Loans to women = smart eco­nom­ics

Women find in­no­va­tive ways of fi­nanc­ing in­come-gen­er­at­ing projects

Africa Renewal - - CONTENTS - By Zip­po­rah Musau

“Ta­ble bank­ing” may not be a com­plex fi­nan­cial con­cept, but it is mak­ing a dif­fer­ence in the lives of thou­sands of women and their fam­i­lies in ru­ral Kenya. It’s a sim­ple idea whereby mem­bers gather each month and lit­er­ally put their money on the ta­ble, which then be­comes im­me­di­ately avail­able to mem­bers as loans. The prac­tice elim­i­nates bank fees, wait­ing pe­ri­ods for loan ap­proval and many other ob­sta­cles faced by women in Africa who need loans but lack col­lat­eral. The loans are used to start rev­enue-gen­er­at­ing projects.

Joy­ful Women Or­ga­ni­za­tion (JoyWo) is one of the most suc­cess­ful ta­ble bank­ing groups in Kenya, with a mem­ber­ship of more than 11,500 women’s groups, each group hav­ing 15 to 35 mem­bers on av­er­age. Started by Rachel Ruto, wife of Kenya’s deputy pres­i­dent Wil­liam Ruto, in 2009, JoyWo had only 80 mem­bers, mainly from Ms. Ruto’s Uasin Gishu County, about 270 km north­west of the cap­i­tal, Nairobi. The group started with a re­volv­ing fund of about $800. In six years the group has ex­panded to 44 of the 47 coun­ties in Kenya. Its re­volv­ing fund has grown to $16 mil­lion from mem­bers’ con­tri­bu­tions, loan re­pay­ments, grants and do­na­tions from fund-rais­ing.

To­day, JoyWo is giv­ing loans to sup­port such projects as green­house farm­ing, poul­try, hor­ti­cul­ture, cat­tle-rear­ing and over­head ir­ri­ga­tion.

In the past five years the av­er­age an­nual in­come of more than 740 such women’s or­ga­ni­za­tions world­wide was a mere $20,000, ac­cord­ing to the As­so­ci­a­tion for Women’s Rights in De­vel­op­ment, but JoyWo has set its sights even higher.

Suc­cess­ful ben­e­fi­cia­ries

“We are com­mit­ted to help­ing women to rise up be­cause I know a woman is a full cir­cle. Within her is the power to cre­ate, nur­ture and trans­form,” Ms. Ruto told Africa Re­newal.

Irene Chep­koech Tuwei, an un­em­ployed sin­gle mother of two, dis­abled from an early bout of po­lio and with a past drink­ing prob­lem, is one of the ben­e­fi­cia­ries of JoyWo. Ac­cord­ing to JoyWo, she joined the or­ga­ni­za­tion in late 2010 with an ini­tial con­tri­bu­tion of just $2 from her sav­ings. She took a loan of $150, bought two pigs and opened a gro­cery kiosk. In 2011 she took a $700 loan to im­prove her small busi­ness and buy chick­ens and a dairy cow, which boosted her in­come. Last year she took a $3,000 loan and bought a Fer­gu­son trac­tor that she leases to farm­ers at $150 for each acre cul­ti­vated. In a good month, she makes about $4,500. She has con­sid­er­ably in­creased her shares, mak­ing her one of JoyWo’s top savers. She has also bought a car and a mo­tor­bike to use in run­ning her busi­ness, and is now in the process of open­ing a petrol sta­tion.

“Ta­ble bank­ing has trans­formed my life for the bet­ter… it has given me a plate from which I will be eat­ing. I want to be one of the shin­ing ex­am­ples of suc­cess­ful per­sons liv­ing with dis­abil­ity in the coun­try,” says Irene, who has shared her story at sev­eral JoyWo ta­ble bank­ing launches in other coun­ties.

The suc­cess of mem­bers like Irene and the in­flu­ence of JoyWo have been such that this year’s Com­mit­tee on the Sta­tus of Women con­fer­ence, which is con­vened an­nu­ally by the United Na­tions, in­vited Ms. Ruto to New York in March to speak about JoyWo’s in­no­va­tive ap­proach in em­pow­er­ing women through ta­ble bank­ing. She shared the groups’ suc­cesses and chal­lenges, and what other coun­tries could learn from her ex­pe­ri­ence. Ms. Ruto was hon­oured by the Cen­tre for Women in Lead­er­ship with an Honorary Fel­low­ship Award from Bi­nary Univer­sity in Malaysia for her out­stand­ing work with women. She has also re­ceived the Most Distin­guished Alum­nus Award from her alma mater—Keny­atta Univer­sity—for her work with women.

