Change through safety

Coming from a humble background, Anthony Gitambe made a conscious decision to bring about change within his locality in Bahati, which was infused with problems of poverty and drug addiction. He did this through creating a chicken broiler project, which in turn, would generate employment for the youth population of that area. In order to bring about this transformation, Mr. Gitambe came to Zidisha for a loan to start up his business. Below is a recent account of the progress of his business:

Hello, my name is Dan Cembrola, one of Zidisha’s Kenya Client Relationship Managers. I am currently visiting Zidisha borrowers in Nakuru and its outskirts.

Zidisha borrower Anthony Gatembe resides in Maili Kumi, a small town 18 kilometers north of Nakuru. It is at his new home here where he is starting his next business venture. His previous endeavor, a poultry farm ran into a harrowing obstacle when 80% of his chickens contracted Newcastle disease. Fortunately, due to Anthony’s earnings at his second job as a driver between Nairobi and Nakuru in addition to the funds he saved from his Zidisha backed poultry business, Anthony was able to purchase a piece of land in Maili Kumi. He plans to repay his current loan in the following week and refocus his efforts.

Anthony has been practicing farming and agriculture since he was a child. On his new property, he is currently growing maize and other assorted vegetables to be sold to the rapidly expanding customer base in Nakuru. His long term goal is even more ambitious. By November, he plans to purchase a cow and begin a dairy farm on his new property. In addition to Anthony’s lifelong knowledge of rearing livestock, he has researched the local market and is well versed on what he can expect to receive in return for his investment.

He calculates that a cow could produce 40 liters of milk each day. With the local price hovering between 30-40 Kenyan Schillings per liter, Anthony expects to make between 800-1,000 Kenyan Schillings after production costs. In addition to strictly selling milk, Anthony also plans to take courses to learn how to produce yogurt and cheese from the milk, both of these products would increase his profit margin.

Losing 80% of his chickens could have been debilitating financially to Anthony, but because of his ambitious and ingenious use of his Zidisha loan, he is now embarking on a business venture that he believes will be both more safe and profitable.

Fighting Crime in Bahati

Here is a recent update from Dan in Kenya. He met with Joel Mwangi this past week and was able to see what Joel's Zidisha loan has done for him. Be sure to check out Joel's profile page if you're interested in learning more about him.


Hello, my name is Dan Cembrola, one of Zidisha’s Kenya Client Relationship Managers. I am currently visiting Zidisha borrowers in Nakuru and its outskirts.

I visited Joel at the place of one of his businesses in Bahati. It is evident that Joel is a natural community leader, and a well-respected one at that. His most idealistic long-term goals are eradicating poverty in Bahati. Toward that end, he has used his Zidisha loan to expand his farm and invested in higher quality fertilizer and seeds to ensure that his crops will be healthy and bountiful. Joel strongly advocates the use of high quality seeds and fertilizer to his neighboring farmers. He evidenced his point clearly as he gave me a tour of his village, pointing out which farms were able to afford fertilizer and quality seeds. 

In an effort to advance his community, Joel is selling a portion of his land that he has tilled and prepared for the next growing season to a neighbor. His intent is to give his neighbor an opportunity to begin a small farming business to help support his family. Joel regularly advises members of his community on improving their fertilization and irrigation practices. With the now abundant crops Joel is growing with his loan from Zidisha he has been able to employ laborers in Bahati to assist him and his wife during the harvest season. 

In addition to operating a three and a half acre farm, Joel also serves as chairman of the group of motorbike operators in the region. In the past few years, there has been a rise in the incidence of common thievery in Bahati, many crimes were committed with the aid of motorbike drivers. With the assistance of the local police force and the support of his fellow motorbike drivers, Joel was elected chairman of the group. As chairman, Joel has instituted a policy that mandates that every motorbike driver must have a registered identification card which is displayed to all of their customers. This measure has provided a sense of accountability to the motorbike operators and allows their customers to be confident that each driver is registered and approved by the local government and police department. 

Can Microfinance Revolutionize Car Ownership in Developing Countries?

When most people hear of microfinance for the first time, they often ask whether or not it actually works to benefit those in need. It is an excellent question to ask since it is supposed to benefit those who are vulnerable, poor, or simply need some extra help. As it turns out, microfinance is an amazing way to benefit those who currently have no access to capital and it comes along with many amazing testimonials regarding how a person’s life has changed after being given access to funding they may have never had.

