Kiva Fellows from KF16 take on Africa!

Where might you find muzungu hunting? Where do Kenya’s elite runners hail from? And what do most borrowers in Burkina Faso use their business profits for? Kiva Fellows from KF16 bring you a unique perspective from the diverse and vast continent of Africa! We patched together an overview of each of our placement countries that includes: basic socioeconomic stats, common stereotypes (and to what extent they are true or false), greatest challenges, most common loan products at our respective field partners, and the  borrowers’ most common use of their profits.  This first post of a two-part series focuses on Kenya, Tanzania, and Burkina Faso. We hope our summaries give you a new perspective on the continent and its distinct countries that we’ve been fortunate to explore during the Kiva fellowship!

Claire Markham & Daniel Jung, Kenya

A SMEP borrower in Maua, Kenya selling beans and rice.

1. Basic country stats

% Living Below Poverty Line: 45.9% as of 2005 according to the World Bank

GDP per capita: GNI per capita as of 2010: US$790 according to the World Bank

% Women in the Workforce: Data unavailable.

% Labour participation rate for females aged 15+: 76% according to the World Bank

% Labour participation rate for males aged 15+: 88% according to the World Bank

2. Most common stereotype about Kenya?
A common stereotype is that Kenyans are excellent runners. To some extent, this is true. Of the 75 medals Kenya has won in the Olympics over time, 68 of these medals have been from athletics events.  Additionally, Kenyans have won over 70 marathon races worldwide this year. That being said, it would be inaccurate to stereotype all Kenyans as fast runners – in fact, 75% of Kenya’s elite runners come from one tribe, the Kalenjins. Some of the best runners also come from higher altitude areas of the country which contributes to their running performance.

3. Greatest challenge
The most significant recent challenge in Kenya has been “the worst drought in 60 years” resulting in enormous food shortages. Compounding the devastation caused by the most recent drought was another major challenge in Kenya, “corruption among the authorities meant to be helping the people.”

Despite these difficulties, microfinance institutions and its customers are making efforts to alleviate some of the damage of future droughts through the use of loans for water tanks and irrigation equipment. This will help to ensure that in future dry periods, there is more water to use for agricultural purposes to reduce the degree of food shortages.

4. Most common loan product at field partner, SMEP
Though SMEP offers a variety of loan products, including loans to finance businesses, green products, water products, and school fees, the most popular loan product by far is individual business loans.

5. Clients’ most common use of profits
At SMEP, there are an exceedingly large number of customers who use their loan to add stock to their retail shop where they sell cereal, fruit, flour, sugar, maize, among other items.

Lauren Barra, Tanzania

 1. Basic country stats
% Living Below Poverty Line: 36% (CIA World Factbook)

Average Annual Income: $723 (kiva.org)
% Women in the Workforce: 89% - the highest in the world! 

2. Most common stereotype about Tanzania
Before I left Mombasa, my Kenyan co-workers gave me the low-down. “Tanzanians are lazy and they speak terrible English.” Yes, the East African work ethic in general is very different from the maniac “money never sleeps” energy in NYC. Does work get accomplished at the same pace I’m used to back home? No. But I find my Tanzanian co-workers to be just as hard-working as any in Kenya and even more dedicated than many in the States. Tujijenge employees take pride in their work and will stay as late as needed to get the job done right.

As for the English? Let’s just say my Swahili is rapidly improving…

3. Greatest challenge
Muzungu hunting.

My first week in Tanzania, my FSS and I had an unfortunate run in with immigration. Three immigration officers came to my MFI, claiming they were performing security checks for Al-Shabaab. Instead, they made a B line for the two muzungus, demanded to see our passports and questioned the validity of our visas. They refused to believe I was here as a volunteer, insisting I needed to pay $200 for a Tanzania work visa. Same with my FSS – although he’s based in Nairobi and marked “business trip” on his Tanzania entry form, they threatened to take us downtown.

We considered calling the embassy – our visas were 100% legit and these guys were just looking for a bribe. Management took them into a separate room and I hear the conversation went something like this, “Maybe their visas are in order, maybe not. But it’s Friday afternoon and we can detain them over the weekend until the embassy sorts this out on Monday.” Spend the weekend in a Tanzanian jail? No thanks, rafiki.

Immigration left shortly thereafter and we haven’t heard from them since. Supposedly $400 greased their dirty palms on the way out the door. I’ll never know for sure, but that’s one welcome party I’ll never forget.

4. Most common loan product at field partner, Tujijenge Tanzania, Ltd.

Group business loans. These small businesses range from food vendors and hair salons to selling chickens and charcoal.

5. Clients’ most common use of profits
School fees. Although children attend primary school for free, families still have to pay for uniforms, testing fees and school supplies. There are also reports of children not attending school because of poorly paid teachers demanding enrollment money from them.

Allison Mooney, Burkina Faso

1. Basic country stats

% of population living below the poverty line 46.4%
GDP per capita: $1,200
% Women in the Workforce: 80%

2. Most common stereotype about Burkina Faso
That it doesn’t exist. This is false If you know enough about it to have a stereotype, you’ve probably done some real research. As far as Sahel area, most people assume the whole area is brown and dead. Although Ouaga itself doesn’t have much to offer nature-wise, the west of the country is beautiful and green!

3. Greatest challenge

Although perspectives differ on the greatest challenges facing Burkina, one that is really holding the country back is lack of education and unemployment. Only 21% of the population is literate (CIA Factbook), so there is no incentive for international corporations to come and utilize the capable workforce here. As a result, official unemployment is 77%. Although people find something to fill their time and make enough money to feed their children, moving above subsistence will require some changes to the Burkinabe education.

4. Most common loan product at field partner, Micro Start/AFD
Small business loans- selling fruit, pagnes (African cloth), etc… Most are group loans but some individual.

5. Clients’ most common use of profits
Education and health of children. Often families need to take their children out of school here because they need them to work to help feed the family. With the loans, often the parents can make enough money to support the family so children can stay in school.

Meru, Kenya (by Claire Markham)

This week on the Kiva fellows blog, start out by learning about three new microfinance products – microinsurance in Indonesia, higher education loans in the Philippines and green and water loans in Kenya. Continue on to Nepal to admire the handiwork of artisan borrowers. Make your way to Ecuador to find out more about the risk of indebtedness. Share the fellows’ personal experiences with the recent elections in Nicaragua and rush hour traffic in Uganda. Finish by taking a critical look at transparency in microfinance and Kiva’s responsibility with regards to transparency.

Microinsurance in Indonesia: What are the Options for Kiva Borrowers?
Country: Indonesia / Fellow: Laurie Young (KF16)
Laurie takes a look at Vision Fund Indonesia’s current microinsurance products.

Artisan Borrowers of BPW-Patan, Nepal
Country: Nepal / Fellow: Abhinab Basnyat (KF16)
Abhinab visits Kiva borrowers in Nepal and admires their handicraft.

Necessary “No”
Country: Ecuador / Fellow: Marcus Berkowitz (KF16)
Marcus explains why Cooperativa San Jose must say “no” to some borrowers who risk over-indebtedness.

Team Kiva: World Police?
Country: Tanzania / Fellow: Lauren Barra (KF16)
Lauren explores whether Kiva has a responsibility to promote microfinance transparency and what Kiva must do to meet this responsibility.

Red and Black to Pink, Peace and Love: The Reign of Daniel
Country: Nicaragua / Fellow: Jim Burke (KF16)
Jim shines some light on the results of the recent elections in Nicaragua.

Study Now, Pay Now: Funding Higher Education in the Philippines
Country: Philippines / Fellow: Jill Hall (KF16)
Jill answers questions about higher education loan products in the Philippines.

The Kampala Commute
Country: Uganda / Fellow: Andrew Huelsenbeck (KF16)
Andrew shares his experience getting around the Ugandan capital during rush hour.

Going Green? Overcoming Cultural Barriers to Promote Green Loans (Part 2)
Country: Kenya / Fellow: Claire Markham (KF16)
Claire attempts to answer the question of how an MFI can break through cultural barriers to implement a successful green and water loan program.

~
Updates from the past month:
Earthquakes, 5Ks + The Pain of Sickness and Loss
Expanding the Reach of Microfinance, Downsizing Development + Why We Kiva
Green Loans, Dark Alleys + On-the-Ground Footage of it All
Kiva-style Microfinance, Reggaeton + a Journey though the Commercial Jungle
Loan Use, Agriculture Loans + Stuff Kiva Fellows Like
~

Plus more pictures from the past week:

Indonesia (by Laurie Young)

Nepal (by Abhinab Basnyat)

Ecuador (by Marcus Berkowitz)

Tanzania (by Lauren Barra)

Nicaragua (by Jim Burke)

Philippines (by Jill Hall)

Kenya (by Claire Markham)

In Kenya, the act of going green appears to be far less of a priority than it is in more developed green economies. In the first part of this blog series, I discussed the cultural barriers that exist in Kenya. In this second part, I attempt to answer the question of how an MFI can break through the obstacles identified in Part 1 to implement a successful green and water loan program. I certainly don’t have all of the answers, but I will describe certain strategies that can be used.

Frame of Reference: Me vs. we, now vs. later

First and foremost, it is important to frame the benefits in a way people will be able to personalize. In countries that have already developed a green economy, many people are willing to pay extra to use an environmentally friendly product or service for a variety of reasons, including:

1) It feels good to do our part by reducing our environmental footprint;

2) There is an awareness of the consequences of ignoring our impact on the environment; and

3) It might actually save money in the long run (as is the case with solar panels, eco-friendly light bulbs, and other products).

In Kenya, the key to convincing borrowers to go green is to demonstrate how a solar or water loan can result in tangible benefits to the borrower in the very near term, whether through direct financial savings, access to energy or water that wasn’t available previously, or improved sanitary conditions. Focusing on the benefits that lie in the distant future is not as likely to have as strong of an impact.

Serving clients that don’t have access to electricity or water

An obvious solution is to focus on clients in rural areas who do not have access to the electricity grid or a clean water source. These clients would be able to derive huge benefits in the form of increased convenience, agricultural business innovations, and ensuring health and safety for one’s family.

Increased convenience

Customers who do not have access to the electricity or clean water often must go to quite inconvenient measures to obtain alternatives, whether this means traveling far to collect water from the river, taking time to gather firewood, among many others. They would be able to save considerable time and energy from having access to a loan to purchase solar panels to power their home or a water tank to collect potable rainwater. This time can be used in more productive ways such as working at their business to generate additional revenue.

Agricultural business innovations

In rural areas, there are many customers whose primary business is agricultural. In periods of drought, using water tanks or irrigation equipment would be hugely beneficial to ensure that the crops can continue to grow and provide income for the farmers. Additionally, there are innovations such as biogas facilities that turn cow manure into renewable energy for the farmers’ homes and fertilizer for the farmers’ crops, in addition to being great for the environment.

A farmer and his biogas facility

Ensuring health and safety for one’s family

Many low-income individuals in rural areas use kerosene or firewood to light and heat their house. Kerosene emits toxic fumes, and the burning of both kerosene and firewood increase the risk of setting fire to their homes. These people may also often obtain water from potentially contaminated sources. By reducing the risk of toxic fumes, possible fire damage, or water contamination through the use of a green or water loan, the borrower can improve the safety and health of both themselves and their family.

In one of the villages I visited, the clients had previously walked 2 km to the nearest river to obtain water. This water is not clean and these clients are putting themselves and their families at risk of disease and illnesses.  Unfortunately, they do not have many other options. One customer used to purchase water from someone in their community but it was very expensive.

The potential difficulty in serving clients that don’t have access to electricity or water is affordability – clients who really need the loans might not be able to afford them. Some clients aren’t incurring any savings through their reduced use in energy because they never had electricity to begin with; they have previously been collecting firewood from around their house which has no cost, or using paraffin lanterns which have a very minimal cost. The key for many MFIs, from a risk mitigation stand point, is targeting clients who already have an established business through which the borrower could use the income to pay to service the loan.

In arid areas such as near Meru, clean water is hard to come by

Educating clients that already have access to electricity and water

Most potential clients in urban centres already have access to the electricity grid and a clean water source. These clients are more difficult to convince to go green through the use of a solar or water loan, but this is by no means impossible. Through education on personal expenditure savings, potential business opportunities, improved health and safety, and increased reliability, urban clients can be persuaded.

Personal Expenditure Savings

To power their homes, clients will pay for electricity, kerosene, gas, or paraffin lanterns. Each of these sources has costs associated with them and clients would be able to save money by switching to a renewable energy source.

Even if clean water is more accessible in urban regions, it comes at a cost. Customers would derive savings from a conveniently located water tank that has no incremental cost to consume the water it provides.

Potential Business Opportunities

In addition to powering one’s home or providing clean water for one’s family, business opportunities exist from solar panels or water tanks. With a solar panel, clients can earn fees through allowing others to charge their cell phones with the energy derived from the solar panel. With a water tank, clients can sell clean water at a reasonable price to those in their community who would otherwise need to pay large fees at stores for access to clean water.

The clean water can also be used to enhance the customer’s existing business. I met with one client who uses his water tank for his restaurant business so that he can still wash dishes and clean the restaurant during periods of drought.

Improved health and safety

Even though clients in urban areas likely have access to electricity or clean water, it is not free and many low-income individuals resort to the same measures as clients who do not have access at all. These clients might elect to use kerosene, firewood and water from potentially unclean sources to save money.  This results in the same risks as discussed above.

Increased Reliability

Throughout Kenya, power outages are exceedingly common and often take place several times a week, sometimes for hours at a time. In such circumstances, clients in urban centers can benefit from the use of solar panels as a backup alternative. Once clients already have the solar panel in their home as an alternative to electricity, they may be more inclined to use it even in times where there are no power outages because there is no additional cost to its use once the upfront investment has already been made.

A happy group of borrowers posing with one of the many water tanks the group members have purchased through loans

Educating loan officers

In order for clients to decide to use these loan products, they need to first be aware of the benefits that exist. A select few may hear about green or water loans from others in their community, but a much more effective way to disseminate this information is through the SMEP representatives that they meet on a weekly or monthly basis: loan officers. However, many loan officers are unaware of the extensive benefits that exist. In order for a successful green and water loan program to be implemented, all loan officers need to receive sufficient training so that they are well informed and able to explain to both urban and rural customers all of the benefits.

Hope for the future

Though there are a wide range of products offered by suppliers, most of the clients I interviewed had purchased water tanks for $160-190 and solar panels for $25-100. For low-income individuals, this is certainly a sizeable investment, but the message I consistently received from these customers was that they found the investment to be incredibly worthwhile for many of the reasons discussed above.  Many of these customers had even taken out 2^nd or 3^rd loans to purchase additional green products because they were so happy with the results.

There is huge potential for green and water microfinance loans in Kenya; there is an undeniable need for the products from borrowers, and a strong desire to sell the products by microfinance institutions. With a continual focus on marketing these products, training and education for both loan officers and clients, I am confident that the MFIs in Kenya will be able to successfully capture this potential demand and pave the way for a greener Kenya.

A borrower who took out microfinance loans to purchase a water tank and greenhouse

Claire Markham is part of KF16, serving with SMEP Deposit Taking Microfinance Limited (SMEP) in Nairobi, Kenya. To lend to SMEP’s borrowers, become part of the SMEP lending team.

Last month I had the privilege of attending the African Microfinance Pricing Transparency Leadership Forum in Nairobi. Hosted by MicroFinance Transparency, the conference gathered policymakers and regulators to exchange ideas about client protection and pricing disclosure in microfinance. Attendees included representatives from over 20 nations in East, West and Southern Africa.

