Education building through poverty mitigation

Despite having had an education halted at eighth grade, Annah Njeri grew up with the sole belief that education correlates to responsibility and empowerment. She initially started her stationary business for the purpose of having her children’s needs met and to accumulate money for herself and her family. She has pursued a strategic business model since 1997 and has achieved considerable successes in her ventures. Below is a recent update from our Client Relationship Manager in Kenya:

Hello, my name is Traci Yoshiyama, Zidisha’s Kenya Client Relationship Manager. I am currently visiting Zidisha borrowers in and around Nairobi.

An assortment of bright colors sweep the main street of Ongata Rongai, as stalls displaying neatly piled fruits and vegetables overtake the Soko Mjinga market. Mjinga, meaning fool in English, began with only ten stalls and constant ridicule and doubt from the community. But as profits were made, ten quickly grew to hundreds, and although the name stuck, many prosperous entrepreneurs can be found here. As I walk through the narrow pathways, ripe tomatoes, juicy watermelons, pungent onions, produce galore overwhelm the senses. But if you look close enough, you’ll notice something out of the ordinary; a table enveloped in school supplies and random knick-knacks. Welcome to Annah Njeri’s shop.

Five years ago, Annah decided to start her own business, a business that promoted education. Having two children herself, she understood the importance of having educational tools readily available to all. Although pens and notebooks are the most frequent sellers, Annah is not short on textbooks, newly wrapped in plastic and in pristine condition. Calculators, rulers, even nail clippers, combs, and mirrors can also be found at her shop. Cleverly placed amongst the produce section, Annah has little competition and can reap the benefits of the heavy foot traffic brought on by the fruits and vegetables.

I met Annah before she joined Zidisha, glad to visit her again, this time a borrower and having recently received a loan. The elation on Annah’s face is obvious, as the loan came at the exact moment she needed it. School just starting this week, parents carrying handwritten school supply lists shop for their children. Throughout my visit, I often waited happily on the side as Annah assisted her many customers. Immediately upon my arrival, she showed me two big boxes, all filled with textbooks, just purchased with her Zidisha loan. Eager to pay back early, Annah wants to take out a second loan, hoping to expand her shop beyond Soko Mjinga market. Also worth mentioning is Annah’s dedication to Zidisha, as she is now learning how to use a computer (many thanks to Zidisha borrower, Josephine Nyang’au), which will allow her to deal with Zidisha matters on her own.

Hard workers are an easy find in Kenya, Annah proudly being amongst the thousands. Due to the high interest in Zidisha at Soko Mjinga market, I know I will be seeing Annah again. Annah, it was a pleasure to visit and thank you for welcoming me back. I am so happy that the Zidisha loan has helped!

Emerging trends in microfinance

Financial inclusion continues to be one of the key challenges in the microfinance sector today that would play an integral role in shaping its performance in the future. At the Mexico G20 summit last summer, 17 countries led by the Presidents of Chile, Indonesia, and Mexico publicly committed to advance financial inclusion. Although the term microfinance has been associated with the working methodologies of Muhammad Yunus of Grameen Bank and with organizations such as Opportunity International, Accion and ASA, its employment as a tool to fight against poverty has always been debated, since its usage still lacks a necessary component to creating successful entrepreneurship values.

The concentration of MFIs have been growing in the regions of Africa, Latin America and Asia over the years, and this trend is attributable to the increasing below-poverty line population in those regions alongside the proliferation of the urban poor. Primary sources of funds for early MFIs were generated from savings of clientele and venture capitalist funding. However, the scenario has been changing rapidly. Nowadays, Central Banks across the globe have been taking initiatives to allocate financial services to the poorest of the poor; this in turn, has enabled hundreds of MFIs around the globe to become profitable in the long run. Commercial banks have begun to acknowledge the profits they can achieve from the low end of the retail market and mobile phone operators continue to discover innovative methods of allowing the poor to access mobile-based banking services.

Over the past year, there have been various trends that have emerged in the microfinance sector as businesses and individuals continue to realize the benefits of microfinance. Some innovative trends that have been adopted by microfinance institutions as they try to make their solutions more sustainable are listed below-

•   Specialized Microfinance Institutions: Microfinance institutions are focusing on customer specific demands, which vary across a wide range of customers and according to the location. Last year saw an increasing progress in translating the needs of the poor into improved context-specific product offerings and policy approaches. A set of providers across the globe accelerated experimentation with innovative products that better match people’s savings needs and behaviors. For example, Jipange KuSave in Kenya tested the provision of interest-free loans with a third of the amount held back as savings. Opportunity Bank in Malawi has a commitment savings product for farmers that allow them to lock away their post-harvest payouts and distribute it over the year to smooth cash flows.

•   Diversification of Microfinance Institutions: Microfinance institutions believe in offering broad range of products and services under an umbrella of microfinance that previously started with small loans, now offers money transfer, insurance and savings services as well.

