Kenya

Women helping women: Kenya Women Finance Trust Development Programme

Women are powerful agents of social change. They look after the nutrition and health of their family and spend more of their income than men on improving the family's well-being. They are also prudent borrowers and savers. In the early 1980s, an NGO of Kenyan professional women created a fund to enable poor rural women to take out loans, the Kenya Women Finance Trust (KWFT). Today, KWFT is the largest NGO-based microfinance institution in the country. With a portfolio of more than US$ 4.7 million, it has provided 40,000 Kenyan women with the seed money to boost income.

More than 100 professional staff run offices in 48 districts of the country. Most loans are for US$ 400 or less – enough to start a small business raising chickens or selling fish. Loans are disbursed through women's associations whose members receive training in financial management and credit. The group decides who should receive loans and agree to guarantee repayment if someone defaults.

Tausi lives in the municipality of Kilifi . A mother of two, she supplements her husband's income with earnings from a small food kiosk. But with little capital, the shop offered only the most basic items. Then she joined the Bidii women's group, completed the training and qualified for a KWFT loan. She received a first loan of 10,000 Kenyan shillings (about US$ 125) so she could expand her stock. A year later she paid it off and took out another loan to sell eggs and vegetables. Her earnings pay for the family's food costs so her husband can cover other things like school fees, medical expenses and clothing. She has also saved more than 30,000 Kenyan shillings.

Repayment rates have remained high at over 95 per cent. Eventually, KWFT wants to offer a savings programme but that is currently not possible because, as an NGO, it does not have the proper legal status to collect savings.

Lessons learned:

Remote offices reach the very poor.
The first clients were urban business women, so smaller offices were opened in remote areas to reach poorer communities. Seven years later, close to 80 per cent of clients are poor or very poor, some from villages three hours away by unpaved roads.

Microcredit creates jobs.
More than one third of KWFT clients employ at least one person — often extremely poor individuals. In this way, the programme helps the poorest of the poor, who otherwise would be hard to reach.

Poor people need to save and borrow.
Even poor people need a way to save the money they earn safely and to borrow funds to start a business. KWFT was one of the early experiences that showed BSF and IFAD how effective this intervention could be. Rural financial services are now a component in three quarters of all IFAD programmes and projects.