African Microfinance Pricing Transparency Leadership Forum, courtesy of MFT's Joseph Kiirya

What does “transparency” entail? Transparency represents an organization’s commitment to communicate price from the client’s perspective. It is a means to an end – we cannot build a healthy microfinance industry without transparency. As we’ve seen with SKS in India, the industry risks immediate backlash if consumers and investors no longer trust microfinance institutions. Clever marketing and hidden interest rates or fees make it difficult for clients to make educated choices. Without accurate data, regulators are essentially navigating in the dark, forced to make decisions without context. Transparency is the strongest tool available for improving these market imperfections.

Microfinance is rapidly expanding and MFIs often face pressures to dilute their social mission in pursuit of competitiveness.  The danger lies in that it’s easier to hide prices than face tough choices about efficiency. Over the course of three days, conference participants debated big questions that will determine the future of the Africa’s microfinance industry. For example:

• Who is responsible for promoting transparency? Government regulators? Donors and investors?
• When, if ever, is it appropriate to cap profits and interest rates?
• How do we prevent over-indebtedness?

As the group wrestled with these questions, we walked through examples of microfinance rates and regulations around the world. For example, Kenya has no transparency regulation and as a result there’s tremendous variability in their pricing (see graph below). Kenya also has two separate regulatory agencies for deposit-taking MFIs –  the Central Bank of Kenya and SACCO Societies Regulatory Authority (SASRA). This system presents challenges with aligning policies and enforcements, unfortunately resulting in deceitful institutions slipping through the cracks.

Kenya Microfinance Interest Rata Data, provided by Microfinance Transparency

The Philippines’ Truth in Lending Act requires the conspicuous display of fees, interest rates, and the total cost of credit at branch offices. In Bosnia, all MFIs must use the same repayment schedule template – providing borrowers with a simple apples-to-apples comparison between microfinance institutions and products. Cambodia made the flat interest rate, a deceptively simple calculation, illegal in 2001. According to Cambodian Microfinance Association, effective interest rates have declined from 10% to 3–3.5% per month, due in part to the change in calculation method from flat rate to declining balance. The results are also evident in the interest rate curve seen below, with prices moving predictably and consistently in accordance with loan size.

Cambodia Microfinance Interest Rata Data, provided by Microfinance Transparency

Implementing similar client protection principles in Africa sparked a heated debate among participants. Is it better for governments to define one formula for calculating interest rates? Or publish reports on actual prices and let market forces decide? Although their views varied greatly, these policymakers and consumer advocates could all agree on one point. Regulators should not be fully responsible for promoting transparency – donors and investors must also play an active role.

—

With $255MM disbursed to over 600,000 borrowers, Kiva is one of the largest microfinance donors in the world. So what should Kiva’s role be in promoting a healthy, transparent microfinance industry? Two questions arise:

1. Does Kiva have a responsibility to promote microfinance transparency?
2. What must Kiva do to meet this responsibility?

I believe the answer to the first question is a definitive “yes.” Kiva already acknowledges some measure of responsibility for accurate reporting from Field Partners. Client Waivers must be signed by each Kiva borrower and presented during the annual Borrower Verification. As I discussed in an earlier post, Kiva assigns “transparency” as a key criterion in their evaluation of Field Partner risk ratings. Partners which don’t follow Kiva’s guidelines face rating downgrades and in the case of fraud, are completely cut off from funds.

Interviewing borrowers in Dar es Salaam, Tanzania

The second question is much trickier to answer. Obviously fraudulent and corrupt institutions should be banned from Kiva’s platform. But what about institutions that charge higher than average interest rates? Or MFIs that are undergoing a noticeable mission drift? Kiva is now taking steps to identify these problem areas at its Field Partners. In addition to a Social Performance Audit, certain Kiva Fellows will perform a pilot survey of Client Protection Principles (CPP). Developed by the SMART Campaign, CPP are a set of standards that clients should expect to receive when doing business with a microfinance institution. They ensure that clients’ needs are being addressed throughout the loan process and that an MFI is “doing no harm.”

While this effort is commendable the real question is – what will Kiva do with this information? In theory, the CPP will “eventually enhance the Borrower Verification with additional elements to better understand the relationship between the MFI and their client and to highlight areas of improvement in their commitment to client protection.” But is “highlighting areas of improvement” really enough? Kiva’s reputation and financial standing puts it in a unique position to influence microfinance transparency and client protection. When Kiva talks, MFIs, investors and policy-makers listen. Shouldn’t Kiva use this position to make swift, decisive changes at its Field Partners in order to protect microfinance borrowers?

I’m not advocating that Kiva should be a watchdog agency for nearly 150 MFIs in 60 countries. But I do believe the title of “game-changer” compels Kiva to a higher standard of responsibility. This means clearly defined standards for client protection and cost of credit, consistent evaluation of Field Partners, and real consequences for organizations that fall short of these expectations. The potential for decreased fundraising limits, rating downgrades or even a “CPP Certified” label would all incentivize Field Partners to implement CPP standards as swiftly as possible.

With great power comes great responsibility and in this case, Kiva is more than capable of rising to the occasion.

Lauren Barra is serving as a Kiva Fellow with Yehu Microfinance Trust in Mombasa, Kenya and Tujijenge Tanzania in Dar es Salaam.

Kiva Fellows in East Africa

This week, you have no fewer than 14 new articles to choose from on the Kiva fellows blog: Let the fellows take you along on borrower visits across the world. Learn how Kiva field partners expand the reach of microfinance in Rwanda, fill the microfinance donut hole in Sierra Leone and improve social performance in Uganda. Find out what poverty is like in urban Tajikistan and rural Burkina Faso. Get inspired by one of the creative ways to bring renewable energy to the developing world in the form of a soccer ball. And finally, watch a video of “Why We Kiva” to get a glimpse of why Kiva fellows jump at the opportunity to be thrown half way around the world to work with Kiva’s many local field partners.

Girlie’s Peanut Butter: Borrower Verification in the Philippines
Country: Philippines / Fellow: Jill Hall (KF16)
As Jill completes here borrower verifications, she meets the lady who makes peanut butter.

Going the Distance: Expanding the Reach of Microfinance in Rwanda
Country: Rwanda / Fellow: Whitney Webb (KF16)
Whitney takes a look at the creative ways Urwego Opportunity Bank uses to reach the far-flung areas of Rwanda.

The Donut Hole Conundrum + Mamoud’s Story
Country: Sierra Leone / Fellow: Tejal Desai (KF16)
Tejal learns about the small enterprise loan, a loan product that is targeted at people that are financially overqualified for microcredit but too poor to receive a bank loan.

In Sickness and in Health: An MFI’s commitment to its clients in times of need
Country: El Salvador / Fellow: Andrea Ramirez (KF16)
Andrea explains how Fundacion Campo came up with a plan to help residents in areas flooded by the recent rain falls in El Salvador.

Pride & Poverty: A Photo Essay of Kiva Borrowers in Georgia
Country: Georgia / Fellow: DJ Forza (KF16)
DJ shares impressions of her borrower visits in Georgia.

More Than a Simple Find/Replace Operation: Changing CREDIT to Kredit
Country: Cambodia / Fellow: Dave Weber (KF16)
Dave explores why CREDIT is undergoing a name and logo change.

Downsizing Development: How a Soccer Ball Could Change the World
Country: Kenya / Fellow: Lauren Barra (KF16)
Lauren comes across a soccer ball that might help bring renewable energy to the developing world.

Microfinance by Land or by Sea
Country: Peru / Fellow: Kate Bennett (KF16)
Kate spends a week at the beach, but instead of working on her tan, she visits borrowers with Kiva field partner Caja Rural Señor de Luren.

This Is Urban Poverty in Tajikistan
Country: Tajikistan / Fellow: Chris Paci (KF16)
Chris experiences first-hand what urban poverty is like in Tajikistan.

The Second Bottom Line and BRAC Uganda’s Gold
Country: Uganda / Fellow: Andrew Huelsenbeck (KF16)
Andrew takes a look at BRAC Uganda’s dedication to social performance.

Mysteries, Geoglyphs + too-good-to-be-true Kiva Borrowers
Country: Peru / Fellow: Kate Bennett (KF16)
Kate wonders if a full loan repayment on the first repayment date might be too good to be true.

La Réalité de L’Afrique
Country: Burkina Faso / Fellow: Alison Moomey (KF16)
Alison gets a wake-up call to the realities of life in rural Burkina Faso after spending a weekend in a village without electricity or running water.

Video Blog: “Why We Kiva” – Kiva Fellows Around the World
Country: Bolivia / Fellow: Mariela Cedeño (KF16)
Mariela gives you a glimpse of why Kiva fellows jump at the opportunity to be thrown half way around the world to work with Kiva’s many local field partners.

~
Updates from the past month:
Green Loans, Dark Alleys + On-the-Ground Footage of it All
Kiva-style Microfinance, Reggaeton + a Journey though the Commercial Jungle
Loan Use, Agriculture Loans + Stuff Kiva Fellows Like
Starting Capital, Development Levels + Adventurous Borrower Visits
Going Pilot to Active, Meeting Borrowers + Technology and Social Performance
~

Plus more pictures from the past week:

Philippines (by Jill Hall)

Rwanda (by Whitney Webb)

Sierra Leone (by Tejal Desai)

El Salvador (by Andrea Ramirez)

Georgia (by DJ Forza)

Kenya (by Lauren Barra)

Peru (by Kate Bennett)

Tajikistan (by Chris Paci)

Peru (by Kate Bennett)

Burkina Faso (by Allison Moomey)

What’s the biggest killer in Kenya? It’s not what you think. One disease is responsible for more deaths than HIV, malaria and measles COMBINED. Diarrhea. That’s right, a troubling inconvenience in the states, diarrhea is a deadly menace in Africa. While victims don’t die from diarrhea directly, the severe dehydration and electrolyte imbalances it causes can be lethal. The most effective way to combat this preventable loss of life is also the simplest – wash your hands.

Only 1 in 10 Kenyan children wash their hands before each meal. Educating children and parents about this easy precaution could potentially save hundreds, if not thousands of lives. A successful education campaign may accomplish more than the billions poured into AIDS research and other high-profile development aid at a fraction of the cost.

So why is traditional development aid still focused on large-scale, sweeping reforms? In Building Social Business, Nobel Prize winner Dr. Muhammad Yunus explains,

Most of us are very impatient by nature. We want to fix things quickly. It’s especially true with huge, global problems that have burdened humankind for centuries: poverty, disease, hunger, homelessness, oppression …But for practical reasons its sometimes better to reduce a problem to a manageable size rather than trying to fix it all at once. Giant plans designed to help millions of people often get out of control. Unless we prepare step-by-step, “thinking big” can be a recipe for disaster.

As several of my colleagues have outlined here, here and here the power of simplicity is particularly evident in microfinance. These borrowers’ success makes me wonder – how else can “thinking small” translate to big changes in international development?

—

Playing soccer on the beaches of Mombasa

A few weeks ago I got my answer. My roommate Amy emailed with exciting news – “I got the internship!!” After weeks of cover letters, interviews, and language proficiency tests, Amy secured a marketing internship with sOccket, an innovative new social business focused on bringing renewable energy to the developing world. As one reporter noted,

Every great once in a while, you come across something that makes you slap your head and say, “That’s…just…brilliant.”

sOccket is a soccer ball that captures and stores energy during normal game play to be used to later charge batteries and LEDs in developing countries. Invented by four women from Harvard, sOccket attempts to address the compelling energy needs of 1.5 billion people living without electricity. Every 15 minutes of play with the ball generates enough power to light up an LED lamp for 3 hours. This simple concept is picking up speed and was recently highlighted by the Clinton Global Initiative.

Football club in Swahili village

Whether you’re traveling in Europe, South America, or Africa one theme is consistent – people are obsessed with soccer. In Mombasa, children play with soccer balls made from dozens of plastic grocery bags. You can’t walk along the beach without someone passing you a ball and inviting you to join their game. Even remote Swahili villages proudly boast their own “football clubs.” sOccket taps into this global enthusiasm and at the right price, it should easily find a large customer base.

But can this really work? Will sOccket actually create substantial changes in the developing world? In a New York Times interview sOccket co-founder Jessica Lin responds,

We’ve received some comments about how this ball isn’t going to solve the energy problems of the developing world. And, of course, we realize that. We are trying to make a bigger statement about energy needs. Even if our project just starts people thinking about different ways to bring energy access to places like Africa, that’s really important.

The importance of “thinking small” certainly isn’t a new concept, but it’s gaining momentum in the international development community. Kiva, sOccket, Grameen Bank…each of these organizations is playing a much larger role in redefining the world’s approach to development aid. Downsizing our efforts won’t change the world over night. But in time, its collective impact could be greater than we ever imagined.

Want to start making a difference today? Click here to make a loan!

Lauren Barra is serving as a Kiva Fellow with Yehu Microfinance Trust in Mombasa, Kenya and Tujijenge Tanzania in Dar es Salaam.

Want a fresh look at Kiva clients on-the-ground? This week fellows share stories and mixed-media that bring us directly into the cities, homes and pulperías of borrowers. From the marketplace in Bolivia, to the streets of Guayaquil, to the dumps of Kenya, we learn about the challenges of working in developing countries and the strategies loan officers and Fellows can use to mitigate them. Not to mention we can see the work of Kiva fellows and Kiva Field Partners in Cambodia, Honduras and Bolivia in living color. What’s even better than reading a post by a Kiva Fellow? Seeing what we see in the field for yourself!

Making Room for Charity: Gift Giving to the Poorest Clients at CREDIT
Country: Cambodia / Fellow: Dave Weber, KF16

Dave gives us a rare on-the-ground glimpse (and video!) of Kiva Field Partner CREDIT World Relief’s unique Vulnerable Services Unit (VSU) gifts program, which works to support CREDIT’s highest-needs clients with critical household and other items.

What’s Easier Than Getting Robbed in Guayaquil?
Country: Ecuador / Fellow: Emmanuel M. von Arx, KF16

Guayaquil, Ecuador is not a city known for safety. But though Emmanuel, Banco D-Miro loan officers, and even (and often) Kiva clients have been victims of crime in Guayaquil, Emmanuel reminds us that there are still those in the city trying to grow. So what’s easier than getting robbed in Guayaquil? Lending to a client in Guayaquil, and laying a foundation for a less dangerous and less vulnerable future.

Video Blog: ODEF’s First Kiva Borrower
Country: Honduras / Fellow: Sandra Pina, KF16

If you’re a new lender, you might not be familiar with the Kiva borrower profile posting process. But even if you’re an old lender, you’re definitely not familar with ODEF Financiera, S.A.’s borrower profile posting process. Sandra’s video blog brings us along as Kiva’s newest Honduran Field Partner posts its very first loan on Kiva.

Going Green? Overcoming Cultural Barriers to Promote Green Loans (Part 1)
Country: Kenya / Fellow: Claire Markham, KF16

Sustainable environmental management is not often high on the list of Kiva clients’ priorities. Nor is it much of a concern in many of the places around the world where Kiva works. But why? In Part 1 of her discussion of overcoming cultural barriers to promote green loans, Claire explains the obstacles standing in the way of green loans.

Loans Available Here ->
Country: Bolivia / Fellow: Mariela Cedeño, KF16

Microfinance institutions provide entrepreneurs with the tools to start their own micro-enterprises. The trick, however, is expanding access to those that most need it, and letting these clients know it’s available. Mariela describes the strategies that Kiva Field Partner CIDRE employs to reach out to its clients, and shares a video from on-the-ground outreach in the marketplace!