•    New channels: Branchless banking and franchisee-based services have become extremely effective and prevalent these days to approach potential clients who live in rural areas. One of the top developments in Kenya’s branchless banking industry was the launching of M-Shwari in Kenya, which provided access to savings and loans to M-Pesa customers. Through a partnership between Vodafone, Safaricom and the Commercial Bank of Africa, M-Pesa customers can now apply to CBA for a mini-loan and sign up for an interest bearing savings account, directly from their phones. Since its launch in November, M-Shwari now has 1million users.

•   Turnkey Solutions: Most of the microfinance institutions have started offering services to their clients that differ from traditional services like savings, insurance and loans. Some MFIs offer services such as supply chain management or assisting with marketing infrastructure to grow micro-businesses.

5 Things You Can do to Help Zidisha!

So, you're a long time Zidisha supporter. You have financed businesses, changed communities, and altered lives. Now what? Why not help Zidisha using some alternative methods! They are easy, free (well, most of them are), and they will help us out a bunch!

1. Spread the word! 

Did you know that we are on Facebook, Twitter, and Pinterest? By liking or following us you help us spread the message to your friends and family. See an interesting Tweet? Share it! Think that we posed a great picture? Like it! These simple actions help us create awareness, and increase our overall impact.

2. Use a search engine!

What, you already do that? Great! If you switch your default search engine to GoodSearch you can earn Zidisha 1¢ for every search you perform. Sure it's not a lot, but it can add up fast, especially with everyone's support! 

3. Shop online!

I don't know about you, but I have an addiction to Amazon! It just so happens that if you shop with Amazon by using GoodSearch you can generate us a 1.5% donation. Don't use Amazon? No problem! GoodSearch has thousands of online retailers who donate up to 4% of the total sale to your nonprofit of choice (Zidisha of course). There are even exclusive coupons for you to take advantage of.

4. Buy Zidisha gift cards!

Ok, this one will cost you money. However, buying a Zidisha gift card for a friend or family member will introduce them to the world of microfinance and the life changing impact that Zidisha has. Every dollar that we lend will benefit a needy entrepreneur. 

5. Share your ideas with us!

We have been around since 2009, but we are still growing and always learning. If you have a good idea to help us raise money or awareness, let me know! 

Being the change I wish to see..

Over the last several years, the methodologies of microfinance institutions have enabled the provision of financial services to those living in extreme hardship and poverty. Having been a resident of Bangladesh for the first 18 years of my life, I remember reading and watching the news about Dr. Yunus, the founder of Grameen Bank and how his vision that small loans could make a substantial change in the lives of the rural poor had changed my country’s social and activist makeup. In this day and age, free market enterprise might not create opportunities for one to attain a high standard of living, given the exponentially high population growth in most developing countries. Due to myriad of reasons, I became drawn to the concept of microfinance from my high school years, especially in its core mission to elevate poor people.

I joined Zidisha to nurture this passion of mine, alongside my economic development and film production interests. Being a communications associate has allowed me to correspond directly with clients from Senegal and Kenya, in order to help them discuss the benefits they have been reaping from their loans. I firmly believe that Zidisha’s free-flowing commentary modes between lender and borrower will escalate microfinance’s reach across international borders. Technology and social media has seeped into our everyday codes of conduct and performances, and microfinance industries’ exploitations of these mediums will surely lead to more improved and transparent methods of communication between lenders and borrowers. I have had a fulfilling experience so far in being a part of Zidisha’s team while balancing my heavy coursework at college. I hope to see Zidisha grow and become a beacon of light in the field of microfinance. 

Meeting a Visionary

Wanjira Ngure is a Zidisha borrower from Kianjoya, Kenya. Wanjira is married to a teacher, together they have one child, Gladys. Mrs. Ngure used to work for a HIV/AIDS group were she analyzed data. Since 2010, Wanjira has been running a small show near a shopping center.

Mrs. Ngure used her Zidisha loan to purchase an irrigation system to help her grow produce on her family's 2.5 acres of land to put up for sale at her shop. Mrs. Ngure recognized the need for fresh produce as a good business opportunity because most of the areas produce are shipped in from far away, and not usually fresh by the time of arrival!

Our in-country Client Relationship Manager Achintya Rai recently met with Mrs. Ngure and her family. Read about his visit below:

Hello lenders,

My name is Achintya Rai and I am Zidisha’s new Kenya Client Relationship Manager.
This Sunday (5th Feb 2012), I went to the village of Kianjoya to visit Rahab Wanjira. Rahab’s husband James Ngure is a teacher in Mugaa Secondary School, where I am putting up. When I visited their home I met James in his work clothes, tending to his farm. He was the one who explained the business and its functioning to me.

If I were to use one word to describe James, I’d call him no less than a ‘visionary’. There are certain people who have that spark that employment advertisements profess to look for. I feel very strongly that James has that spark of brilliance. The things he is doing with the resources he has at this remote location are remarkable.