For those who are unaware, microfinance is a basic way to provide loans and financial services to those in developing countries who currently do not have access to them. This type of strategy is one of the best ways to help many citizens become financially stable, which allows them to be able to provide for both themselves and their families during tough economic times. Since statistics have shown that over half of the world survives on less than $2 each day, microfinance is one of the best ways we can employ to help these people.

Microfinance May Impact Car Ownership on a Large Scale

As stated earlier, microfinance provides a large number of amazing benefits that can help both families and the local economy that they live in. One of these benefits that may soon be possible is the potential for those in developing countries to own their own cars. Since most citizens do not have access to car loans, owning a car may never be a possibility for them. However, microfinance has a huge chance of providing these citizens with access to car credit from a microloan. While the loan will not be providing them funding for a car specifically, these loans can help people get their feet off of the ground if they are trying to start a business of their own. Imagine that there is someone who owns a farming business, but has to walk three hours away, in order to pick up their much needed supplies. This means that their total trip will take six hours and by the time they return they will have to continue working. This is not only extremely tiring for the individual but cuts down on their productivity for the day, as six hours of their time will be spent walking. Less time for them to work means less money for them to be able to feed both themselves and their families.

If those same farmers have access to microfinance, they will be able to invest in certain items that can help their business to grow. Eventually, with the help of your loan, they are profitable enough to purchase a car and can now travel to the next town to pick up supplies. With this car, they have more time to work, can make more money, and the local economy improves. Without your loan, this would have never been possible. Success stories like these are what make microfinance such an amazing tool for developing countries to utilize. And there are several additional benefits that come along with your loan.

Microfinance Benefits

• Ease of Accessibility
  
  Most banks out there simply will not provide loans to those who do not have any existing capital or assets. They want to see some sort of income that many people simply do not have a consistent basis. Because of this, many people cannot qualify for loans to help their small businesses or families in these developing countries. Microfinance gives citizens easy access to financing that has the potential to end poverty in many areas.
  
• Creating New Jobs For The Community
  Job creation is essential for the sustainability of any area in order to help improve the lives of many citizens. Microfinance helps in a huge way by providing jobs for those who are looking to start local businesses of their own. Since these people now have funding to help their business costs, they have the ability to work and are running a business that aids in supporting the local economy. It is beneficial for everyone.
  
• Ensures Continual Education
  It is very unfortunate that many children living in developing countries must be pulled out of their schooling because of economic issues. Microfinance ensures that these children can continue their education since their families now have access to funding in order to help enrich the lives of themselves and their community.

Guest post by Eve Jamieson

Make a Difference

Growing up in Mombasa, Kenya's second city and major port, I could always feel the bustling sense of small business activity. When I think of a small business in Kenya, I think of the open air market opposite Nakumatt mall where hawkers sell their clothing goods; I'm thinking of the tuk tuks  (auto rickshaws) roaming around Mombasa old town, always one cell phone call away an, skillfully navigating around the narrow streets of Old Town and Fort Jesus.

Growing up, I always sensed the Kenyan people's natural entrepreneurial spirit fostered by a jovial and optimistic demeanor.  When I think of entrepreneurship in Kenya, I think about the maid who left our family to enroll in a catering class; I think about our first driver, who always strove to achieve, and who now is part of the transportation team of Kenya's Vice President. But among these feelings of joviality and optimism, I did also feel Mombasa's dark side. Poorly maintained roads, the spread of diseases such as malaria, and issues of crime and safety, all combine to put a significant damper of people's potential. And Kenya has such great potential; its people, its strategic location and natural resources all make it a land of vast opportunity.

This is personal for me. In Mombasa, our family had a maid for more than a decade. We saw her raise a son and work hard to provide him with an education. Isn't that what anyone would want in a parent; a mother who works hard to give her son a better life? She recently passed away; she was HIV positive though we didn't come to know until just a few weeks before. She was on medication; apparently that wasn't enough. I know that people like her deserve better, they deserve a chance to start up their own small business or trade, or to get an education and strive further and do better.

So, there I was, crying after hearing the news of our maid's passing; feeling that a huge injustice had been done. She had been there when I was growing up; she was part of our family. And she deserved better. So, I decided to do something. Anything, to give back, in her name. And that's how I found Zidisha.

Initially, I was skeptical about microfinance. I remember writing a letter to the editor to my college newspaper contending that 'any credit system requires the creditor to pay back what they owe'. How could poor borrowers with little material possessions repay their microloans if their endeavor does not work out? The financial success of a borrower is not guaranteed. So, to make up for this weakness, commercial microfinance institutions charge high interest rates to compensate for the risk and make a profit. But Zidisha's model is different.