*      *       *

Kiva-style Microfinance, Reggaeton + a Journey though the Commercial Jungle
Loan Use, Agriculture Loans + Stuff Kiva Fellows Like
Starting Capital, Development Levels + Adventurous Borrower Visits
Going Pilot to Active, Meeting Borrowers + Technology and Social Performance
Costs of Kiva, Donkey Shares + the Law of Diminishing Marginal Returns

*      *       *

Plus more on-the-ground videos from the past week:

CREDIT Microfinance Institution VSU Program Gift Giving: Takeo Province, Cambodia from David Weber on Vimeo.

In the developed world, the recent increased attention to global warming and the importance of environmental preservation and restoration efforts is something that’s hard to ignore.  It’s because of this ongoing Environmental Revolution that the majority of the population is aware of the increasing need to pay attention to our footprint. Regardless of whether or not people actually do their part or even believe in global warming, most people have at least been educated of the potential consequences of neglecting the environment and the harm we are causing both in the present and for future generations.

In Kenya, I have found this is not necessarily the case in my experiences so far.  This realization becomes abundantly clear to me as I sit in traffic worse than anything I’ve encountered before and watch as passengers in my matatu nonchalantly throw their trash out the window, despite the stench of the burning garbage piles next to the road already permeating the vehicle. I am not saying this is true across the country for all Kenyans but am basing these observations solely on my experiences thus far from living in Nairobi and travels to several other urban and rural areas.

One of my tasks at SMEP is to help grow their green and water loan program. When I realized the cultural barriers to going green, I appreciated the enormous challenges that would lie ahead of me. When the borrowers that we work with so often have to worry about ensuring there is enough food on the table or money for school fees, adding the responsibility of being conscious of their environmental impact can be a hard notion to sell. How can an MFI break through these obstacles and implement a successful green and water loan program when so much of the population, including our borrowers, aren’t environmentally aware?

This two-part blog post will attempt to answer this question. In this first part, I identify what the barriers are. In the second part, I will elaborate on the strategies that can be used to overcome these obstacles.

Typical Nairobi traffic on my way to work

What are the barriers?

There are a wide variety of reasons that going green is a foreign concept in Kenya:  lack of environmental education, inadequate waste collection, shorter time frame of decisions, and the side effects on the well educated, higher income population.  This is by no means a comprehensive list, but rather what I have been able to observe in my experiences in Kenya thus far.

When asked about whether Kenyans are aware of their impact on the environment, one of my colleagues responded, “People with lower to middle income levels are not aware of their impact. Everyone else knows but just doesn’t care.”  I will first focus on the enormous group of people who do not know about their impact and the challenges they face.

Lack of environmental education

In the developed world, children are educated about the environment from a young age. They are subject to repeat reinforcement of this message through means such as Earth Day.  In Kenya, these educational programs are simply not in place to inform children about such matters.  Children see their parents and friends act in a certain way and they follow; this serves as a repeat reminder to them that littering and polluting are acceptable. Without educational programs to inform them otherwise, how are they supposed to know to act differently?

Inadequate waste collection

Littering is considered to be an acceptable practice in Kenya. It is exceedingly common to see people throw their garbage on the street without hesitation. I think this is in part a result of the waste collection system; it is not a free service and if you would like somebody to pick up the garbage from your home, you are going to have to pay. In the slums, where disposable income is scarce, the residents simply cannot afford to pay someone to collect their garbage. Their only other option is to throw their garbage on the streets, and when the pile grows too large, they burn it.

Differences in time frame

In a country that struggles with famine, poverty and unemployment, the time frame of decisions become much shorter. The difficulty with environmental degradation is that many of its effects are often not immediate. One of the main selling points of caring for the environment is being able to ensure that future generations are able to enjoy the same beauty and cleanliness of the earth as we have been fortunate enough to experience. One of the motivations comes from knowing that our great grandchildren will benefit from our efforts now.

In the areas of Kenya which are devastated by poverty, such a long term time horizon does not exist. When concerns over whether someone will actually be able to provide food for their children that week are prominent, providing a clean environment for their great grandchildren becomes less of a focus.

There are certainly also immediate effects of environment neglect including a shortage of potable water due to a lack of proper waste management.  The lack of access to clean water can in itself cause a variety of illnesses.  Additionally, the conditions of many that live in polluted environments are at a heightened risk of diseases spreading more rapidly throughout the community. The difficulty here links back to one of the previously discussed barriers: lack of education. Many people are not aware that the challenges they face now with disease and poor water quality is in fact related to their own current actions.  Another reason the immediate effects are ignored is lack of proper infrastructure and waste management as mentioned above.

Side effects on the educated higher income population

The preceding three points are issues facing people in the lower to middle income segments of the population. What about the well-educated, higher-income individuals who do know about their impact on the environment but choose not to act on it? One of the reasons they often fail to change their behaviours is because there is very limited negative stigma attached to acting in a non-environmentally friendly manner.   It takes the contributions of everyone in society to make an impact; it is discouraging to make an effort towards a goal and look around and see rarely anyone else doing their part. What can be done to motivate all individuals to take their impact on the environment into consideration?

As you can see, there are significant obstacles to implementing a green and water loan program. However, this is not an impossible task and there are many ways to help microfinance clients to go green and educate them about their role in working with the environment rather than harming it.  The growth in environmental awareness has huge potential in helping generate additional income and cost savings for Kenyan borrowers. Please stay tuned for my next blog post where I address strategies that can be used to overcome these barriers.

Claire Markham is part of KF16, serving with SMEP Deposit Taking Microfinance Limited (SMEP) in Nairobi, Kenya. To lend to SMEP’s borrowers, become part of the SMEP lending team.

We are Kiva Fellows. This is the stuff we like. Here is an insider (often critical, or satirical but always true!) view of what it means to be a Kiva Fellow and promote access to financial services around the world. From alpaca fur to FSSs to ziplock bags, these are the things we like and thrive on.

#1 Being the first foreign person that somebody has ever seen in their life

Dave Weber, KF16, Cambodia

Few life experiences will measure up to the one where a Kiva Fellow is   told that he or she is ‘the first foreigner that somebody has ever seen  in their life’ (TFFPTSHESITL).  This experience often comes  with having ones hair and skin touched, which people in our home countries don’t find nearly as interesting.  KFs know that their image will forever be bored into the mind of the Latino/African/Asian/MidEastern borrower since we assume they ‘never forget their first one.’
A Kiva Fellow will react to being TFFPTSHESITL in several ways.  They will utilize social media  to get the word out to 500 people in their friend list and possibly even engage the Stories from the Field blog to get the message out to potentially hundreds of thousands.  It will also be the first story they tell supporters and people back home.  Kiva Fellows will also often use the phrase, “I’m pretty sure I was the first foreign person to ever go there” when referring to locations, even if they’re talking about Machu Picchu or Angkor Wat or the running of the bulls or the Washington Monument.

Now if you’ll excuse me, I’m off to spend my holiday evening at a Cambodian air conditioned movie theater which I’m certain no foreign person has been to before and I will be TFFPTSHESITL to at least half of the moviegoers there to engage in the revelry entitled Cowboys vs. Aliens.  

#2 Alpaca Fur Clothing

Eric Rindal, KF16, Bolivia

It is no secret amongst the vendors in the Andean regions of South America that Kiva Fellows are suckers for tightly knit alpaca fur scarves, gloves, sweaters, or caps. Maybe Fellows have this presumption that everyone is doing it…even the locals (I swear, dude). However, that is a bold conclusion and is a slippery slope to justifying the egregious “natural blue” alpaca fur sweater adorned with kitschy dancing alpacas circumnavigating the dangly tasseled periphery!

All that to be said, the Kiva Fellow living in La Paz (who is freezing!) finds it imperative to wear his alpaca fur scarf, cap, and fingerless gloves (which allow him to type his Borrower Verification notes) all the time. But, let it be known, this only occurs in the privacy of a locked MFI office or while home alone!

#3 Eating The Profits

Jim Burke, KF16, Nicaragua

Kiva Fellows love eating borrower’s profits. The Kiva Fellow will shamelessly track down the Kiva borrowers that sell tasty things like street food or pineapples. Undoubtedly the Fellow will return home with bags of (free) fruit or a belly full of street chicken. Understanding their clients is important to the fellow and clearly there is no better way to do this than eat the fruits of their labor. The fellow is culturally sensitive and understands that offering to pay is offensive to most borrowers. The extreme generosity is not something to be taken advantage of but the free nacatamale did MAKE the experience collecting a journal. If its fried crickets, boa, fresh bread, anticuchos, whatever we are trying it! If we can taste a loan we know its real.

#4 Our FSSs (Field Support Specialists):

Laurie Young, KF16, Indonesia

Let’s face it, Kiva Fellows secretly (well I guess it’s not a secret anymore) wish they could have the job of their FSS.  Honestly, who wouldn’t want to live abroad and travel to/work with microfinance organizations in the countries which Kiva operates? Sign me up!  What makes us ‘like’ them even more is that they are our ‘Yoda’ while in the field.  They are the one’s that setup our workplans (list of tasks we must complete as fellows) and provide guidance for helping us complete them.  We were fortunate to spend a week with them at KF16 training in San Francisco this summer and got to see both their fun and intellectual sides!  They are crucial in the success of Kiva and deserve immense amounts of credit and respect for the hard work they put in to maintain positive relationships with Kiva’s Field Partners!

#5 Responding more promptly to the local vocabulary for “white person” than his/her actual name

Allison Moomey, KF16, Burkina Faso

Whether it’s blanche (French), nassara (Moore), barang (Khmer), mzungu (Swahili), chelito (C. Am Spanish) or any other local dialect, it now takes just a single word to get our attention.

“Wait… you mean I don’t fit in?”

#6 Being Mistaken for a Local

Sandra Pina, KF16, Honduras

Kiva Fellows (“KFs”) work tirelessly to adapt to local culture. KFs are renown for their commitment and will go to extreme lengths to assimilate. Sure, under normal circumstances a KF would likely decline the glass of banana-flavored soda with breakfast, but when in the field, they embrace all character building moments. This extends to many facets of daily life including but not limited to, clothing, hair, cuisine, sports, slang, hygiene, leisure activities, driving and partying habits. The mission is a noble one so it rightly justifies spending a Saturday night at T.G.I. Friday’s, drinking instant coffee, wearing dress pants in 90 degree heat, or watching a nightly dating game-show in order to partake in the morning gab session with office-mates over a mug of instant coffee. Yes, the lengths can be somewhat extreme, but well worth the sacrifices. KFs  live for the surprise and confusion that color the faces of locales when they reply, “Nope, actually I’m not from here, I’m from X.” Oh yessss, chalk one up for Team Kiva!

But in all seriousness, there are some hurdles that simply can’t be jumped no matter a KF’s commitment  level or the duration in country. Dance and language ability, vegetarianism, and ancestry have been known to hinder efforts. But, as on would expect, KFs soldier on. Can you spot the fellow?

#7 Ziploc Bags

Tejal Desai, KF16, Sierra Leon

Freak 10-minute downpours and a broken umbrella. Dusty winds. Ants.Mud. These bad boys can sustain it all. In Sierra Leone, Ziploc bags have been essential in protecting KF necessities when in the office and out in the field: flash drives, cameras, usb modem, extra batteries, cell phone, notebooks, directions scribbled on scraps of paper. Not to mention, they are master guards at protecting biscuits and others snacks from the interests of Sierra Leone’s ant kingdoms and families of spiders. It’s clear that Ziploc is more than just your average sandwich bag.

If liking Ziploc bags is wrong, we don’t want to be right!

#8 Planes, Trains and Automobiles

DJ Forza, KF16, Georgia

Kiva Fellows love to talk about their adventures on new and interesting forms of transportation. We especially like it when, going on a borrower verification to a remote area, we get to take two or three various modes of transport in one day; walk 20 minutes to the microbus, ride a Poda-Poda for five hours, hop on the back of a moto for 30 minutes, take ferry for 45 minute crossing, cling for life to a motorcycle driver, chill in a 4×4…all those bumpy, dusty and crowded hours spent planning our next blog post to share the fun and exciting ways we get around our new country! Even hailing a taxi is opportunity for another amazing Kiva adventure! As for me, I’m off on a marshrutka for a six hour journey to Ninotsminda near the Armenian border…where, hopefully, I will need to ride in the back of a donkey cart the last mile or so.

#9 Finding an Upscale Cafe to Escape To

Claire Markham, KF16, Kenya

Kiva Fellows often fully adapt to the local cuisine and eat all of the traditional staple foods throughout the week. However, sometimes, it is necessary to escape to that happy place with North American foods to indulge in. For me, this upscale haven is Art Caffe in Nairobi where I can get reliable wifi while I enjoy a chai latte and chocolate molten lava cake. I recognize I am paying ten times as much as I would for a more traditional Kenyan experience, but once in a while, this luxurious escape is exactly what I need to treat myself after a productive week.

Be a part of loans that change lives. Apply to be a Kiva Fellow!

Jim Burke is a Kiva Fellow working with AFODENIC in Nicaragua. When not diligently working on his Kiva deliverables he kills time reading the blog SEAWL. To learn more about Kiva borrowers around the world please visit Kiva.org.

Before I arrived in Nairobi, I had heard on multiple occasions about the fundamental role loan officers play in making an MFI function. Loan officers are the backbone of the organization; they are intimately familiar with their clients and the challenges they face and they go to extraordinary measures to meet client needs. I was able to fully appreciate this on my recent borrower visits in Mombasa with two of SMEP Deposit Taking Microfinance Limited’s loan officers: the one who supposedly travels the most, and the one who supposedly travels the least.

Now that I have an understanding of a loan officer’s typical day, it’s impressive to me how much they contribute to the organization.  I feel it’s important to share this experience with those of you who haven’t had the opportunity to spend a day in their shoes so you too can share in this feeling of admiration and learn that, despite the long distances travelled, the shoes do not become worn out.

The most travelled loan officer

I had heard about the loan officer in the Mombasa branch who travels the furthest and I was curious what exactly this entails. I jumped on the opportunity to accompany him on his borrower visits. He lives near the airport but every morning he takes public transport into the office. He spends an hour or two doing preparation work for his borrower visits before he departs for a long day of borrower meetings, including loan disbursements, repayments, or savings facilitation for groups who have not yet received loans.

Our long journey begins. We walk 10 minutes to the nearest matatu stand and board the matatu, a 14-seater mini bus, for a 10 minute ride to the ferry. Because the ferry has not yet arrived, we must wait for 15 minutes before we get on board. There are anywhere between 1 and 3 ferries working at a given time and the waiting time varies accordingly. Today we were lucky to only wait for 15 minutes because there are constantly hundreds of people who take the ferry transporting many types of goods and it can get quite overcrowded.

A very crowded ferry ride

After the 15 minute ferry ride, we meet with the first borrower right in the village on the other side of the river for a 20 minute meeting. This is the only borrower we are visiting in this village, so when the meeting ends, we must board another matatu to another borrower group.  This matatu leaves town and drives along the main road for another 45 minutes. The loan officer tells me this is our stop – I’m confused because I don’t see any sign of civilization. He points to a dirt path which we walk along for 15 minutes until we get to a small clearing between the vegetation.

Dirt road to borrower meeting

Unfortunately the borrowers we came to find aren’t there. We sit on a tire that is lying on the ground and we wait while he calls them to see if they’re still coming. I’m in no rush personally but I know that the loan officer has several other clients to visit that day so I admire his patient manner. Forty five minutes pass before the borrowers stroll in.  To you, they may appear to be 45 minutes late but in Kenya, we consider this right on time. They unroll a straw mat and sit down in the shade of the palm trees to discuss loan repayments for 20 minutes.

