A year ago today, I lived in a small farming village in the rolling hills of rural southwest Kenya. I used to wake to the sound of rain on the tin rooftop and many multi-colored lizards scurrying in my windowpane for shelter. Beside farmland as far as the eye can see, there was one main road in the village. The few structures built with actual cement (instead of mud and sticks) lined that main road, and a few of them even had indoor plumbing and possibly even electricity for at least part of the day. The nearest grocery store was over an hour to the east by car (and very few people had those), but we did enjoy the convenience of a little general store where one could buy things like sugar and flour, along with a vast marketplace where farmers could sell their almost unbelievably large and boldly colored fruits and vegetables each day.
The nearest microfinance institute (MFI) was in the same town as the grocery store, far off to the east. It was in that town that some local people were able to access loans through a local MFI and also through the microfinance platform where I now work, Kiva (www.kiva.org). I met many Kiva borrowers there before the possibility of joining the Kiva team was at all a reality for me. My favorites among the borrowers were definitely a number of friendly and hilarious boda (motorcycle taxi) drivers. In our village, however, being as remote and rural as it was, MFIs were not accessible. Instead, the organization that I worked for, Nuru International, helped local farmers form collective savings groups with a minimum of 10 farmers in each, pooling together their weekly shares and allowing members to have savings set aside for more costly improvements and investments, or to help them deal with unforeseen challenges as they arose.
I work mainly in the education sector, and in Kenya I was trying to ensure that rural public primary school children were able to access quality education at their local schools. My role was not as a direct teacher of children, but as more of a teacher of teachers, working to empower local teachers to create and manage an effective program on their own. This may seem somewhat unrelated to microfinance, but the overlaps were evident at times. Nuru International’s goal is to have all non-local staff exit within seven years, once local staff is prepared to take over. When teaching my team how to develop workplans and budgets, I first learned that the concepts of planning and saving as I knew them turned out to be fairly foreign concepts for most of them. I posed a hypothetical question, ‘Pretend you are getting married. How long will it take you to plan and save for this?’ The first answer came from my friend and colleague, John, ‘Ah, this will take at least a day!’
This is when I learned how planning in this part of rural Kenya goes. My friends explained to me that when you have a wedding to plan, people often pool what resources they have then and there, as there is rarely any extra holdings to contribute. As another example, they said, when you want to build a house, you wait until you have a little extra money, and then you buy a few bricks and a bit of mortar. Virtually every house in the village began this way. Maybe six months or a year later, the family would have a little more extra money, so they would add a few more bricks and the wall would become a little taller. I began to understand why I walked by so many seemingly abandoned piles of brick each day all around the village. I asked why they would not just save the money until they had enough to buy bricks to build an entire house, and they all laughed, explaining that if they tried that, there would never be enough money for bricks. Things always come up, people get sick, friends need favors. Investing in the bricks, they said, was the only sure way of working toward building a house, especially where there are no banks.
Most of my team had never heard of loans or microloans. When I explained what these were, many immediately thought of great business ideas and asked if they could write up plans and proposals for me to take back to America in the hopes that I could find people willing to give them loans to get started. A few local people were actually already benefitting from microloans from their savings groups as well. I had a good friend who was a tailor and his children were (and remain) the absolute joys of my life. When I arrived, several of his children were not in school and the family was often unable to purchase medicine while the little ones continually got sick. With a small loan from one of his savings groups, my friend was able to purchase a new sewing machine and over the course of a year was able to earn enough to enroll all his children in school (except the youngest, who was still too young), buy medicine whenever anyone fell ill, and save for the future.
That is microfinance in action through one man, impacting one family, but the impact of that one loan will resonate throughout the lives of each of those children and impact their community, long after my friend has closed up shop.
I have spent the last decade working in international protection, education, and sustainable development, and it is an exciting time to be a part of this world. Microfinance has emerged as an important empowerment tool that respects the dignity and innovation of the beneficiary and provides a hand up rather than a hand out. For all the controversies and misuse that have affected the world of microfinance, my friend and others like him are living proof that small loans can make an immense and lasting impact in virtually no time at all..
Thank you to everyone taking part in the Month of Microfinance and all those who lend and who borrow to transform the world and alleviate poverty!
Jessica Hansen is the Education Development Manager for Kiva, and has a strong background in international education, local capacity building, and global engagement in sustainable poverty alleviation. She heads up Kiva’s education initiative to enhance understanding, involvement, and the mobilization of students and teachers around micro-finance. Prior to this, she worked in remote rural Kenya with Nuru International and has also worked with the U.S. Committee for Refugees & Immigrants, Mercy Corps, the IRC/Women’s Refugee Commission, UNHCR, the Centre for Refugee Research, and MSF (Doctors Without Borders). She holds a BA of International Politics from the University of Central Oklahoma/University of Leicester and an MSW in International Social Development from the University of New South Wales in Sydney, Australia. Her overseas work has been mainly in East Africa and Southeast Asia, and she is conversational in French, Thai, and Kiswahili.