Zidisha's non-profit, crowdsourcing microfinance approach allows multiple individuals to contribute to a single small business loan while charging low interests rates on the loan. This crowd-sourced loan allows you, the lender, to diversify your philanthropic lending portfolio over different people, businesses and locations, which helps reduce the risk of losing your entire lending capital. So, loans in the hundreds and thousands of dollars will find funding from many different individual contributing to the loan. Additionally, Zidisha's network of borrowers and volunteer relationship managers give us Zidisha members insight into how our money benefits that small business in Kenya. Lastly, Zidisha requires that potential borrowers go through at least one credit check, which helps establish some loan repayment capacity. Zidisha allows me to recycle my charitable capital; as my loans get paid back, I will continue lending out money thereby magnifying the effectiveness of my charitable giving. It's a great model.

And while I may be motivated by the past, by the death of our maid; I look to the future, to her son, and think what else can be done to help. Maybe one day we can crowdsource educational loans and help young children in Kenya get more funding to pursue higher education or help fund the construction of libraries in rural neighborhoods. Maybe we can find a way to support democracy and good governance. Maybe we can make a difference.

Building up for a better future

Supporting a wife and three children is not an easy matter when one’s occupation consists of being a small-scale farmer. But RichardMwathi was one step ahead and had decided to diversify his business by starting a barbershop in 2005. This move was made in order to help give his family a better life. Below is a recent update from our Kenya Client Relationship Manager on his whereabouts and the occupations he has been involved in:

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

Knowledge is power. As the leading mantra here in Kenya, it comes as no surprise that the enrollment rate for primary education stands above eighty percent; literacy among youths a whooping ninety-three percent! Parents making meager wages will sacrifice almost anything to ensure their children have an education that they themselves did not get. As my visits to Zidisha borrowers grow, a trend in loan impact reveals itself, for although microfinance was initiated to provide services to uplift small businesses, many see it as a way to empower their children through education.

Richard Mwathi, former owner of a kinyozi (barbershop) in Lanet, Nakuru is the proud father of three teenage boys. With one in Form 4, another in Standard 8, and the eldest enrolled in Egerton University studying natural environment, paying for school fees is no easy feat. Richard’s Zidisha loan was used to pay for tuition, and although he intended to pay back his loan with the revenue acquired through his kinyozi, sales dropped and he decided to close his business.

Seeing better opportunities in Nairobi, Richard is currently living with his sister and nephew in Utawala, while his children continue to attend school in Nakuru. Hoping to accrue enough money to pay back his loan, Richard is working odd jobs at the many construction sites in Utawala. Construction work being on a need only basis and one of the only options for many without additional employment, Richard waits eagerly to be called upon. With elections so close at hand, many construction sites are also at a standstill, lying in wait to see what the new government will bring.

Richard’s struggles are apparent on his face, but his optimism for the future is also unyielding. Making repayments more manageable, Richard has decided to make small weekly installments starting in October. He will continue to stay in Nairobi until the end of the year, seeking opportunities in the growing town of Utawala. My visit with Richard ends on a light-hearted note while we take photos outside and I get a grand tour of a new house his sister is in the process of building. Thank you Richard and family for inviting me to your home, and I wish you all the best in your future endeavors.

To love beauty is to see light

The concept of looking beautiful within an underdeveloped region of the world might seem like a Western concept but such imperialist stereotypes are slowly being eradicated through the works of talented individuals in Kenya such as Mary Matheya. Her career is enshrined within a salon, where she sells beauty products and manages to make her clients depart by looking and feeling beautiful. A college-level educated woman, Ms. Matheya understands the risks of running short of funds and knows that a deep influx of clients would only serve to generate greater demand for her products, even though she might not possess the capital to deliver these products. Yet, she continues to ensure the daily satisfaction of her clients and is doing a successful job at it. Below is a recent account of the activities in her salon through her interview with 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.

Named after a favorite cousin, Tamara Beauty Salon screams of femininity, with its walls covered with posters displaying various hairstyles and catchy phrases such as, “Build your confidence”, “Stand out”, or “You look fabulous”. “Women want to feel beautiful. If you promise them beauty, the cost does not matter.” Zidisha borrower, Mary Matheya, makes this claim many times while in deep concentration braiding a customer’s hair. Fashionably dressed in high-heeled boots and stylish jeans, Mary has hours of braiding ahead of her (four hours to be exact).

Many women share the memory of grooming the hair of their favorite dolls when they were young, but for Mary it all began with grass. Finding joy in braiding, she practiced with blades of grass, later turning to her schoolmates. Realizing her hobby could become her profession, Mary took a training course which specialized in teaching various braiding styles. In 1999, Tamara Beauty Salon was born. Remarking on the significance of doing something you love, Mary shows a palpable sense a pride for choosing her path in life.