Meeting with a group of borrowers

When the meeting is over, the loan officer suggests we head back to the office so that he can drop me off despite this being only a fraction of the borrower visits he does in one day. He tells me that some of his clients are double the distance we traveled today from the office and we would typically have another three to visit in addition to the two we had already seen. To thank him for his time, I offer to treat him to lunch. It is already 3:00 pm and I am beyond hungry. He seems pleasantly surprised – his days are usually so busy that he never has time for lunch so this is a real delight.

The least travelled loan officer

On a separate occasion, another loan officer kindly lets me tag along as he visits two of his borrowers. I had heard that compared to some of the other loan officers, he doesn’t need to travel very far for these borrower visits. This is all relative though and I’m somewhat skeptical that his borrowers are going to be easy to get to.

Similar to the first loan officer, we must walk 10 minutes to the nearest matatu station. Again, we board the matatu and must wait until it is full before we can set off. After 5-10 minutes of waiting, the matatu departs. It is swelteringly hot outside so we sit in the vehicle sweating like we’ve just run a marathon. When we encounter traffic, the matatu drives on the sidewalk and on the wrong side of the road to cut ahead of the other vehicles. Thanks to this creative maneuvering, it’s only a half hour before we turn off onto the road to Bamburi where his borrowers are located. We drive past several burning piles of garbage which have a piercing stench.  I encounter these on occasion but haven’t been able to get used to the smell, though the loan officer doesn’t seem bothered in the slightest. After the Bamburi turn off, we drive another 15 minutes to our stop where get out and walk for two minutes to the borrower meeting.

We meet the borrowers outside a small government building and I am mesmerized by the 15-20 other borrower groups meeting huddled in circles ranging from 5 people to 25 people. Apparently this is a popular place for borrowers from all different MFIs to meet and it reminds me of how integral microfinance has become in these low-income areas.

Borrower meeting in small government facility

We meet the borrowers for 15 minutes while the loan officer documents their repayments and savings progress.   The meeting is relatively quick and it’s not long before we hop on another matatu for a 10 minute drive to his next borrower to whom he disburses a Kiva loan. This process takes 10 minutes as he explains how Kiva works, collects the borrower’s information and takes his picture. When this meeting ends, the loan officer sends me back to the office while he continues to meet several other borrowers. He doesn’t seem to eat lunch either as his day is also action-packed.

At the end of the day, he comes back to the office to document his progress for the day and completes some paperwork before heading home. This man’s typical day is by no means a walk in the park, and he is the loan officer who is rumored to travel the least.

Eyes and ears of the organization

Loan officers do far more than routinely travel to clients and attend meetings. They are the eyes and ears of an MFI; they observe what clients value in the MFI and what the clients would like to change about the MFI’s processes. They understand the challenges clients face in their day to day lives.

I asked one of the loan officers why customers choose SMEP over other MFIs. He said it can be a variety of reasons but often it is because SMEP is adaptable and offers loan features that respond the customer needs. One of his borrower groups told him they have difficulty making monthly repayments and would rather pay weekly to avoid keeping large amounts of cash on hand; he adapted and said he would come to them weekly instead. He listened to their needs and responded accordingly.

MFIs can have incredible customer service networks to solicit comments from customers, but the best form of feedback comes from loan officers who interact with the clients daily. If an MFI can successfully leverage the knowledge of their loan officers, it will really do wonders for their ability to meet customer needs.

A recap of the day in numbers – amount of time taken to visit two borrower groups

Claire Markham is part of KF16, serving with SMEP Deposit Taking Microfinance Limited (SMEP) in Nairobi, Kenya. To lend to SMEP’s borrowers, become part of the SMEP lending team.

“A startling new statistic from the World Health Organization,” the BBC announcer sounded from my taxi’s radio. “There are only two registered medical professionals for every 1,000 Kenyans…” As I drove through the bustling, overcrowded streets of downtown Mombasa, I took a deep breath and was reminded once again – my work here is not going to be easy.

The BBC announcer continued to explain that this data is even more sobering for poor, uninsured Kenyans who rely on government-funded hospitals. A recent economic survey showed that only 19 public health officials and 18 doctors are available per 100,000 Kenyans. Public doctors are often overwhelmed with patients and it’s not uncommon for Kenyans to pass away waiting to receive essential care. Insured patients have the option to go to a private facility and have a much better chance of receiving quality care. Few Kenyans in this region can afford traditional health insurance plans and families suffer devastating setbacks if one member falls seriously ill.

Maisha bora kwa jamii yako – “Better life for your community“

In the coming weeks, Yehu will introduce a new loan product to provide affordable health insurance to rural borrowers. Yehu partnered with CIC Insurance to create the Afya Imara or “strong health” loan. For around $140 a year, Yehu members can purchase a combined in-patient and out-patient family insurance policy, with no HIV-AIDS exclusion. To ensure this product is accessible to all borrowers, Yehu aims to offer Afya Imara loans for as low as 2% below the market rate.

Yehu's Afya Imara brochure

The Afya Imara loan is one of many responsive loans Yehu offers to address the unique concerns of their community. Their value statement explains, Yehu Microfinance endeavors offer responsive, competitive products that meet the needs of our rural clients. To accomplish this, Yehu has developed a diverse portfolio of loan products, including:

• Traditional Business
• Maji ni Uhai (water)
• Elimu (school fees)
• Mabati (housing)
• Sikukuu (religious)
• Top Up
• Emergency
• Poultry/Meat Goat

The Sikukuu loan, for example, offers support specifically for Mombasa’s Islamic population. Many Muslim borrowers reduce their business hours or close stores entirely during the holy month of Ramadan. Sikukuu enables them to cover costs of food and housing until they can return full-time to their businesses. Yehu experienced its best performing month ever in August, largely due to the popularity of its Sikukuu loan.  Similarly, Yehu provides the Elimu loan to ensure borrowers have enough money to keep their children in school, while the Mabati loan provides roofing material and supplies for their homes.

Maji ni Uhai – “Water is Life”

Responsive lending has also led to important accomplishments in water distribution. Securing clean drinking water is an enormous challenge in coastal Kenya. To overcome this obstacle, Yehu has developed a water loan product to provide clients with an uninterrupted, sustainable supply of clean water for domestic and commercial use. Although it’s fairly new, the Maji ni Uhai or “Water is Life” loan is one Yehu’s best-selling products. Borrowers can chose from three types of loans:

• Water tanks
• Water connectors
• Fresh water wells

To learn more, I visited Zainab, the first water loan recipient in Yehu’s Kisauni branch. Before Zainab took out her loan, water would only come twice a week to her village’s communal pumps. Villagers pay 3 KES (about 3 cents) per 20 liters, when available. However, the supply is very unreliable and people are usually forced to borrow from neighbors or pay high premiums at the store.

Zainab serves as her group’s Center Chief and has a long, flourishing history with Yehu. For her sixth loan, she purchased a 3,000-liter tank for 20,100 KES. In addition to supplying water for her home, Yehu’s tank also enables Zainab to sell water during times of need. To prepare for her application, she researched nearby pumps to determine ideal loan size. Too small – she loses out on an opportunity to serve the most customers. Too large – water could stagnate and breed bacteria. Cost of piping and other infrastructure must also be included in her loan estimate and application.

After the application is approved, Yehu purchases the water tanks directly and delivers to borrowers. These tanks can store one to two days’ supply of water and Zainab charges 10 KES per 20L – more expensive than pumps, but far more affordable than buying at a store when supplies are low. Only 10 months later, Zainab repaid her loan and now enjoys strong profits.

As I was leaving, I asked Zainab if she planned to take out another loan with Yehu. She nodded her head enthusiastically, “Of course.”

M&M treats in Mombasa

—

The longer I spend in Mombasa, the more I realize that microfinance alone is not enough to create real change in a community. Borrowers will only thrive if they first have a solid foundation in health care, housing and education. Part of what prevents Yehu clients from reaching the next rung on the economic ladder is that they are so vulnerable. Malaria is a constant menace here – it kills 1 million people each year, mostly among children living in Africa. Droughts and ever escalating food prices threaten to unravel even the strongest businesses. Responsive loans play an enormous role in shielding clients from these risks and providing stability in their communities. As Yehu has demonstrated, offering business loans is not enough – MFIs must also learn to listen to clients and effectively respond to their needs.

Lauren Barra is serving as a Kiva Fellow with Yehu Microfinance Trust in Mombasa, Kenya and Tujijenge Tanzania in Dar es Salaam. Click here to loan to a Yehu borrower or join the Yehu Lending Team.

On Kiva’s website, the description of why Kiva does what it does is as follows:

We envision a world where all people – even in the most remote areas of the globe – hold the power to create opportunity for themselves and others.

We believe providing safe, affordable access to capital to those in need helps people create better lives for themselves and their families.

Last Thursday, I had the opportunity to spend a day with a loan officer with SMEP’s Nairobi Central branch, and we traveled to three different Kiva borrower groups at various stages of the savings/loan process with SMEP. Though these were fairly routine visits for the loan officer, they were far from ordinary from my perspective. My experience with meeting these borrower groups enabled me to see first hand how Kiva’s raison d’etre actually plays out in real life.

A Kiva borrower with his vegetable stand in Nairobi

Loans provide empowerment

We envision a world where all people – even in the most remote areas of the globe – hold the power to create opportunity for themselves and others.

The word that jumps out to me the most in this vision is power. My experiences from the day in the field have shown me that borrowers benefit not only from the financial aspect of having a loan, but from the pride and empowerment that comes as a result. In the borrower meetings, all of the clients were treated like capable, responsible individuals, regardless of their level of income or how well they were doing with their savings. Because they are trusted with financial concepts and treated as business partners, it was very clear the sense of power that each borrower that I met felt.

After the first group meeting, a few of the borrowers were showing me around so that I could see their businesses. There was one man who operated a small vegetable stand but he also had a small glass heating device that was used to store French fries so that they would stay warm and he could sell them. He was able to purchase this fry machine with his Kiva loan. I took a picture of him in front of his vegetable stand but then he insisted that I take his picture in front of the fry machine as well. He was evidently so proud of it, and I found it really heart-warming to see his satisfaction and delight because of the investment that he was able to afford with Kiva and SMEP’s help. He wasn’t given this fry machine as an act of charity; he had the power to create the opportunity for himself because he was the one who had the idea to purchase the machine, and he diligently saved month after month until the loan was available to him. That power that he feels knowing that he wasn’t just handed this opportunity is what I saw to be reason he had such great pride in his investment.

A Kiva borrower with his french fry machine in Nairobi

Loans give hope for the future

We believe providing safe, affordable access to capital to those in need helps people create better lives for themselves and their families.

I believe that the fundamental steps in being able to create a better life for the borrower and their family are having goals for how a better life can be achieved, and having hope that these goals are achievable. From what I saw at the borrower meetings, microfinance loans give hope for the future.

All of the groups of borrowers that I met have goals are attainable. In borrower profiles, none of the clients state that their goal is to become an international sports gold medalist or prime minister of the country; their goals are as simple as to provide education for their children, or to eventually open a wholesale business. These goals are realistic as long as the borrower is motivated, saves and makes regular loan payments.

Though the clients may have had these goals before they became a SMEP client, I believe the savings and loan process has two effects:

1) It enables them to develop longer-term goals than they otherwise may have been able to

2) Access to capital increases the likelihood that the goals will be achieved

The first group of borrowers that I visited had the intention of taking out loans for water tanks once their business loans are paid off because their village does not have a source of clean water. Though this may have been a goal of the borrowers even without SMEP and Kiva’s assistance, this goal would take a much longer time period to be reasonably achieved without safe and affordable access to capital.

In the first borrower meeting, one of the clients was required to exit from the group. It was for a valid reason because she lied to SMEP about her identity and her business. She had not yet received a loan as she was still in the savings mode, but she was required to withdraw all of her savings and could no longer attend group meetings. She was devastated that she would no longer have the possibility of a loan in the future and no longer be able to share in the feeling of community associated with group membership. Though this was not a particularly pleasant occurrence to witness, the devastation that she displayed demonstrated that she was losing something very important to her. This truly emphasized to me how significant the role of microfinance plays in each of these clients’ lives.

The sewing business of a Kiva borrower in Nairobi

Kiva’s personal touch

The sense of empowerment and the hope for the future that are provided by microfinance loans are common to most microfinance providers that have their clients’ best interests in mind. However, I noticed something special that Kiva brings that goes above and beyond these two benefits previously noted: personal touch. I recognize that Kiva’s processes can be cumbersome at times for some MFIs, and I had imagined that of all people, loan officers might have the hardest time adapting to Kiva’s model as it is additional work for them.

However, I heard an interesting perspective from the loan officer I traveled with. When I asked her what she thought of Kiva, she said she enjoys the personal elements that Kiva adds to the transaction. She likes to get to know her customers as part of her job, and thinks that should be something all loan officers strive to do regardless of whether the loan is funded through Kiva. Throughout the day, we met approximately 50 borrowers and she knew all of her clients’ names. She told me that she does not think following Kiva processes adds that much time because all she is doing is documenting information that she would like to receive from customers anyways as part of her job.

I understand that this may not be the perspective of all loan officers, but I think that Kiva’s processes enforce a minimum degree of personal interaction to take place between the loan officers and the client, which is how I believe business should be conducted no matter what the circumstance. Though I have no evidence to back this up, I suspect that a client would be more likely to act appropriately with the loan proceeds and make the repayments (within their control) if they are working with a loan officer that they know and respect rather than a loan officer whose only interaction with the borrower is collecting repayments. I also think that the benefits of a positive personal relationship between the loan office and the borrower transcends much further than between the two parties; it can create a strong positive image for Kiva, SMEP, and the microfinance industry.

Claire Markham is part of KF16, serving with SMEP Deposit Taking Microfinance Limited (SMEP) in Nairobi, Kenya. To lend to SMEP’s borrowers, become part of the SMEP lending team.

News of hurricanes, earthquakes, and wildfires bringing you down? Tired of hearing about how the world economy is in the toilet and the U.S. outlook is grimmer than ever? Want to explore a corner of the world where risk profiles are actually improving? Welcome to Yehu Microfinance Trust in Mombasa, Kenya.

Starting today, Yehu will now proudly display a three star Field Partner risk rating on Kiva. In their communication with Yehu, Kiva highlighted its main justifications for the change:

Reasons for the upgrade include continued maintenance of portfolio quality, strong growth, excellent management team hires, and strong competitive positioning.

I sat down with Esther Mutuma, the newly appointed COO of Yehu, to discuss her thoughts on the upgrade:

It’s really exciting. The most obvious outcome is people will take the time to look at us now because of the rating. We appreciate the model Kiva uses. Having lived in the U.K., I know the first thing I did before purchasing an item was check the rating. I know the mindset people in the U.S. have. Ratings are everything.

As Casey explained, the cost for an MFI to participate in Kiva isn’t cheap. It takes time, energy, and resources to collect borrower stories and pictures from the field. Morale can plummet when loan officers put forth all of this effort and their loans repeatedly go unfunded on Kiva. By displaying a strong Field Partner rating, Yehu can increase its visibility and instill confidence in the lender community. In the future, Yehu hopes that no loan will expire due to its Field Partner rating.

