Kenyan Microfinance

Five Talents operates a number of microfinance programmes in Kenya. Our focus is on providing our clients with basic financial infrastructure like savings and loans which allows them to lift themselves above their circumstance. 


PARTNERS

  • Thika Community Development Trust (TCDT)
  • Embu Community Development Trust (ECDT)
  • Nakuru Community Development Trust (NCDT)
  • The Anglican Church of Kenya, Kansas to Kenya (K2K)

PROGRAMME TYPE

Group-based micro-savings and loans programme. 

 

 

 
 

A MODEL OF SUCCESS

"I HAVE SEEN THE WAY FIVE TALENTS' UNIQUE TRUST GROUP STRUCTURE AND BUSINESS TRAINING PROGRAMMES HAVE ENABLED MANY THOUSANDS OF PEOPLE IN PREVIOUSLY MARGINALISED COMMUNITIES TO SET UP AND MANAGE THEIR OWN SMALL BUSINESSES. WHEN I CONSIDER HOW MUCH HAS BEEN ACHIEVED FROM JUST 3 DIOCESES, I LOOK FORWARD TO THE DAY WHEN WE WILL BE ABLE TO ROLL YOUR PROGRAMMES OUT TO ALL 36 DIOCESES."

- RT REV ELIUD WABUKALA, ARCHBISHOP OF KENYA

The success of our partner programmes in Kenya is striking: from humble beginnings in 2006 (when the first 13 trust groups were established), we now have 105 trust groups, consisting of over 10,000 members with combined savings of over £1.5m and active loans of £1.2m. And it doesn't end there. Because the loans are recycled, cumulative total loans are now approaching £2.9m! 

The cumulative loan total does not consist of funds sent from the UK; these are the hard-earned savings of the individuals who form - and own - the trust groups, many of whom are in rural areas and might otherwise be day labourers earning less than £1.60 per day. 

After almost 10 years of working in Kenya, we have the expertise to scale up our programmes there. We have a proven model, a cadre of expert local staff and the respect of the Anglican Church. There is high demand for our work: other Dioceses are regularly knocking at the door of our experienced programme management team, asking how to start a trust group; and the Archbishop of Kenya himself has invited us to replicate this model throughout Kenya.



Demand

In order to meet this demand, Five Talents UK is in need of a wider group of supporters. Find out more about how you can help us out as an individual, business, or church by clicking here


Why savings-led

Our Kenyan programmes work on a savings-led model. This means that local partners set up village-based savings groups; we call these ‘Trust Groups’ because the trust between members is fundamental to their effectiveness.

Our Trust Groups often meet after a Sunday service and use the local church as a meeting-place, but groups are open to people of all faiths and none. Anyone can join a Trust Group, as long as the rest of the group accepts them – it is self-selecting and democratic.



Typically, our members are smallholder farmers struggling to make ends meet on less than £1.60 per day. Before they join one of our Groups, they have no safety net to meet crises such as poor harvests or illness, and even if there was a bank within travelling distance, they are too poor to access even the most basic financial services.
 


Micro-Savings & Trust Groups

Our Trust Groups are community-owned and managed; they elect their own leaders, write their own constitution and manage their own meetings. Our CDT staff (if you're in need of a glossary of terms, you'll find one here!) train each group in these processes, and then offer training on how and why to save, how to keep records, how to take loans from group funds and how to invest the loans wisely in small enterprises.

Members save together at each monthly meeting and once enough money has accumulated in their Trust Group bank account, they begin making loans to one another. With guidance from our staff, members set the interest rates, repayment schedules and sensible rules (such as no member may borrow more than 3 times his/her savings). Members make all the lending decisions too, and do so very successfully; we have very high repayment rates in all our Trust Groups. After all, members are lending their own hard-earned savings to one of their neighbours so they make sure to take good credit decisions. Members of Trust Groups are all part of smaller cell-groups of around 5 members who know and trust each other well and co-guarantee each other’s loans.

Our staff are on hand at monthly meetings to ensure proper processes are followed, check the books are being kept accurately and give additional training on financial literacy and business skills (details of our unique business training curricular can be found here).

As groups – and savings – grow, some transform into Village Banks and begin to explore the potential for value chains or group enterprises. Our staff help them source support for these ventures too.

Measuring Our impact

This graph and the table below illustrate our successful growth in Kenya. From our small beginnings, with just 13 groups and 520 members in our first year of work in Kenya, we now (as of 31 December 2014) have 105 Trust Groups and 10,522 members, who between them currently hold savings of £1,485,791 and have active loans of £1,169,031. These are enormous sums for people living on less than $2.5 / day to have saved and borrowed together.


Number of Clients in our Kenya programmes

This is not the full story either; because the repaid loans are re-lent to other members, the cumulative loans our members have made to one another since the programme began is £2,885,983. This is a huge sum injected into the local economies of the dioceses of Thika, Embu and Nakuru where our 3 current CDTs are located.


Where your donation will go

If you choose to support this work, your donations to our Kenyan programmes will be used to cover the costs of our local trainers to form, nurture, train and supervise Trust Groups; all the loan capital comes from the groups themselves. Microsavings and credit is a very efficient model; every £1 you give helps local communities use their own assets – small amounts of savings (which soon grow bigger as the savings habit takes root), skills and social bonds – to fuel their own local economy.

Your gifts will pay the salaries and operating costs of local staff in Kenya so that they can continue to help our current programmes grow and to establish new programmes. There is demand for our work in Kenya – because it works! We have ambitious plans to form a sustainable, transformational, and replicable Trust Group in every community in Kenya which wants one – but we’ll need your help for that.

Would you like to support this work? Explore the ways you can make a difference by clicking here.

Looking to the Future

Word of the successes of each of our programmes has spread in Kenya; we currently work in 3 dioceses (regions) but have at least 6 other dioceses petitioning us to start a programme in their region. To meet this demand, we are seeking to establish a ‘Five Talents Kenya’ central hub, to be run by our longest-serving member of staff in Kenya, Peterson Karanja, an individual who pioneered our first programme in Thika. He will help our programmes replicate and reach more needy communities so that they too can harness their own resources to help meet their family and community needs.

We are also seeking funding to transform more of the largest Trust Groups into Village Banks (also called FSAs or Community Banks). This change will fund the costs of developing dairy and poultry value chains for Thika members (for example, refrigerated storage and transport so that farmers can pool the milk from their individual cows and sell it directly to large buyers in bulk, rather than each selling their few litres separately at low prices to 'middlemen'). The creation of Village Banks will also help fund the innovative technology we are introducing to make our Trust Groups more efficient and safer. 


Where to next?

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