By Bedah Mengo NAIROBI (Xinhua) --
Women in Kenya are reaping huge from micro-lending institutions
because of their ability to form groups and stay united.
The women, majority who
are in groups commonly known as chamas, are the biggest
beneficiaries of micro-loans in the East African nation.
The loans from
microfinance institutions that range from as low as 58 U.S.
dollars to 2,325 dollars have made them stay ahead of men in
running small businesses.
In both Kenya’s urban and
rural areas, women lead in operating small businesses that
include vegetable stores, food kiosks and second-hand clothes
and shoes stalls, thanks to micro-loans.
work with groups, not individual members. Members of the groups,
together with their contributions, act as guarantors to loans
their colleagues take, thus eliminating the burden of them
offering collateral as demanded by commercial banks.
“Women are good at
making groups, staying united and running their activities in
an organized manner,” noted Sammy Kitula, a business
development services coordinator at Global Village Energy
Partnerships (GVEP) in a recent interview.
According to the business
mentor, women are patient and have communal sense, which binds
them in groups.
“To a woman, being in a
group means a lot. It gives her a sense of belonging and
feeling that she is part of a whole. She will adhere to the
tenets of the group as long as she knows that it is for her
good,” explained Kitula.
Unlike men, Kitula added
that there are many things in the society that bring women
“The fact that women
face various challenges in society means that they need people
to share their thoughts with. That is why it is easier for
them to come together and form groups.”
Some of the challenges
that unite women include funerals, being widowed, lack of
finances and marital problems.
“Women will form groups
to help each other. They only need a reason to have a group
and they will form one. It, therefore, becomes easier for them
when it comes to forming groups to access finances,” said
Widows and Orphans is one such a group. After losing their
husbands, the women formed the group to help them socially and
The outfit has turned to
be one of the biggest cook stove makers in the country,
producing over 5,500 units a month.
According to secretary
Herme Okonjo, the women through the group have benefitted from
micro-loans in the past and have gone ahead to form their own
savings scheme, where members can borrow loans.
“We do not have men in
our group but this is not because we have locked them out,
none has come to ask to join. We will accommodate them if they
come,” she said.
Valarie Mwikali, a leader
of a group belonging to Kenya Women Holding in the capital
Nairobi, acknowledged that women are the biggest beneficiaries
“Women are reaping from
microfinance institutions because of their innate power to form
and work in groups. As a member of a group, one must make
contributions and attend meetings every week, a thing most men
find hard to do,” said Mwikali.
George Otieno, a credit
officer who works with a micro-finance in Western Kenya, blames
culture on exclusion of men from micro- loans.
“Most men believe in
standing alone to show their masculinity. Some will form
groups and fail to attend meeting thus killing them. With
microfinance institutions, you cannot take a loan without
being in groups,” said Otieno, who added most men consider
micro- finance institutions as a “women’s affair”.
According to the Central
Bank of Kenya (CBK), microfinance institutions play a crucial
role in enhancing financial inclusion, particularly at the
Kenya has over 52
microfinance organizations, with a good number of them taking
deposits from members. The institutions have grown from less
than five in early 2000.
The increase in number of
institutions has helped improve access to financial services in
the sector, from 2 percent in 2006 to over 10 percent currently,
according to Microfinance Information Exchange, a U.S.
CBK notes that
microfinance institutions in the East African nation as at 2012
had mobilized over 1 million deposit accounts valued at more
than 100 million dollars.
A majority of microfinance
institutions in Kenya charge interest rates of between 1.8
percent and 2.5 percent a month.
Others, on the other hand,
charge 0.5 percent a week. Kitula further noted that another
thing that has made women stand out in getting micro-loans,
besides being in groups, is their will to repay.
“Most women will not
take loans that they believe they cannot repay. A woman will
take a loan of 116 dollars, repay and take another as she
builds her business. She will not go for a loan of, let’s say,
1,162, which she knows may burden her,” he said.
“GVEP guarantees loans
for groups that it works with, many of them belonging to women
and they do not default in repaying money borrowed,” he added.