social Enterprise (DSE) loan to launch in the country.

By 2019 it was clear that Jibu could use many more DSE loans to launch franchises. We were eager to innovate with the new Labs approach, so we created a new ‘franchise launch’ loan, enabling Jibu to support more franchises faster.

Since approval 4 months ago, Jibu has raised five $23,000 loans. Jibu continues to extend all Kiva loans to franchisees without charging interest or fees.


Photo of Joyeuse's van used to distribute water by Jeremy Jue, Kiva Media Fellow

Looking forward

Jibu is now expanding into new markets outside of Uganda, Rwanda and Kenya. Scaling with a similarly decentralized franchising model, its next steps are Democratic Republic of Congo, Tanzania and Zambia. Ultimately the organization hopes to expand to over 35 countries, and there is unlimited potential for growth.

It’s important to share this story with the Kiva community to highlight the innovative financing within Kiva Labs for growing social enterprises. At Kiva we’re proud of our work with Jibu, which enables small- and growing-business support, job creation, and access to affordable drinking water. We’re excited to continue expanding our joint impact and supporting new products and models, which is possible because of the solid partnership we have formed over the years.


Photo of Laura Asherman, Kiva Media Fellow and a Jeanette, franchisee, by Jeremy Jue, Kiva Media Fellow

About the author

Michelle Schenck

As Portfolio Manager for Anglophone Africa, Michelle is responsible for oversight and expansion of Kiva's partnerships in eastern and southern Africa. Based in Nairobi, Kenya, she began working at Kiva in 2013 after completing a Kiva Fellowship in South Africa and Zambia. Michelle developed a passion for Africa right out of college as a volunteer with the Jane Goodall Institute in Uganda. She went on to conduct graduate research in Gabon with the Wildlife Conservation Society and teach African geography courses at the University of Wisconsin-Madison. Prior to Kiva, Michelle also spent four years working in financial operations and compliance at Nakoma Capital Management. She holds a Master's degree in Geography and African Studies and a Bachelor's degree in Zoology and Conservation Biology from UW-Madison.