The Pamoja Women Development Program now has over 48,000 members throughout Kenya. From the IPS, writer Isaiah Esipisu tells us about one success story form the program.
Eight years ago, Mama Njoki - "Njoki's mother" as Njuguna is affectionately called in honor of one of her five children - says she was a housewife in the Kiambu District of Central Kenya. Her husband is an accountant, earning enough to cover household expenses.
Today, she is the proprietor of a dairy project with 15 Friesian and Jersey cows, delivering milk daily to the nearby milk collection centre in her home village of Ndumberi. Her success is attributed to a robust savings and credit system that allowed her to build up the business.
The 58-year-old keeps her dairy herd, which produces a little over 100 litres of milk each day, on a small piece of land, just about a thousand square metres. Also bleating and clucking in what little space there is to spare are a few goats and the chickens from a small poultry.
"What I have today is attainable for any housewife who handles at least 100 Kenyan shillings ($1.25) a day for the family food budget. All she needs to do is to save a few coins out of this with a self-help group, so that she has at least 200 shillings by the end of the month," says Mama Njoki.
Capital unlocks potential
She's repeating the advice she herself accepted eight years ago from an official with a microfinance institution known as the Pamoja Women Development Program (PAWDEP), when she joined 39 other women in her village to form the Consolata Self Help Group.
"We registered the group as a community-based organisation, and linked it to the microfinance institution immediately, so that we had a banking platform for our savings," says Mama Njoki.
Each member of the Consolata group was to put the equivalent of $2.50 into a common kitty each month. Members presenting a workable business idea can then borrow money from the combined savings at an interest rate of five percent; the loan is repayable at the end of three months.
Members' loans are limited to two and a half times the capital they have accumulated in savings with the group; for example, a member who has accumulated $100 in savings can take out a loan of $250. In this way 40 percent of the loan is guaranteed against money the borrower herself has put into the scheme if she defaults.
"We encouraged them to keep experimenting by borrowing from time to time and investing in small businesses," says Rachel Wanyoike, a microfinance adviser now working as the Head of Human Resources at PAWDEP. "In the meantime, we have a pool of credit officers who keep teaching them on how to invest the money in a manner that will help them service their loans successfully."