First you must save/invest. MPA’s partner on the ground insists that its members begin to save, even if it is a small amount. This program, Yawezekana SACCO (“It is Possible” Savings and Credit Community Organization) allows loans, once other conditions are met, to be two times the amount in savings. From there our partner offers FAIR AND FIXED interest rates and loan terms. Members know clearly what the interest rate is, when payments are due, and when they have retired their loan. This is known up front and does not change throughout the loan period. For Yawezekana SACCO, loans are offered at 14% APR, payments are made weekly, and loans are expected to be retired in 50 weeks, although most borrowers repay in 6-10 weeks.
Small group support. Members meet together in small groups, receive training on business skills, language skills, and even empowerment, social, and community health issues. Group members vouch for each and their loans. Together, they have the mentality that the group is responsible for the individual’s success. The purpose of the loan is always to generate income for the member. Example small businesses might be selling potatoes, tailoring clothes, reselling shoes, making soup and selling it, operating a green grocery, selling dried grains and beans, or frying fish and selling it.
Ongoing training and support. MPA’s partner provides intensive and frequent training, troubleshooting, and support. This group offers savings, loans for income projects, loans for housing, and support services including life insurance and health insurance and a 12 step in-patient sobriety program. This element is time intensive and requires a big investment from the grassroots partners but is essential to the successful repayment rate of 98%.
Non profit. MPA’s partners on the ground use the proceeds from repaid loans to fund more loans, and reach more members. With MPA’s help, they can reach more people faster. The repaid monies get used over and over and over again. This is the multiplicative impact of microfinancing done the MPA way.
Jamii Bora/Yawezekana was founded by 50 street beggars and Ingrid Munro, a retired architect. Following the principles of Muhammed Yunus, it grew into the largest microfinancing institution in Kenya. In 2010, Jamii Bora merged with a bank to create Jamii Bora Bank, but the banking regulations limited its ability to serve the poor. Now, with the creation of Yawezekana SACCO specifically for those struggling to climb out of extreme poverty, the mission continues. Jamii Bora Trust works alongside Yawezekana SACCO to provide the support services that are key to successful repayment of loans and to a financially empowered life.
The slum of Kibera, located in the city of Nairobi, is about the size of Central Park in New York City or Forest Park in Saint Louis, Missouri, USA. Kibera is estimated to be home to 1.5- 2 million people.
Yawezekana SACCO sees a repayment rate on its loans of 98%.
In a city of 3.2 million, those who reside on the streets or in the slums struggle to survive. Many exist on less than $1.25 US per day. MPA’s partner on the ground is active in these areas, encouraging those whose situation is the most dire, most precarious, and most desperate, to start saving and start thinking about a small income project.
Wilson was born in the slum of Mathare. At age seven, he saw that people were dying, either a slow death from starvation, or a quick death from a life of crime. At that young age, he determined that his would be a quick death, because he did not want to starve, and Wilson began snatching watches, purses, and other items from his neighbors and from visitors to Mathare. He became one of the most notorious thieves in the slum. Eventually, an old friend who was an account manager with Jamii Bora convinced him that there was another way to earn a living. She explained about the requirement to start a savings account first, and further stipulated that Jamii Bora would not accept stolen money in that savings account. Wilson decided to give an honest life a try. He saved, and he and his mother took out a small loan to start a grocery business. Through very hard work and perseverance, Wilson’s business succeeded. He since has qualified for a home loan and has moved to Kaputei Town into a house with four rooms, indoor plumbing, tile roof, and glass windows. Wilson has become a spokesperson for Jamii Bora and has traveled as far as Norway to share his story and the story of Jamii Bora.