—

So how does Kiva decide to upgrade a Field Partner? We’ve seen from the recent S&P downgrade of U.S. debt that rating the inherent “risk” of a country or institution can be a controversial business. Kiva has developed its own methodology for evaluating the creditworthiness of each Field Partner. This risk model is based on Kiva’s accumulated experience with Field Partners and it evaluates a number of different dimensions, including:

• Governance, management, and staff
• Planning, audit, and earnings
• Liquidity and capital
• Management information system and internal controls
• Transparency

Each of these categories is evaluated during an on-site visit by a Kiva analyst and scored on a scale of 1 to 5. An overall Field Partner risk rating is then calculated, with five stars indicating lower risk of institutional default and one star indicating higher risk of institutional default.

Vibrant colors of the Mombasa marketplace

Rural borrowers account for a significant portion of Yehu’s customer base. As Esther explained, this equates to a higher than average cost operation ratio as loan officers often spend an enormous amount of time and money connecting with borrowers in remote villages. While operating cost is an essential component of the risk model, incorporating a variety of other factors such as management and growth potential, Kiva has enabled Yehu to distinguish itself beyond the balance sheet. Kiva’s risk model isn’t perfect, but judging from Yehu’s experience it’s getting a lot of things right.

Congratulations, Yehu! To show your support for this important accomplishment, click here to loan to a Yehu borrower or join the Yehu Lending Team.

Lauren Barra is serving as a Kiva Fellow with Yehu Microfinance Trust in Mombasa, Kenya and Tujijenge Tanzania in Dar es Salaam.

The Pros and Cons of Microfinance – A View From The Field: Fixing the chain on the way to a repayment meeting in Haiti. Poor roads thwart borrowers and MFI loan officers alike.

This week in the field fellows across the world explore the factors that make microfinance and its successes a reality. In Kenya, we meet the actors who reach out to borrowers everyday, at any and all degrees of their own discomfort. In Nicaragua, we discover that high aspirations can be met with equally powerful results. In Senegal, a series of well-dressed strangers introduce us to the rest of the community, and the lesson that any organization seeking to serve the community must truly know the community. Between Colombia, Haiti and the Dominican Republic we gain insight about the pros, cons, and the conditions for success in microfinance. Throughout these stories, we’re led into homes, gardens and local festivals; down roads, rivers, and a few wrong turns; and we ultimately reach our destination: a deeper understanding of how- or really, through who and what- this work is made possible.

Nathan’s Office
Country: Kenya / Fellow: Nila Uthayakumar (KF15)
“It takes humility and tremendous patience to do the work that they do. A sense of humor is essential.” Nila sings the praise of the unsung heroes of microfinance: the loan officers.

A Rainy Day in Masaya
Country: Nicaragua / Fellow: Jason Jones (KF15)
How often does an organization’s mission statement really meet reality? Jason Jones finds that for his partner in Nicaragua and borrowers like Maura, Gloria, and Adelfa, lofty goals are realized everyday.

Kiva in the Community
Country: Senegal / Fellow: Tim Young (KF15)
As Tim Young begins to settle himself within his community, he learns that an microfinance institution’s presence in the local community must be deeply embedded as well.

The Pros and Cons of Microfinance – A View From The Field (A Three-Part Series)
Country: Colombia / Fellow: Nick Hamilton (KF14)
Part One of this through three-part series considers the strengths and benefits of microfinance. Part Two part two weighs its drawbacks and weaknesses. Part Three proposes a set of institutional and environmental factors that contribute to the success of microfinance.

~
Updates from the past month:
Personal Connections, Supply and Demand + A Culinary Excursion
Farewells, Mistaken Identities + Micro-Microfinance
Earth Day, Celebrations + Exceeding Expectations
Trash, Delicious Treats + Community Outreach
Cute Pigs, New Toilets + Everything is Relative
~

Plus more pictures from the past week:

Colombia, by Nick Hamilton

Senegal, by Tim Young

Nicaragua, by Jason Jones

Kenya, by Nila Uthayakumar

Nathan at work visiting borrowers of Juhudi Kilimo

By Nila Uthayakumar, KF14 Uganda and KF15 Kenya

“It was my first day on the job,” Nathan says with a wide grin.

“I wore a coat and tie, I looked very smart! I was going to work for a bank, sit in a swiveling chair, and swing my legs!”

Nathan and I are standing on the side of a road. The occasional share-taxi barrels past us, but mostly we are surrounded by the hush of farmland that stretches as far as the eye can see. We’re in the Southern Rift Valley of Western Kenya. Nathan is neither sitting, nor swinging his legs. We cross the road. The mid-morning sun casts our shadows long across the hot asphalt.

“I got to the office that day and they told me to go and get a cow from a farmer who was not making his loan repayments. So I walked ten miles pulling a cow back to the office. On my first day.” Nathan laughs, and I am incredulous.

Nathan works as a loan officer for Juhudi Kilimo, a Kiva partner microfinance institution in Kenya. Juhudi Kilimo makes microloans to farmers to finance the purchase of assets, like dairy cows. Of Juhudi’s roughly 3,500 borrowers, around six or seven will default in a given year. When that happens, a loan officer, and in this case Nathan, is asked to go and collect the asset so that Juhudi can sell it and recover some of the loss.

“I almost quit.” He says, “I almost called the office the next day and said I wouldn’t be coming in.” But he didn’t. And here he and I were, two years later, visiting another farmer outside of a town called Litein.

Edward, another Juhudi Kilimo loan officer, visits farmers in Kisii.

Two years ago when Nathan applied for a job as a loan officer with Juhudi Kilimo, he had just graduated from college. Considering that he was expecting a comfortable desk job, and met instead with physical labor on his first day, I would say that he is nothing short of dedicated.

One thing I that I did not expect when I started my Kiva Fellowship in January is the respect and admiration I have gained for microfinance loan officers. When I am not working in the office, I am in the field visiting borrowers. I have spent many a scorching and dusty day walking alongside a loan officer, and I consider it an honor and a privilege. It takes humility and tremendous patience to do the work that they do. A sense of humor is essential.

The workday often begins before sunrise and finishes after sunset. Share-taxis only get a person so close to the final destination; many farms can only be reached by foot. A real lunch break can be a luxury, and very often it is skipped entirely. Furthermore, I think that ‘loan officer’ is a misleading title. It may make the work seem restricted to dealings with monetary exchanges, but I would argue that ‘motivational speaker,’ ‘business consultant,’ ‘advocate,’ and ‘educator’ would all be just as appropriate to describe the work of a loan officer. From my experience in Uganda and Kenya, the borrowers themselves actually prefer ‘teacher.’ I too find it to be far more fitting.

Back on the farm, Nathan and I have reached the home of the borrower we are meeting with. We’re served steaming cups of tea while we sit on a bench under the shade of a tree. A pair of puppies dart back and forth between our feet and a goose ruffles her feathers. Nathan smiles, takes a sip, and swings his legs.

***

Check out Nila’s other blog posts:

The View from the Ground

In Defense of “High” MFI Interest Rates: Part II

Video Blog: The Story of Lini Nanyonga

Video Blog: The Kiva Story

My Heart has Taken Root

Microlending Behind the Scenes: How MFI’s Judge Credit Worthiness

Nila is living and working in Nairobi, Kenya as roaming fellow. She has been working with Kiva partner Juhudi Kilimo, and is having a blast!

I recently concluded my Kiva Fellowship that has spanned 6.5 months, 5 of Kiva’s MFI field partners, 2 continents, countless long haul buses, and roughly 12,000 miles of travel. As a member of Kiva Fellow’s 12th class (KF12) I headed to Ecuador in July, 2010 to work with two of Kiva’s field partners, Fundación Espoir and Fundación D-MIRO. I never would have guessed that when December rolled around I’d be summitting Mt. Kilimanjaro in Tanzania and trying to pick up Swahili. That’s because KF13 landed me in Nairobi, Kenya to work with Faulu Kenya, Juhudi Kilimo, and Kenya Agency for Development of Enterprise and Technology (KADET).

From witnessing political turmoil in Ecuador to surviving a matatu crash in rural Kenya, there were definitely some harrowing moments but it’s been a truly amazing journey, a journey, that like Kiva itself, has been all about people.  I’ve been out of the field for several weeks and I haven’t come up with a great way to summarize my experiences as a Kiva Fellow. Each time someone asks, “So, how was it?!” I kind of stammer, generally respond that it was fantastic (it really was), and share an anecdote or two. The truth is, it was a life-changing experience, or rather, a series of experiences, and it’s hard to know where to begin. In lieu of even attempting to be exhaustive, here are some of my favorite images from my Kiva Fellowship.

The lender-borrower connection:
Explaining to borrowers that they will be posted on the internet is crucial. One of roles of a Kiva Fellow is to ensure that the staff at their host MFI is explaining Kiva to clients as clearly as possible.

In his first borrower interview, Carlos, Fundacion Espoir’s new Kiva Coordinator in Portoviejo shows a borrower how her information will be displayed on Kiva’s website

In Matuu, Kenya, borrower Lilian Syonzia beams at a printout of her photo and business description as they appear on the website

Kiva coordinators:
The Kiva Coordinator or KC at each MFI handles Kiva responsibilities from submitting repayment reports to writing or editing borrower profiles and journal entries. Here are 4 of the Kiva Coordinators I had the opportunity to work with.

Trying tripas (tripe) with Yvonne, the KC at Fundación Espoir in Quito, Ecuador

Rubi, the KC at Fundación D-MIRO and I taking a break from visiting borrowers in Playas, Ecuador.

Dorice, assistant Kiva Coordinator at KADET. This photo was taken right before Christmas when Dorice realized that Kiva's review and translation team had reviewed overnight all 25 loans of the loans she had uploaded the previous day. Her exact words were, "Oh my goodness! Look! They've reviewed them all! They are amazing. I am so thankful."

Zachary Muriithi, Kiva Coordinator at KADET (and a pastor) and his family gave me a warm send-off at Nairobi airport

Tastes of Kenya and Ecuador:

Three of Kenya's staple foods: chapatti (flat bread made of wheat flour, water, and salt), sukuma wiki (chopped kale & collard greens), and grilled meat

Ceviche de camarón (shrimp ceviche) is a specialty from coastal Ecuador. Ceviche is served cold and is often accompanied by either white rice or patacones (green bananas, sliced and fried, as pictured).

Politics on the ground:

Political unrest in Ecuador:
On September 30th, police protests brought Ecuador’s major cities to a halt – some say this amounted to an attempted coup, others maintain it was a police protest over changes in their wage structure and nothing more. The city of Guayaquil unraveled into chaos and the staff at Fundación D-MIRO organized into carpools and dispersed to staff members’ homes in the least affected areas of the city. While the security situation deteriorated rapidly that day, it also turned around equally as rapidly and most people were back at work in Guayaquil and Quito the following day, including the staff at Fundación D-MIRO. The protests, however, called attention to many of the social and political reforms enacted by President Correa over the past 4 years.

Looting outside of D-MIRO's office

The TV at D-MIRO shows chaos on the highway connecting the office in peri-urban La Isla Trinitaria to the city center of Guayaquil.

The International Criminal Court and Post-election Violence in Kenya:
On December 15th, 2010 the International Criminal Court (ICC) announced the much anticipated list of Kenyan leaders suspected of organizing the violence following the disputed 2007 election. It is still uncertain whether the accused will go on trial in the Hague or whether Kenyan authorities will demand they be tried by local tribunals. Many feared that the announcement would spark protests in Nairobi, but fortunately the city and country remained calm. Here’s what 8 Kenyans had to say about the ICC’s announcement.

From the BBC on September 15, 2010

Two of the streets I lived on:

Portoviejo, Ecuador and Nairobi, Kenya

Looking for borrowers:
Whether part of a borrower verification process, or simply to get a journal update for a borrower, the life of a Kiva Fellow generally involves a lot of time looking for borrowers. When directions read something like, “in the market, past the clothing, near the fruit sellers,” this can be a challenging task, but one that loan officers are adept at handling on a daily basis.

Searching for a borrower in Vihiga, Kenya

A special borrower visit in Kenya:
This borrower visit stands out in my mind because it involved a 2 hour motorbike ride to a wheat farm in Kenya’s Rift Valley to meet Silole, a woman from the Masai ethnic group and wheat farmer with her first loan from KADET. This visit was part of Kiva’s borrower verification process and fell early on in her loan cycle (the wheat had not yet been harvested) so it was too soon to determine the impact of her loan. The  warmth and generosity of her family and the beauty of their surroundings will always stay with me. At the end of our visit Silole gave me one of her intricate beaded necklaces.

A 2 hour motorbike ride from the town of Narok to verify a borrower

Kiva borrower, Silole Ene Sanamwala and her son, Alex. Silole is wearing traditional Masai jewelry.

Silole's family invited loan officer, Robbie, and I in for roasted goat meat, chai tea, and chapattis

Silole's family wheat farm

Where it all began!

On the wall at Kiva’s headquarters, each Fellow starts as a post-it on a country. And the journey unfolds from there…

And with that, I bid adieu to the Fellow’s blog, at least from this side of things. I can only hope that I’ve contributed to Kiva and its Field Partners as much as I’ve gained. Thank you for your comments and support over the months, and most importantly, for lending on Kiva. Want to get out to the field yourself? Apply to be a Kiva Fellow today!

Tara Capsuto has recently returned to strategy consulting at Global Business Network in San Francisco, CA. She’ll continue to be an avid supporter of Kiva and the Kiva Fellows Program.

By Tara Capsuto, KF13, Kenya

This blog really is about giant bunnies. It’s also about asset financing and how loan groups are working together, with the help of Juhudi Kilimo (one of Kiva’s field partners) to raise rabbits and boost their incomes. Juhudi provides an innovative, agriculture-based, micro-asset financing loan product to assist smallholder farmers in acquiring productive assets such as dairy cows, chickens, irrigation equipment, and most recently, giant Flemish rabbits.

Juhudi Kilimo’s rabbit loans are a great example of a microfinance institution’s (MFI’s) response to local market demands. Juhudi currently has 3 loan groups raising rabbits, in the Murang’a area (in Kenya’s Central Region). They started encouraging clients and potential clients to raise rabbits because a market for rabbit meat has developed in the area over the past couple of years. How Juhudi administers the rabbit loans benefits their clients in several ways.

First, Juhudi works to connect borrowers with suppliers of Flemish rabbits and Ministry of Agriculture officials who provide instruction on rabbit breeding, raising, and slaughtering. Second, Juhudi helps connect the rabbit farming groups with one another. For example, members of the Alpha Option Rabbit Breeders and the Alpha Option Rabbit Fatteners, two loan groups work together on the various phases of rabbit raising, even sharing one “stud rabbit” between the two groups. Thirdly, bunny loans are a great starter loan for first time clients. A client can get started raising rabbits with 5,000-10,000 Kenya shillings ($62 to $124). For both first time and returning borrowers the assets that Juhudi finances act as an alternative form of collateral in case of default, reducing the farmers’ risk of over-indebtedness.  Here’s what one of Juhudi’s rabbit farmers had to say about his experience:

Q & A with Quintino Maina Waithaka, member of Alpha Option Rabbit Breeders Group

Were you raising rabbits before you received your loan from Juhudi? Before my loan, I was raising a lower quality breed of rabbit. Now I raise giant Flemish rabbits, which can grow up to 7-9 kilos  With my loan of 10,000ksh, and a bit of my savings, I bought 5 Flemish rabbits for 3,000Ksh each. The smaller breeds of rabbit cost about half the price but they earn a much lower return at the market.  Flemish rabbits are large enough to sell at the market in 6 months and I can get up to 46,000Ksh ($568) for 1 giant rabbit, or I can sell the rabbits for breeding after 2 or 2.5 months. Before rabbit farming I just kept cows and chickens. Rabbits are much more profitable, and they’re easier to raise because they don’t take up much space and they eat a lot less food.

