An Innovative Microfinance Project in Nairobi

The visit with Opportunity Kenya was a nice way to end our Kenya trip because it represented a positive progression. We went from the Dadaab refugee camps to the informal settlement of Kibera (often referred to as the largest ‘slum’ in sub-Saharan Africa) and finally to the Machako bus stop, a micro-enterprise hub on the outskirts of Nairobi.

To me this progression represents CARE’s ability to work with the ultra poor, the poor and those who are relatively better off. (Although compared to our standards in Canada they remain poor). Spending an entire day with men and women entrepreneurs who own small businesses really demonstrated to me what is possible. It made it clear that it is realistically for tens of thousands of Kenyans to engage in a productive economic life.

Take Pauline Muthoni for example.

She is a scrap metal trader who buys discarded metal sheets from the port city of Mombasa, transports them to Nairobi where she has a workshop. Here she makes wheels barrels, school boxes and chicken feeders. Six years ago she borrowed 10,000 KSH (about US$ 130). Now, when she needs to borrow, she takes out a sum in the range of 300,000 KSH (about US$ 4,500). Her business, which she inherited from her mother, is now thriving. She employs over six people and even sells raw material to other traders.

In Kibera and Dadaab we saw what CARE can do for poor people but through Opportunity Kenya, we saw what Kenyans can do for themselves. CARE still helps but the scale [percentage of help in relation to impact] has tipped. Our role now is largely an advisory one to the board. The entrepreneurs are the ones truly responsible for their success. They are creating it.

The first half of the day we visited microfinance clients met the management team of Opportunity Kenya. We saw how they run their business and how they are building micro finance opportunities. Then we met with the board of WEDCO, they are the ones providing the advice to Opportunity Kenya. [WEDCO is the original name of the microfinance entity that CARE supported]. The Board consists of a lawyer, an employee of one of the largest bilateral aid agencies, a senior banker with 25 years of experience in East and Southern Africa, and two CARE employees with strong experience in the financial sectors.

For a microfinance initiative to be successful it has to work in two directions: it has to serve its customers but also make a profit. The regulatory framework in Kenya is constantly changing. WEDCO and Opportunity Kenya must influence microfinance legislation in Kenya so that it benefits poor people. That is why we are involved. CARE has its feet in the market and a seat in the boardroom. We can talk effectively to people like Pauline but can also pick up the phone and talk to a representative in the central bank who can influence policy that ultimately affects poor people. That is our strength.