James has been working in the school for around 8 years. 4 years ago he decided to settle near here and bought this piece of land in Kianjoya. He did not know what else to do with the land so he and Rahab farmed it like everyone else to grow crops typical to here. Rahab also bought a shop in Mitimingi, which she used to take care of. They took their first Zidisha loan to stock this shop.

A year ago, James and Rahab attended a seminar in Naivasha. That is where they got the idea of constructing a green house and using drip farming to irrigate the crops. A green house kit being sold at the seminar cost around 210,000 Kenyan Shillings. James investigated further after returning and was able to construct his first green house (15m x 8m) in around 50,000 shillings. They sold their shop in Mitimingi to arrange for this money. 

The returns from the first green house were so tremendous (James claims that a tomato crop inside the green house gives FIFTY TIMES more returns than a tomato crop the same size outside the green house) that they have now decided to gradually bring their whole farm under a green house. They used their second Zidisha loan to increase the acreage under greenhouse and to buy a drip irrigation kit. Now they have three green houses, all using drip irrigation and all made from local materials (polythene/plastic sheeting and local wood logs).

James has dug two tanks in the farm to collect rainwater. He directs water flowing on the road into his farm to collect it into these tanks, which he uses to drip-irrigate his crops for the whole year.

His future plans include lining his tanks with ‘dam liner’, which is a plastic sheet that prevents water from being absorbed by the soil.

When one is in the presence of wisdom, one tends to test his own (perhaps not everyone, just men)- so I asked him that why didn’t he try keeping fish in his tanks to supplement his income. He nodded solemnly and said it was a good idea (I am sure he was smiling in his heart, but is too big a man to smile on my face). 

I also met Rahab and James’ little daughter Gladys, who didn’t smile at me till the very end, when I pulled her cheeks.

Achintya
Mugaa Village, Kenya
7th Feb 2012 

Future Plans...

Ouréye Faye is an entrepreneurial mother from Dakar, Senegal. She not only supports her three daughters and her son, but also the families of her brothers and sisters. Being the oldest member of her family carries many responsibilities! Mrs. Faye studied dressmaking, knitting, and embroidery, she earned degrees for each. After receiving her degrees she started her own sewing company making boubous (see picture).

Our in-country Client Relationship Manager, Stephen, recently wrote about his meeting with Mrs. Faye. Read about their encounter below:




Hello Lenders,

Friday, I had a wonderful experience with Oureye Faye. She apologized for not finishing her last payment sooner but wants to thank the lenders from the bottom of her heart for everything that she has been able to accomplish with this loan. 

Business
From the 400,000cfas loan that she received with the help of Zidisha, Madame Faye was able to buy a new sewing machine which she uses for her booba making business that is a very popular industry in Dakar. She buys her fabric from Mali because it’s the best quality and she makes boobas and sells the rest of the fabric in Senegal. She now has three sewing machines

Education.
Madame Faye has also used her money to invest in education. In Senegal, the public education system has a reputation for not being the most efficient in terms of quality and outcome. With the funds Madame Faye has earned, she has been able to put her 4 children through private school. Even though Madame Faye is married, she is the main provider of her household. She explained to me that every morning she wakes up at 5 a.m. and works until 9 p.m. The majority of her earnings are for her children, her main priority. However, she also pays for the gas bill. Even though Madame Faye is married she is obligated to work like most women in Senegal because consistent salaries are not guaranteed. One works today and possibly tomorrow.

Future Plans 
For a future project, Madame Faye explained that she would to love buy a glass door and some furnishings to organize her shop and display her work. This will also enable her to work very close to home. She has big plans for this project and is ready to take her business to the next level. 


Client Relationship Manager Intern
Stephen 

A Very Good Day

Recently some of our volunteers and interns had the chance to visit Diop in Dakar, Senegal. Here is what our Zidisha team had to say about their meeting:

Last Friday I had the pleasure of meeting Gabriel and his family in their home in Parcelles Assainies, a suburb of Dakar. Gabriel graciously invited us (2 volunteers and 2 interns) into his home where we were introduced to his family. Gabriel's wife just recently gave birth to their third child, Paul Augustin who is but one month old. They have two other children; Emmanuel who is about 6 and Georgette who is 10. 

It was a particularly opportune visit as it was while we were in Gabriel's company that he learned that his loan had been met in full! It was extremely exciting to be with him and his family at such a joyous time. What's more is that his brother Dominique ,another Zidisha borrower, also found out that his loan had been completed as well. Gabriel was so surprised to find out that he had earned 100% because when he had checked his status the night before he was only at 4%!

With his loan, Gabriel is now able to purchase additional merchandise specific to his clientele and will thus be able to increase his capital to support his growing family. In addition to selling alcohol, Gabriel now hopes to be able to sell meat, other deli products.

A BIG thank you to our Zidisha team in Senegal for the update on Diop!