Although she has come a long way, Mary has big dreams to expand her business and Zidisha is just the organization to help her accomplish them. Being new to Zidisha, Mary wants to receive a loan in hopes of purchasing more chairs for added comfort for her customers and items to sell, such as nail polish, earrings, and hair dye. Like many borrowers, Mary heard of Zidisha through a friend. Understanding the importance of networking, Mary gets many of her customers through this very method. She comments on the quality service she provides, which results in many recommendations sent her way. Her current customer, Lencer, hearing about Mary through a friend and this being her first visit, can attest to Mary’s service, for after hours of braiding, the satisfaction of Mary’s work is evident on Lencer’s face. She does not leave without saying she will be back and will not come without a friend.

As the afternoon turns to evening, my day with Mary must end. I look forward to her joining the Zidisha community and I hope to be here to see Tamara Beauty Salon prosper. As I am getting ready to leave, Mary extends an offer of her braiding expertise to me. After observing her obvious talent and meticulous nature for perfection, I strongly contemplate a new hairdo. Next time I am in Ongata Rongai, I think I will take Mary up on her offer and let her work her magic to make me beautiful!

To view more pictures of my day with Mary, visit my blog, talkingstory.posterous.com

Crowdfunding Transforms The Charity Landscape

While charity organizations have been around for decades to assist those in need, the rise of the internet and crowdsourcing websites has transformed how charity is handled today. Microfinancing sites play an especially huge role in this as they allow donators to get their money directly to those who need it. Instead of donators placing their money in the hands of a charity that may never end up diverting the funds to where it is intended, donators can feel safe and confident in knowing that their money is directly handled by recipients in need.

Helping Businesses with Microfinance

Besides helping individuals gain access to things like education or an increased amount of savings, microfinancing also does a fantastic job at helping many businesses to grow. Around the world and in many poorer areas, many individuals who run their own businesses may be running into problems because of factors such as broken equipment or lack of resources and, therefore, cannot afford fixed price recruitment in order to hire others to help run their business. For most business owners in these rural areas, microfinancing is the only source of income for both them and their family.

If they have to end up shutting down their business, problems can soon occur. Microfinancing helps these owners with things like a new vehicle for their business, new fabric for a clothing company, or even money to produce additional food for a restaurant.

By helping these businesses, you aren’t only helping the owners and their families, but also the local economy. After all, one of the best ways to help a city’s economy to grow is to support the local businesses in the area. If a local business ends up having to close, this leaves a huge economic void for the area. Money spent at these local places will typically go straight back to the economy as much as two or three times over.

Microfinancing Helps Increase Savings of the Poor

As this article by AllAfrica.com says, microfinancing has helped to destroy the myth that the poor do not save their money and is instead showing that most are credit worthy and do intend on saving. Microfinancing loan institutions are an essential part in helping those in rural communities to gain access to the financing they need. The only challenge right now seems to be that many citizens have trouble accessing these forms of credit. However, many microfinancing services around the country are working hard to implement this infrastructure and bring it into the hands of more people so that they can be helped. According to AllAfrica.com, a World Bank report has said that the number of people living on less than $1.25 per day is over 1.4 billion. With unfortunate statistics like these, it becomes apparent how important infrastructure like microfinancing is along with access to things like fresh food and water.

Microfinancing May Help To Solve Academic Issues

Thanks to budget cuts within education sectors throughout the world, research projects are getting cut, and tuition continues to rise. In many parts of the world, education is not even an option and many people can only work without ever having the chance to get a higher education. Microfinancing sites are increasing the ability for many throughout the world to be able to get an education.

Since many children have to work for their families each day, many are not able to go to school because they must help their families. Along with this, education is often expensive and is not free in all cases. Regardless, extra money that families receive can help to keep children in school and help them get an education. 

Why Is Microfinancing Better Than A Traditional Charity?

While it is true that there are plenty of fantastic charities out there, many of them are major for-profit corporations, and only a fraction of the money you end up donating will actually go to where it needs to go.

While not all microfinancing institutions are like this, a majority of them are non-profit, and their main goal is simply to get the donated money from you directly to the person that needs it. The existence of a company that handles your donation and distributes it when they feel it is necessary is eliminated by p2p microfinancing; it allows you to help many individuals around the world in a major effort to get out of poverty and improve the lives of both themselves and those around them.

Guest post by Eve Jamieson