East Africa: Microcredits - The Bank Goes to Its Customers
Rhoda Tarus came with low expectations: she did not own any land, so who would loan her money? How was she going to be able to secure a livelihood and make her business ideas a reality?
Rhoda was barely making ends meet with the brewing of "Changaa and Busaa", traditional Kenyan beverages, when she heard about the "Kenya Women Finance Trust" (KWFT) from friends. "She told me about the opportunities for getting a loan, but I didn't have any collateral."
KWFT gave Rhoda Tarus the opportunity to take her future into her own hands: she used a microcredit in the amount of 30,000 Kenyan schillings (around 240 euros) to open a small butcher shop at the Moi University in Eldoret in western Kenya. "My life changed completely and I was able to repay the loan within six months", she explains.
High rates of repayment
Microcredits are paid back at astonishingly high rates of over 90%. "However, the people of Africa are being buffeted strongly by the increasing prices of food and raw materials as well as the financial crisis", reports Susanne Boesch, OeEB project manager. After all, not even microcredits are a miracle cure for economic crises.
It is important to Boniface Wabwoba, credit officer at the microfinance institution Bimas, that his customers are successful. Every week he travels to the village of Embu in the Kenyan province of Murang'aum in order to talk to his microcredit customers and see them put the money for the repayment instalments on the table. The weekly instalments are only one or two figure amounts in euros. All payments are painstakingly entered into pink "passbooks".
With its "Upgrading and Rating Initiative" set up for four years, the OeEB is making it possible for microfinance institutions in Ethiopia, Kenya, Rwanda, Tanzania and Uganda to develop in an independent and sustainable manner.
Important role as a consultant
Boniface Wabwoba sees himself as a kind of banking, business, education and agricultural consultant all in one. For example, one day he is explaining to dairy farmers the best way to seal pots, and on the next he is talking to a woman in a slum about which sewing machine could be right for her. After all, his customers should be able to get the most out of the borrowed money and be able to pay it back with interest.
Fit for the capital market
Boniface's microfinance institution is one of 17 selected for the OeEB project. A comprehensive consulting, education, and training program was created for them. This is called "capacity building" in technical jargon and includes topics like risk and debt management, IT, HR development, marketing and product development. The minibanks have to refinance themselves on the open capital market if they are to stand and grow independently over the long term. To do that, they must be in good shape with regard to their personnel, technology and organisation.
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