What have you found most challenging about breeding and raising rabbits? In November, 21 of my rabbits died; I lost of lot of money. I learned from the agriculture officer and a more experienced rabbit farmer that they got too cold. Now I built covers for all of their cages.

You seem to really enjoy the rabbits. Have you gotten attached to any and been unable to sell or slaughter her? Ha! Well, there’s one who has a good character. She was very tiny before so I named her Kanini, which means “little one” and I kept her as a pet.

How would you like to expand your rabbit farming in the next several years?  Will you request another loan from Juhudi? I will build the house of rabbits! I want to build multi-story cages for the rabbits. In the future I’d like to request a loan to buy a water tank for the rabbits, which will allow me to take care of many more rabbits – I’d like to have up to 100, right now I only have 9. I have 6 kids, the youngest is 6 months, and the eldest is 22 years old so I’m just trying to grow my income as much as possible. I always have lots of projects in mind for how I will continue expanding my business.

At the moment,  Juhudi’s rabbit farmers are not posted on Kiva, but they hope to add some in the future.  Watch out for the giant rabbits (and their owners) on Kiva. In the meantime, make a loan to one of Juhudi Kilimo’s clients today!

To learn more about Juhudi Kilimo check out their partner page on Kiva here or watch this short video that explains more about how this innovative organization works.

Tara Capsuto is a roaming fellow in Nairobi, Kenya nearing the end of her 6-month Kiva fellowship. When she’s not interviewing rabbit farmers she’s eating as many delicious Kenyan mangoes as possible before leaving the country.

Only 4 million Kenyans have bank accounts. Over 10 million people – approximately 40% of the adult population — in the country now use the M-PESA money transfer service. The rapid growth of mobile payments in Kenya in recent years has been hailed as the key to unlocking financial access for millions of unbanked individuals. While mobile payments are transforming the financial landscape in Kenya, especially for the unbanked, experience at KADET (Kenya Agency for Development of Enterprise and Technology), one of Kiva’s MFI partners in Kenya, highlights that there are also real challenges to making mobile money transfers work for an MFI and their clients.  Illiteracy, human error, and fraud are all factors that make mobile payments more complicated than they sound initially.

What is M-PESA?

“M” for mobile, “pesa” means money in Kiswahili. M-PESA is a mobile phone-based money transfer service, designed to enable users to complete basic banking transactions without the need to visit a bank branch. M-PESA customers can deposit and withdraw money from a network of agents that includes airtime resellers and retail outlets. Here’s a short video from the Consultative Group to Assist the Poor (CGAP) explaining how M-PESA works.

Mobile payments at Kenya Agency for Development of Enterprise and Technology (KADET)

KADET started piloting mobile repayments in April 2009. By the end of 2010 nearly half of their clients were making loan repayments and savings deposits using M-PESA. Previously, KADET’s clients had to make payments at a bank branch where KADET holds accounts in order to make repayments – which could entail up to one day of travel for groups located in remote areas of Kenya. In the future, KADET plans to expand the suite of services they offer to their clients using mobile banking, like providing loan approval via SMS, offering loan disbursements via mobile money, and sending repayment reminders by SMS. But such advances do not come without challenges.

Why mobile payments are not as easy as they seem

• Fraud: Although less paperwork can be more efficient for credit officers, the fact that clients don’t get a paper receipt from a bank, just an SMS, can be problematic because they can easily be forged. KADET has had a few problems with fraudulent SMS receipts. (note: these isolated cases were not Kiva clients and each of the cases have been rectified KADET).
• Client resistance to change: Many clients feel more comfortable with tangible, paper evidence that they’ve paid and have opted for the reassurance of a paper receipt from a bank over the convenience of using M-PESA.
• Illiteracy: M-PESA is only available in Kiswahili and English. For illiterate clients or those only comfortable speaking in their local dialect, this means they must rely on fellow group members to make M-PESA payments on their behalf. This has caused some conflict when the literate client does not make the payment on the other person’s behalf. Groups often pool their savings deposits together in one M-PESA transaction so they only have to pay the M-PESA fee once. This has similarly caused some conflict within groups.
• Human error in inputting KADET’s business number or the client’s account number, has resulted in the client’s payment going to another business, the payment being credited to another client, or nonpayment
• Mobile repayments can hurt group attendance: Initially mobile payments caused a drop in group meeting attendance. Credit officers had to reinforce the importance of meeting attendance, in spite of mobile payments, and KADET has been able to reverse this trend.
• Client repayments are not always accessible in real time. The M-PESA website requires a ^3rd party certificate from Vodacom, which can take up to 1 day to obtain. This means a client could repay a day before their group meeting but the credit officer can’t actually see that the client has repaid.
• M-PESA is not easily compatible with internal systems. Data from M-PESA cannot directly be imported into the management information systems (MIS) at MFIs. For KADET, this means all payments made through M-PESA have to be manually input into their MIS, another opportunity for human error to affect the process. A number of start-up companies have developed bridge software to move data from mobile providers to MIS systems but most MFIs, including KADET don’t have this yet.

The benefits are hard to deny

• Outreach to rural areas. Most of KADET’s clients are located in rural areas. Even small villages have an M-PESA agent, though they may not have a bank branch. This means some loan groups save up to a full day of travel to a bank areas (most of KADET’s clients are located in rural areas).
• Delinquency management: Credit officers can demand repayments in real time, saving follow-up visits to the client in arrears.
• Efficiency in repayments. Mobile payments reduce the time it takes for client repayment data to be input into the MIS: many of the offices in remote areas would use a courier service to send all repayment receipts to main offices. This also reduces the amount of paperwork that can potentially be lost.

Many of the challenges KADET faces sound more like growing pains than real game-stoppers. While it’s clear that there are challenges to be overcome, mobile money will continue to reshape the world of microfinance.

Interested in reading more about mobile banking? There is a growing body of literature examining mobile money in Kenya. Here are 2 very informative articles:

1. Mobile Banking Changing Kenya’s Society (Source: Microfinance Hub)
2. Glimpsing the Future in Kenya (Source: Center for Global Development)

Tara Capsuto is a roaming fellow in Kenya, focusing on social performance monitoring at several of Kiva’s field partners. She is looking forward to spending the final weeks of her fellowship criss-crossing Kenya in matatus, working at 7 of KADET’s remote branch offices — no doubt seeing the places where mobile money transfers are most beneficial. Make a loan on Kiva today!

Relations between the north and south have historically been strained, not least because of the racial and religious divide between the two. At the time of independence in 1956, the mainly African, Christian south fought against the Arab, Muslim north for greater autonomy. After decades of civil war, the two sides signed a peace agreement in 2005 which provided for this year’s referendum on secession. Although the referendum has been certified by international observers as largely free and fair, the vote has not occurred without disturbance. Recent violence in the oil-rich territory of Abyei has resulted in the deaths of 33 people.

As a close neighbor, Kenya is keeping a watchful eye on the result of the referendum. Over 15,000 Southern Sudanese live in Kenya, where “overseas voting” has taken place. Economic interests are also at play, as Kenya has invested hugely in the South, in sectors such as telecommunications, banking, and construction. The Kenyan government has even invested over $5 million USD in Southern Sudan since 2005, including support for training of the country’s civil service.

Official results of the vote will be announced mid-February, which could result in the splitting of Africa’s largest nation and independence for a region long beset by war. Sudan, Kenya, and the world will be watching closely to see what happens.

Jenny Coronel is a roaming Kiva Fellow based in Nairobi, Kenya. Click here to learn more about the Kiva Fellows Program and apply.

Around the world, Kiva Fellows are celebrating the start of 2011 in all sorts of different ways. Here’s what some KF13-ers are doing to ring in the New Year.

Enjoy and Happy 2011!

Ellen Willems, Ecuador

Ecuadorians, as I was told, celebrate the coming of the New Year, and more importantly the going of the “Old Year” by making “monigotes”. These are dolls made of old clothes, stuffed with newspapers or sawdust and sometimes with fireworks as well. They have masks made of papier maché. The monigotes represent the “Viejo” or Old Year and all the bad things that happened during that year. On New Year’s Eve these monigotes are burnt in the streets.

New Year’s Eve, as well as Christmas, is a holiday that is mostly celebrated with family. And traditionally all the family members work together to make the monigotes. In San José de Chimbo, the small mountain village where I am currently living, a judge, accompanied by the local band, goes around town to look at all the monigotes and to select the three most original ones.

Cooperativa San José will close its doors early on Friday and kick off the New Year’s Eve festivities with an office party and its own monigote. I am sure that for me 2011 will start with a Big Bang because San José de Chimbo is known throughout the area as a mayor fireworks producer!

Ellen with monigotes at Cooperativa San José

Betsy McCormick, Colombia

Two fun Colombian traditions to speak of:

1. People in Medellin wear yellow underwear on New Year’s Eve because it’s supposed to bring good luck.

2. At midnight, people run around the block toting empty suitcases behind them. This is supposed to bring travel in the new year.

Abhishek Banerjee, Armenia

New Year’s Eve, similar to Christmas, is a holiday celebrated mostly with family. I have been told that generally, families get together for NYE to eat and drink. However, after midnight, many families then leave home and go visit their friends and neighbors, eat and drink some more and occasionally burst into dance. As a country that stays up into the late hours of the night quite often, this doesn’t surprise me.

On a side note, Armenians follow the Gregorian calendar and their Christmas falls on the 6th of January. As a result, 30th Dec – 10th Jan is basically the time off for all offices and banks. SEF will also be closed till the 10th of Jan.

Personally, I am taking this long break as an excuse to fly out to Europe and ring in the new year with some old friends!

Julie Shea, Bolivia

Bolivians typically eat New Years Eve dinner with their families, after which the young people head off to parties with their friends. At midnight they eat 12 grapes each, presumably to represent each month of the coming year. Echoing the Colombian traditions (above), many people will walk around the block with a suitcase, which is supposed to bring travel in the new year. The women wear red underwear if they want love in the new year, yellow underwear for money. At 6AM when the parties are ending, everyone goes out for Fricasé, a traditional pork dish.

Tara Capsuto, Kenya

Christmas and New Years is a time when many Nairobians pack into overcrowded taxi-vans and buses and head home to their villages – where they have their ancestral roots — to celebrate the festive season with family and friends.  Rising urbanization, especially over the last 30 years spawned the tradition of going home for the holiday. The capital city, renowned for terrible traffic, literally emptied out by December 24th. For both Christmas and New Years the tradition is to slaughter and roast a goat, which can be bought for 3,000Ksh ($37USD), or selected from the pasture for those families fortunate to have their own shamba (farm in Kiswahili).  I’ll be celebrating New Years in Zanzibar, Tanzania with some new friends!

Nick Hamilton, Dominican Republic

Dominicans celebrate New Year’s Eve in the same way that they celebrate Christmas, which is actually celebrated on Christmas Eve. It’s a time for families to get together and sit around a dinner table feasting on meat, rice, meat and more meat. Once they have seen in the New Year the young at heart will then go out and party until the early hours.

Having spent Christmas with my host family, I actually travelled to a beach resort called Cabarete with some friends and saw in the New Year there. We were a group of Argentinians, Italians, Dominicans and a Brit (that’s me) and so we actually celebrated New Year four different times for each country over a 5 hour period, which was lots of fun!

Amber Barger, Mongolia

Mongolians traditionally ring in the New Year during the last two weeks of December. Each evening, different organizations hold their annual New Year’s parties to celebrate achievements during the past year and to create a sense of motivation and community for the next year. Christmas and New Year celebrations are commonly thought to be the same holiday by many Mongolians. At New Year’s parties you’ll find Santa Claus and his scantily-clad snow girls playing silly games. The attendees will be charmed with an intertwining of live singing, dancing, and award –giving. All of this entertainment plus alcoholic beverages and dinner are included in the usual entry fee averaging anywhere from $25-85 USD per party. If you’re involved in many organizations, you’ll be expected to attend multiple New Year’s parties each year. Ladies are sure to wear their glittery dresses and men wear their nice suits or traditional deels.

On the actual New Year’s Eve, though, it’s a family affair, as it’s a common view that if you aren’t home with your family on New Year’s Eve, then you won’t be home for most of the next year. The President of Mongolia normally gives a speech around midnight and the family members gather around the television to watch this.

Santa and his elves

 More often than not, poverty is the result of circumstances difficult to change. Although people can be very resourceful in making the best of what they have, the trap of poverty is difficult to escape. On numerous occasions in Rwanda I met a young person with the desire and intellect to attend school. Yet he or she simply did not have the resources to pay for it. Alongside poverty, tremendous amounts of potential exist.  This potential can and must be harnessed.

Kiva presents a novel lens through which to view development. Simply contemplating the concept of “world poverty” can be discouraging and overwhelming. However, Kiva addresses this by allowing us to connect with others on an individual level. A loan through Kiva is an investment, in a business and an individual. It can provide the small push someone needs to make use of available resources for their business to become self-sufficient. Investment in a business translates into investment in other areas of life, including the opportunity to educate one’s children.

 My trip to Rwanda made it clear that poverty is not the result of an individual’s unwise choices; it is the result of larger circumstances which can be changed. Loans provide someone the chance to overcome these conditions. During my brief time in Kenya as a Kiva Fellow, I have seen the gradual, yet fundamental, change which can occur as a result of microcredit. Through financing a loan on Kiva, we can help to wear away at the roots of poverty with effects that will be passed on to future generations.

To provide an entrepreneur with the financial foundation needed for their business to expand, take the chance to make a Kiva loan today.

Or, learn more about becoming a Kiva Fellow.

Jenny Coronel is a roaming Kiva Fellow based in Nairobi, Kenya, where she is attempting to pick up a bit of Swahili.

Kenyans breathed a collective sigh of relief on Dec 15^th when the International Criminal Court (ICC) announced the much anticipated list of Kenyan leaders suspected of organizing the violence following the disputed 2007 election that left 1,200 Kenyans dead and an estimated 500,000 more displaced from their homes. The list of 6 includes senior public officials like the Deputy Prime Minister and Finance Minister, Minister of Higher Education, and the Head of Civil Service. Many questions remain as to whether this particular course of justice is the right one, but here’s what 8 Kenyans had to say about it.

The disputed 2007 election was largely drawn along ethnic lines between supporters of Kenyan President Mwai Kibaki (a Kikuyu) and opposition leader Raila Odinga (a Luo). The conflict ended with a power-sharing deal, with Kibaki as President and Odingha as Prime Minister.  Local members of Parliament have so far blocked efforts to set up a local tribunal to try those individuals who orchestrated the post-election violence so justice is being carried out at the ICC. One key indicator that this was the right decision? It’s calm in Nairobi. There were some isolated protests by supporters of the Deputy Prime Minister in Uhuru Park (the main park in the center of Nairobi) following the ICC  announcement, but as one staff member at one microfinance institution (MFI) put it, “If there is no noise from Kibera, no noise from Githurai [two of Kenya’s largest slums], then things are calm.”

“I am proud of Ocampo [ICC chief prosecutor Luis Moreno-Ocampo] and the ICC. We have to start somewhere. I was directly impacted by the post election violence. I was living in Kikuyu land and I am a Luo. I had to seek shelter for 2 weeks. People I grew up with turned against me. We cannot just move on and pretend that didn’t happen.” – loan officer

“It would be good if we could try them here in Kenya. I think it’s humiliating for our country that we can’t try our own people but it is good that they will be tried somewhere at least. Politicians often think they can get away with anything. Maybe this will show them they can’t.” – Taxi driver

“Kenyans often don’t follow through with what we start. I hope we can follow this through to prosecution.” – MFI staff member

“If you and I have a dispute there should be a third party arbiter. The same thing applies here. If the trial was here it would be all about tribal divisions. You saw when the announcements came [about the 6 people to be tried at the ICC] there was no violence. I’m not sure that would have been the case if we were going to try them here. The ICC is this amorphous thing far away from here. We need that.” – MFI staff member

“Let them go to the ICC! Tara, you are a nice lady, but if you are a criminal then you should go to court. If they go to a local court nothing will happen. Moreno is doing a very good job. He’s the best thing to happen to Kenya in a long time. Even if only 3 of the 6 are jailed it’s better than nothing.” – MFI client 1

“‘Gwinkunya gutu’” as we say in Kikuyu. The politicians must learn that we are watching them and they will be punished” [literally means “to pinch one’s ear”]. –  MFI client 2

“Even if some of them are proven innocent, going through the process of inquiry is important. There are still a lot people who were involved who are not on the list.” – MFI staff member

“It’s good to see Obama supporting Kenya on this. Can you send him over here?! I think we should borrow your president to help with our politics.” – loan officer

The Court’s announcement will ultimately have major ramifications for politics in Kenya, with the accused from both parties still holding high-ranking political positions. Where the country’s divisions are most evident at the moment is in Parliament itself. Several MPs have demanded that Kenya withdraw from the ICC while others have called on the government to help finance the legal fees of the six post-election violence suspects.  Another obvious remaining question is whether the accused should resign from their government posts. All of this amounts to a great deal of uncertainty as to whether the ICC announcement will ultimately lead Kenya to greater political stability. The past week, however, gives Kenyans reason to look forward with cautious optimism.

Tara Capsuto is a Fellow in Nairobi, Kenya working with four of Kiva’s MFI partners: Faulu Kenya, KADET, Juhudi Kilimo, and SMEP.  Support Kenya’s stability from the ground up by making a loan today.

When I landed at Jomo Kenyatta International Airport in July, I was determined to learn, absorb, and live like a Kenyan. It turns out this wasn’t the most realistic goal given barriers like the timeframe of 90 days and the whole mzungu factor. But I tried anyway.

My approach

I threw myself into the daily routine whenever possible. I commuted in matatus, picked up some Kiswahili, bought my daily liter of maji from the “cat lady” at the neighborhood kiosk, and chatted with some real characters. Over the past four months, I’ve gained invaluable insight into multiple realms of Kenyan society. The Kiva Fellowship is truly special in that you are exposed to and a part of various populations within a society—from behind a desk in the MFI’s office, to conversing with a Kiva Borrower at her kuku coup, to chatting with expats over a few rounds of Tusker.

As a foreigner in a foreign place, I often wanted to turn to an imaginary friend and say, “hey, did you just see that?!” Eventually the details that, perhaps, once seemed strange, illogical, and sometimes frustrating became the norm and barely registered as a blip on my culture shock radar. Such instances included frequent power outages, drinking hot chai in 80 degree weather, and quickly moving aside while buying bananas from the local fruit vendor to escape a camel stampede.

For me, it took time, patience, and repetition until a newfound comfort manifested itself into instinct. Below are a few examples of common experiences that aided my cultural assimilation.

Uganda and Rwanda

Kenya and Tanzania

World Map

Over the past 12+ weeks I have…

Consumed 4,107 beans

Lucky for me, a vegetarian, beans are a staple food in coastal Kenya and are dressed in a few different forms: There’s bahazi for breakfast (cowpeas with coconut sauce), maharagwe (red beans) accompanied by sukuma wiki (kale) and chapatti for lunch, and then more maharagwe for dinner.

Ridden in 333 matatus

Matatu to work. Matatu to dinner. Matatu to Tanzania. I’ve logged long hours on these colorful (literally and figuratively) 14-passenger minivans that are the most popular way to get around. You know you’re becoming a local when you hop aboard and think, “Wait a minute, that disco ball and that Bob Marley poster look familiar. Must have been in this one before.”

Attended 2 weddings

Major thanks to my Kenyan rafikis and coworkers for inviting this mzungu to some great parties—singing and dancing and colors, oh my.

Completed 9 workplan items

Sorry to break it to you, the Kiva Fellowship is not an extended vacation. Each fellow is assigned a “workplan” that outlines and prioritizes his or her time in the field. On an average day, I worked from 7:45 am until 6:45 pm creating reports and conducting trainings to assess and build upon the Kiva program at Yehu.

Traveled 19,443 miles

I’ve been on the go since the end of KFP Training Week and have traveled via: boda boda, bus, matatu, car, dala dala, ferry, tuk tuk, airplane, dhow, sailboat, and my legs. While all this travel has led to some pretty exhausting moments, it’s empowering to reach a point where you are knowledgeable about and feel comfortable with traveling solo around East Africa on public transportation. These moments “on the go” have yielded invaluable cultural insight.

Met 23 Kiva borrowers

While I spent most of my fellowship in the office, I did have the opportunity to spend some time in the field conversing with Kiva borrowers. Tagging along with credit officers and visiting a client at his or her place of business added a new dimension to my understanding of microfinance through hearing clients’ stories and experiences.

Heard mzungu 3,584 times

Yup, I’m a mzungu. I learned this Kiswahili word even before “habari?” or, “how’s it going?” While this word may seem difficult to remember, someone will be sure to remind you very soon if you fit the description. Mzungu is used in a whole host of settings. Macho men shout it seeking a smile. Shopkeepers yell it to grab your attention. Coworkers employ it as a useful means of identification, like any other basic characteristic. And Watoto (children) scream it and nearly spontaneously combust with enthusiasm if the mzungu waves back.

Ridden 1 ostrich

That was fun.

Ostrich Ride, Nairobi

Maharagwe and Sukuma

Bride and Groom's Arrival, Kenya

Dhow, Zanzibar

Katie Morton (KF12) would like to thank her East African rafikis for an incredible experience in Kenya! Check out Yehu’s currently fundraising loans and its lending team.

Nestled in the hills of Kikuyu farmland, 500 of Faulu Kenya’s dairy farming, matatu driving, and kiosk-owning clients gathered for a half day of telling their microfinance institution (MFI) what they really think. Faulu Kenya’s mission statement is, “To listen and empower Kenyans by providing relevant financial solutions.” Faulu, whose name means “success” in Swahili, is one of Kenya’s largest microfinance organizations, serving over 230,000 clients.  How do they make sense of the cacophony of 230,000 voices? I got to see it in action at one of Faulu’s  “open forums” held annually at each of their 29 major branches.

Faulu invites 3 clients from each loan group (10 to 25 clients) to ask questions, provide feedback, get updates on new products and services, and receive additional training on anything from group governance to how register for Faulu’s new payments system through M-Pesa (a mobile phone-based money transfer service), which was the topic at the meeting I visited in Kiambu, a city just north of Nairobi. In a mix of Swahili, Kikuyu and English, information flowed in 3 directions throughout the course of the day:

1.       Faulu –> Clients

Clients register for mobile payments

Faulu’s staff shared important updates with clients, like modifications to loan products and how to register for mobile payments with M-Pesa. Hundreds of clients pulled out their mobile phones and registered to receive and repay their loans. In 2009, Faulu became the first deposit-taking microfinance institution (MFI) in Kenya, allowing its clients to open savings accounts that link to their loans.

2.       Clients –> Faulu

Clients provided direct feedback to Faulu on the products and policies and gave input on what skills they want to learn and what crops they want to plant. (Faulu provides linkages to technical trainings for clients, based on their specific demands). Clients also inquired about the loan insurance policy, and asked pointed questions about interest rates and repayment terms. Some questions Faulu’s staff was able to respond to in real time, others like “Can you lower interest rates?” would be discussed amongst management following the 29 open forums held across the country.

Leaders from top-performing groups share their tips for success

3.       Clients <–> Clients

The most intriguing aspect of information sharing was amongst clients. In addition to informal exchanges during breaks and over lunch, a group of clients from Faulu’s most successful groups had a round table discussion during which they shared their secrets for success with the broader group. One group leader suggested, “Our group makes payments before they are due,” another advised, “We have a very strong constitution that we follow to the letter.” With the guidance of a loan officer, each of Faulu’s groups drafts a constitution outlining group members’ roles and responsibilities. One group leader explained, “We very carefully calibrate the loan amount to the member’s expected income. If she has 5 cows that produce 100 liters of milk per day, and she receives 30KES per liter (about $.37), we make sure her loan amount corresponds to how much money she can probably repay based on the price of milk.”  (Faulu’s solidarity group members do an initial assessment of each member’s loan request amount and secure each others loans).

I spoke with several clients and asked them about their insights from the day.

Treasurer of her group, Naomi had just applied for her second loan with Faulu to buy more livestock. “I will go back and tell my group that we can be rewarded for paying on time and having good attendance,” she commented. [Top-performing groups received file boxes for keeping group documents] “I also like this idea of being very organized and having a strong constitution.”

Naomi, pictured with loan officer Emmaculate

Chairman of his group, Peter was pleased with the advice he received from other clients. “I’ve only been a member at Faulu for one year.  I spoke with people who have 5-10 years of experience doing this. They told me to be sure I use my loan for what I said I would use it for. Also, they advised to grow the size of my group so if someone defaults there are more people to help pay back.”

Peter

Alice, Elizabeth, and Joseph have been in a loan group together for 3 years. They all registered for M-Pesa accounts and were looking forward to showing the rest of their group how to register.

Alice (Secretary), Elizabeth (Chairlady), and Joseph (Treasurer)

Kiambu branch manager, Lilian

When asked why it’s important for Faulu to hold forums like these branch manager Lilian Kasanga replied simply, “Because we want to be relevant! We cannot provide relevant financial solutions unless we can really hear what clients want and need. We’ve had ideas for new products and modifications to existing products come out of these forums.”

Head of Business Development, Mary Munyiri added, “It’s important for clients to be able to express themselves and say whether we are serving them well and in what ways we may not be. The group members who are invited are representative leaders, their role is to express the issues for the entirety of their respective groups.”

While open forums can be an important component of soliciting client feedback, this format is probably not a stand-alone solution to gauging client needs. Faulu also conducts extensive focus groups and client satisfaction surveys. Within its toolkit of client feedback, open forums are an invaluable opportunity for Faulu to hear directly from clients, and it’s true: how can you provide relevant financial solutions unless you know what clients consider relevant?

Make a loan to an entrepreneur in Kenya today!

Tara Capsuto is working with 4 of Kiva’s field partners in Nairobi, currently wrapping up a short but action-packed 3 weeks at Faulu Kenya.

I’ve spent the last few weeks traveling down dirt roads, through alleyways, and aboard boats to better assess and develop knowledge of the Kiva-Yehu Partnership at the branch level. Throughout this experience I learned that navigating the field is somewhat like a treasure map. Minus the map part. Here’s a brief overview of my last day in the field in which I was sent to meet with a client on an island off Mombasa’s south coast. Sounds like fun, right?

The borrower is wapi?

I was given these directions, a timeframe of an hour and a half, and a “good luck.”

1. Head to the matatu stage: Walk down the boda road (an unofficial route turned quasi commercial as a result of heavy motorbike usage), pass underneath the big pink billboard with a cell phone advertisement, and cross the highway
2. Board a matatu to the Likoni Ferry
3. Take the ferry across the channel (Mombasa is an island)
4. Walk up to the matatu park and catch another one to Msambweni
5. Get off the matatu at Yehu’s branch (near the Police station, start looking for it after about 90 minutes)
6. Meet up with the credit officer at the branch
7. Travel by boda to the shore and board a local hotel’s ferry to Funzi Island
8. The borrower will be meeting with her center group near where you will dock
9. Ouila! Now, how to get back home…

Detour

So here’s what actually happened. I made it through steps one through six without any significant problems. Salim (the credit officer) and I managed to rendezvous on the side of the unnamed road after my 90 minute matatu ride. We hopped into another matatu, then onto some bodas, and finally made it to the shore, where we learned that we had missed the boat to Funzi Island.

Turning back was not an option. It was my last day to meet the client and we had arranged a time and place to meet. So we scoured the shore for other boats. Aside from the few fisherman out to sea, the only other ship was propped up on shore as workers repaired and repainted its hull. Hmmm…

We befriended a local fisherman who agreed to ferry us over in his dhow (a canoe built form a hollowed out tree trunk). I sat on a log while Salim and the fisherman paddled for about two hours. Once we arrived on shore, our new rafiki led us on a two kilometer trek through brush, mangrove swamp, and beach. We finally made it to the clients who were awaiting our arrival at the group meeting center. Salim introduced Kiva to the group of women and we interviewed a client, Mwanaache, who would become the very first Kiva borrower at this particular branch.

Expect the unexpected

The moments spent away from my desk are best characterized as an arduous adventure that consists of my greatest triumphs and travails as a Kiva Fellow. The best piece of advice I have is to expect the unexpected. Things will be going great. Then something will happen and it’s time to readjust the plan.

I had spent most of my day traveling to meet with one group and speak with one Kiva borrower. Although the tangible benefit may have been minimal (I collected information for just one borrower’s story), the journey expanded my knowledge of and assimilation to the people and places that surrounded me. And I didn’t have to wear my shoes for the entire day!

At the end of the day, I boarded my final matatu exhausted but fulfilled. I slouched down in my seat ready to settle in for a long ride. The conducta slammed the door shut. With a crashhh, the entire door (severed from its hinges) landed on the cement of the highway. Time to readjust the plan. Some passengers tied it to the exterior of the vehicle with a few strands of twine. The jerry-rigged solution left the entire doorway open which created, aside from the safety hazard, a refreshing breeze that replaced the stuffy humid air with that of the cool dusk. For the first time since I arrived in Kenya, I sat through the entire ride without anyone trying to close my window.

Katie Morton (KF12) recently completed her fellowship in Mombasa and is off climbing Mt. Kilimanjaro. Check out Yehu’s currently fundraising loans and its lending team!

A perk of the Kiva Fellowship is having friends who live and work in diverse locations around the globe. After a few months in Kenya, I decided to take advantage of this network of colleagues and visit a KF12 classmate in Kampala. This is the latest chapter in the Only as a Kiva Fellow novel that I’m constantly writing in my mind.

Sarah’s First Rafting Experience

It all started when rafting down the Nile on my first day in Uganda. My original vision of this river (a tranquil body of water upon which Ancient Egyptians rowed boats through reeds and past the occasional crocodile) was quickly revealed to be egregiously misinformed.

Beginning at the river’s source in Jinja, we paddled (and sometimes unexpectedly swam) for 30 km through more than 12 advanced rapids. The first few bumps were great. We paddled. Ducked. Paddled some more. What fun… until we learned some interesting facts about our guide: it was his 11th day on the job, he couldn’t swim, and his main qualification was his background as a fisherman. Hopefully he’s a quick learner? No luck.

I reached my limit when stuck underneath the capsized raft while cruising down a Class V. Sarah’s moment of terror occurred as we free fell down a 20 foot waterfall while the guide shouted “I love you, Sarah!;” and he was somehow the only member of our 8 person raft to fall out and then blamed sweet little Sarah for pushing him off. Don’t worry, he’s fine. A safety boat scooped him up and brought him back to us.

We opted not to purchase the photo pack, so the only memento from the day (other than living another day to tell the tale) was Sarah’s first degree sunburn.

Rwanda Time

After recovering from our first epic adventure and a few days of work in Kampala, Sarah and I took off for the Rwanda-Uganda border by boda.We soon found ourselves in a futuristic world marked by aliens in green helmets, stoplights, and peg-legged rastafari dripping with dreds who concurrently knocked on their prosthetic limbs creating a makeshift drum circle of sorts. Let me explain.

Rwanda can be summed up in two words: safety first. The streets of Kigali operate with logic and standard that restores a mzungu’s comfort in crossing the street. Ann, Sarah, and I stood on the sidewalk (yes, slabs of concrete line the roads meant for pedestrians only, real sidewalks) mesmerized by the painted lines on the road, stoplights above, and the traffic that actually adhered to them. The intuitive orderliness and efficiency of the Western world had all but evaporated from my habits and mind until suddenly and unexpectedly confronting them in Kigali.

Since 1994, the RPF has worked to instill a stable law-abiding society, or at least one that appears that way to an outsider and weekend tourist. The government is so serious about these reforms that even President Kagame can be found picking up trash outside his home on the third Saturday of the month (a mandatory national rubbish collection day).

And the rastafari? Turns out the proceeds from our hostel fund an on-site prosthetics workshop.

The Odyssey Continues

So you think the story is about over? So did we. After stopping by an “exploding lake” that sporadically produces bursts of CO2 and methane (a lethal combination that asphyxiates all living creatures in the vicinity), we resumed our epic migration back to Uganda with 16 hours remaining until my flight departed. The task was simple and timing realistic but we failed to account for the typical unforeseen obstacles that would belabor our return.

As the lone mzungus, Sarah and I charmed our way onto a bus headed back to the promised land of Kampala. Unfortunately, it was packed beyond capacity. No seat? No worries. We joined the other 10 plus seat-less passengers on the floor, squashed and smelling like sardines in a tin can. And that is where we remained for the next 9 hours, watching Tanzanian rap music videos as the vehicle waded through floods, dangled atop cliffs, and bounced over the unpaved “road.”

Eventually we transferred to another bus where I stretched across a row of seats and a pool full of an unidentified liquid. Sleep at last—or so I thought. An old Mama came aboard, nudged me out of my prime seat space, snuggled her face into my thigh, and snored like a beast. She seemed pretty content for the next 8 hours. Oh well, at least we had seats this time.

Sarah and I said our groggy goodbyes around 3 am as she hopped off in a dark town where she was scheduled to meet a Kiva borrower the following day. I was left alone with the snoring beast on my lap.

Exhausted Yet? Me Too.

I definitely did not make my flight. After wandering like a zombie from one airline office to the next, I caught the next plane out, ran to the Karen Blixen Museum during my layover in Nairobi, and rushed back to the airport.

After learning of my flight’s delay, I hunkered down at the terminal’s only café and feasted on overpriced hydrogenated goods, caffeine, and maji (water). This is when I realized I hadn’t eaten anything for the past 30 hours (we went into survival mode on the bus and adhered to a motto of “dehydration or bust”) and I was one step closer to making it home and passing out underneath the ethereal gauze of my bed net.

It was back to the office as usual the next day.

Katie Morton (KF12) is glad to be back at the Yehu office after an epic adventure in East Africa. Check out Yehu’s currently fundraising loans and its lending team!

Good Morning, 2Pac

A ma-what-now?

Like most Mombasans, I travel around the island by matatu. These fourteen passenger vans function as the local transit system but experience more like party buses. They’re the most affordable way to get around and while they are also prevalent in other cities like Nairobi and Dar es Salaam (known as the dala dala in Tanzania), Mombasa has its own special breed.

Here, just standing on the side of the road can be a bit overwhelming. Matatus fly past in a rainbow of colors (fuchsia, orange sherbert, lime green). Men shout. Goats run for their lives. If this scene isn’t distracting enough, the matatus’ flashing LED lights and supersized decals with phrases like “Bend Over” and “Sugarbabe” may catch your eye.

A Mombasan matatu assumes the personality of its owner. He or she decorates, or “tricks out,” the vehicle from the inside out in regalia of his or her liking. While each is unique, there are a few common themes: athletic teams (like the English Premier team Arsenal or the Georgetown Hoyas—I still can’t figure out why), religion (both Christianity and Islam have a large following here so you may see “Come Lord Jesus” or “Allah Barik”), and musical genres (Bob Marley and Reggae or Young Weezy and Hip-Hop). Here are some quick pointers about how to get around on a matatu.

Conducta Scours for Passengers

Step one: Finding the right bus

My first piece of advice: don’t pay much attention to the theme. There’s no rhyme or reason. Instead, know where you’re going and listen up. Matatu maps don’t exist (and they definitely won’t be posted at your local bus stop) so your best bet is to listen to the conducta—he’s the guy in red shouting really loudly (the equivalent of a ticket collector). If you want to go to the Central Post Office, for example, listen for “posta”  which sounds more like “postapostaposta.” You’ll also hear other main destinations like “fedydedyfedy” (ferry), and doxxxdoxxxdoxxx, (docks or the Kenyan Port Authority). It takes some time to decipher these sounds, but it’s pretty easy once you get the hang of it.

Step two: The ride

When you’re ready to embark on your journey, leave behind all attachments to safety, standardization, and personal space. The vehicle will start to move before your last leg is off the ground, you will be smashed against strangers, and the conducta may ask for your hand in marriage.

During the daily “jam” (rush hour traffic), the inside of a matatu becomes its own form of jam as many more than 14 passengers pile into (or are hanging out of) the vehicle. The most I’ve counted was around twenty-two full sized people (note: this is an estimate based on visible limbs). When I entered the matatu, the conducta urged the three plump men seated in the front row to move over kidogo, or just a little bit, so I could squeeze in. That was fun.

Once you’ve made it in (and are hopefully sitting next to a functioning window), enjoy the ambiance. Every matatu ride is a grab bag, you never know exactly what it’s like inside and what may transpire during the course of your route. Look around at the posters of Alicia Keys, Chris Brown, and Avril Lavigne. Check out the degloo mantras like “If u lonely n need a woman, prez here —> [],” “If the music is 2 loud then UR 2 old,” and “Why worry? Telephone God in prayer.” Bounce to the beats of genge or kapuka (Kenyan rap music), Jamaican reggae, or some good old American classics like Ooosha (Usher) and Maria Cudi (Mariah Carey).

Don’t panic when the driver cruises into the lane of oncoming traffic or weaves around telephone poles on the dirt shoulder while playing a motorized leapfrog with other matatus. In Kenya, a two-way road easily becomes three and maybe even four lanes during rush hour. Also, be sure to have exact change. If not, you’re likely to fall prey to the “mzungu rate” in which foreigners unfamiliar to the fare are overcharged. It’s also important to keep moving. People are always hopping in and out and passengers are expected to keep moving toward the back so new passengers can make it in easily. Over the course of a ride, I often find myself migrating towards the rear in three rounds of matatu musical chairs.

The Usual Decor

Step three: Stop! How do I get off this thing?

Okay, it’s time to get off. The conducta may have shouted the name of the stop, but most likely you’ve looked at the window and realized you’ve arrived. How to signal that you’re ready to get out? Pull the cord? Press the button? Nope, just knock. Yup, two straightforward taps of the knuckles on the ceiling sends a reverberating sound which signals that someone wants to get out. Now to exit…start moving towards the door when you’re approaching your destination. The conducta will open the door and you’ll wait for the vehicle to stop. Most likely, it will not come to a full halt, rather you’ll be expected to hop out sky-diving style when it’s still rolling. Good luck and congrats, you’ve made it!

Ruff Luv: Dangerous

Culture in a Commute

My time in the matatu has taught me a great deal about what life is like on the coast. I’ve bonded with drivers, commiserated with passengers in a fender bender, been over charged, and given rides for free. I’ve seen and learned a lot. The Mombasan matatu serves as a cultural barometer of sorts. The music, images, and phrases from Western popular culture provide an insight to how the West is viewed and interpreted here in Kenya. I’ve also learned more about American rap artists in my daily commute in Kenya than I have in a lifetime back home. Thanks to this experience, I’m now well acquainted with the music of Lil Jon (and his Crunk Juice) and can match a face to the song. Off to ride a matatu!

Wheels Da Pimp Behind

Katie Morton (KF12) wears sunscreen everyday while working with Yehu Microfinance Trust in Mombasa, Kenya. It’s hot here! Check out Yehu’s currently fundraising loans and its lending team.

Brian is a University Chancellor in Fairbanks, Alaska, and has been lending on Kiva for nearly 5 years. With 3,046 loans, Brian has literally uplifted thousands of lives all over the world through micro-finance. Having a personal connection is crucial to our mission at Kiva, and so in thanks for his continuous support, one of the borrowers he has lended to has a very special video message for Brian.

Thanks for your ongoing support Brian! We think you are awesome.

Kiva love,
Brittany Boroian, KF12 with Faulu Kenya

The Task

One of my principal duties as a Kiva Fellow while in Kenya is to meet a subset of Kiva clients, ask them some questions, and compare these notes with the information on Kiva’s website and the field partner’s documentation. This process, known in Kiva-speak as the “Borrower Verification,” is a critical piece of the Portfolio Team’s risk and due diligence assessment. So my second week in Mombasa, I was off to meet 10 Kiva borrowers for this project.

The Incident

This story begins at 4:00 am when I awoke and started my journey to Yehu’s Samburu branch, a 90 minute bumpy bus ride from Mombasa and the most remote of the three branches where the Kiva model is currently implemented.

En Route and About to Breakdown Photo Credit: KDM

By around 8:30 in the morning I was aboard a motorbike traveling to meet the borrower. People and buildings quickly faded away as the branch manager, Juma, and I sped over hilly dirt roads into the rural agricultural land of the Kinango coastal province. This was my first true pikipiki (motorbike) experience, second week into the fellowship, and third meeting with a Kiva borrower. And yes, Mom and Dad, I wore a helmet.

After traveling for nearly an hour, the pikipiki felt heavy and slow– something was wrong. It turned out that one of the tires was punctured. Great. Now we were running behind schedule, the only living objects in sight besides a few stray goats, and without Triple AAA. Oh yeah, and there was no phone service. So we started to push…

The Hero

Luckily enough, we were on our way to meet Gilbert, who owns the only motorbike hardware and repair shop in the area.

Kiva Borrower and Yehu Branch Manager Repair the Pikipiki Photo Credits: KDM

After walking for some time, engaging in some Yehu chitchat, and picking up a mobile signal, we were able to get in touch with him and within minutes, Gilbert had arrived by pikipiki equipped with an air pump, tools, and lots of energy. Juma and Gilbert mended the tire well enough to get it back to Gilbert’s shop where it received a proper patch up. So we finally made it to Gilbert’s hardware store and after experiencing this Kiva borrower’s business firsthand, I was eager to hear more about his shop. Here’s what I learned:

Previously, Gilbert farmed maize and raised cattle but switched over to the hardware business a year ago. As the only hardware and repair shop in the nearest 30 kilometers, Gilbert is a very busy man. During our conversation, a constant flow of customers convened outside the store and visited for services varying from bicycle repair and pikipiki mending to spare part purchasing and even mobile phone charging. He took some time to meet with me but quickly returned to work, welding, selling parts, etc. to keep up with the high demand.

Gilbert used his Kiva loan, his first from Yehu, to increase the stock of supplies for motorcycles and bicycles—tires, tubes, spokes, and air pumps. Since receiving the loan, his monthly income has increased 250 percent and he has used the higher profit to make improvements to his shop and home life. He purchased solar batteries, powered by solar panels atop the store’s roof, from which customers can charge their cell phones for 20 KSH (25 US cents). Beyond the store, he has also used the new income to purchase clothing for his five children, pay their education fees (all of whom attend school), and make renovations to his home by adding on a bedroom.Click to view slideshow.

Reflections from the Field

Today was a good day. I traveled to a new place, rode a motorbike, and had a great conversation with a Kiva Borrower–all before noon.

While Gilbert has a thriving business, the success of which has transferred over into other areas of his life, I’d like to provide a disclaimer of sorts, a reality check. Based on my experience so far, microfinance is not a panacea or one-stop shopping from poverty to prosperity, rather it is a piece of a much larger puzzle. But I’d also like to note that Gilbert’s story contains some of the key components of microfinance success: a business-minded entrepreneur, market demand for his service, economic opportunity, a stable political and economic environment, among others. In Gilbert’s case, his puzzle pieces are falling into place and I enjoyed hearing about this process firsthand.

Katie Morton is a member of KF12 and works with Yehu Microfinance Trust in Kenya. After much confusion, she recently learned that “keti” is the Kiswahili phrase for “sit” and is unrelated to her similar-sounding name. Check out Yehu’s currently fundraising loans and its lending team!

I’m interested in microlending, Kiva, and social entrepreneurship because of what I’ve learned in the classroom and experienced while spending time abroad. One day I hope to build a career in sustainable economic and social development. I graduated from college a little more than a year ago with a degree in International Affairs and, like many recent grads, I had planned to hop from the pages of academia into the foothills of my career. Since then, I have learned that life doesn’t usually go as you plan—especially if you’re in the non-profit sector during a drastic economic downturn. So I’ve fought my way into this resource-barren field by utilizing every crumb of experience I could get a.k.a. I’m a professional intern. Really, I’ve had three in the past 9 months. One of which, was with the Kiva Fellows Program in San Francisco.

KFP Team courtesy of Eric Brandt. Interns up top: Caitlin, Tiphaine, & Me. Staff on bottom of the pyramid: Eric, JD, & Julie

My time at Kiva HQ expanded my knowledge in many ways, but most relevant to my fellowship is my understanding of Kiva as an organization. Over the past eight months, I became an insider to the organization’s four stakeholders—the lender, Kiva as an institution, field partner, and borrower. During my internship, I got to know the org’s dedicated staff members, in-office volunteers, and Kiva Fellows. While Kiva HQ is full of yoga balls, chocolate croissants, and the occasional yellow lab, the people behind the scene are a wonderful batch from a wealth of backgrounds and diverse array of experiences. As a result of my time in the office, I feel evermore connected to Kiva and its mission, connecting people through lending to alleviate poverty.

Officially a Kiva Fellow on the infamous map at Kiva HQ. Photo credit: Eric Brandt

However, there is only so much to be learned about two of Kiva’s key components while sitting in cloudy San Francisco—the field partner and borrower (unless, of course, you work with the local field partner Opportunity Fund). After studying development, interning at Kiva, and being a lender, I was curious and enthusiastic to see how Kiva works from the other side. Thus, I decided to apply to the Kiva Fellows Program to learn about microfinance from the ground where I could hear the clients’ stories firsthand and experience daily life at a microfinance institution. I’m here to ask questions, understand, and learn. I hope to walk (or fly) away from the field with a broader understanding of development, comprehensive knowledge about Kiva, and invaluable friendships and life experiences.

So for the next four months, I will continue to learn the ins and outs of Kiva through the field partner and the borrower. As a Kiva Fellow with Yehu Microfiance Trust in Kenya, I will utilize the knowledge I gained about Kiva during my internship and KF training. With this knowledge I plan on assisting the field partner with implementation of the Kiva model, understand what this experience is like for the borrower, and to serve as the link between Kiva’s principal players: lender on the website, borrower in the field, the field partner, and Kiva headquarters in San Francisco.

Katie Morton (KF12) is enjoying riding camels and consuming her daily dose of chapatti, beans, and mystery greens while she works with Yehu Microfinance Trust in Mombasa, Kenya. Check out Yehu’s currently fundraising loans and its lending team!