To make run­ning the JoyWo in ru­ral coun­ties eas­ier, mem­bers form smaller groups of about 15 to 35 mem­bers at the vil­lage level. They con­trib­ute money based on the abil­ity of each mem­ber and the group’s con­sti­tu­tion. Each group has a min­i­mum and max­i­mum amount each mem­ber can con­trib­ute, to en­sure that all the women are on the same eco­nomic level. Each mem­ber is given a pass­book to record trans­ac­tions.

From the money placed on the ta­ble, a mem­ber can bor­row up to twice her con­tri­bu­tion, re­ferred to as “shares”, for short-term loans to be re­paid within three months. A long-term loan, which can be up to three times a mem­ber’s shares, has a re­pay­ment pe­riod of 6 to 36 months. Since loans are pro­cessed at the smal­l­er­group level, and be­cause the mem­bers meet monthly, it takes a month to process a long-term loan, while short-term loans are given on the spot.

To the smaller groups, JoyWo gives in­ter­est-free loans, and col­lat­eral is mostly in the form of guar­an­tors. The small groups in turn who re-lend the money, charge their mem­bers 10% in­ter­est for short-term loans and 12% for long-term loans. The in­ter­est forms part of the re­volv­ing fund and is paid back to mem­bers as div­i­dends at the end of the year. In 2014, for in­stance, $1.5 mil­lion was paid out to the women as div­i­dends.

As a re­sult of its pop­u­lar­ity and its im­pact, big or­ga­ni­za­tions have formed part­ner­ships with JoyWo, of­ten through do­na­tions or train­ing. These or­ga­ni­za­tions in­clude UN Women, the Ford Foun­da­tion, Hivos, Kenya Com­mer­cial Bank, Kenya In­sti­tute of Busi­ness Train­ing, Unilever and In­tel, among many oth­ers.

More than just money

To pro­mote ta­ble bank­ing coun­try­wide and make it more ef­fec­tive, Ms. Ruto re­al­ized that train­ing should go hand-in­hand with bor­row­ing. En­tre­pre­neur­ial skills, for ex­am­ple, could help in­crease prof­its, so she in­tro­duced dif­fer­ent types of busi­ness train­ing. The cour­ses in­cluded train­ing in “agripreneur­ship” to help turn peas­ant and small-scale farm­ers into en­trepreneurs, since more than 90% of JoyWo mem­bers live in ru­ral ar­eas in a coun­try where three- quar­ters of the pop­u­la­tion de­pends on agri­cul­ture for sus­te­nance.

JoyWo has also cre­ated mar­ket ac­cess pro­grammes un­der which its spe­cialpur­pose ve­hi­cles are avail­able to mem­bers so they can mar­ket their pro­duce col­lec­tively. It has even gone fur­ther and now has a hous­ing pro­ject that al­lows mem­bers to build and own af­ford­able homes.


Like any other or­ga­ni­za­tion of this size that is rapidly ex­pand­ing, JoyWo faces some chal­lenges, such as loan de­faults, which cur­rently stand at a rate of 2%.

“This is why we al­ways in­sist that mem­bers should know and be able to vouch for one another,” says Ms. Ruto.

JoyWo en­cour­ages mem­ber­ship from diver­si­fied fields across a wide so­cioe­co­nomic spec­trum, she says, es­pe­cially in re­mote ar­eas where non-read­ing mem­bers have to rely on their more lit­er­ate col­leagues. “We be­lieve in em­pow­er­ing women through ed­u­ca­tion, so we have started an ed­u­ca­tional ini­tia­tive known as Jawabu to lift the lit­er­acy lev­els amongst our mem­bers.”

JoyWo is an ex­am­ple of how women are mo­bi­liz­ing at the com­mu­nity level against years of dis­crim­i­na­tion and the struc­tural sys­tems that disad­van­tage them, par­tic­u­larly in terms of ac­cess to fi­nan­cial ser­vices.

Poverty and gen­der in­equal­ity go hand-in-hand. UN Sec­re­tary- Gen­eral Ban Ki-moon says the world will never re­al­ize 100% of its goals if 50% of its peo­ple (women) can­not re­al­ize their full po­ten­tial. “To be truly trans­for­ma­tive, the post2015 de­vel­op­ment agenda must pri­or­i­tize gen­der equal­ity and women’s em­pow­er­ment,” he said in his mes­sage mark­ing this year’s In­ter­na­tional Women’s Day.

As the Third In­ter­na­tional Con­fer­ence on Fi­nanc­ing for De­vel­op­ment gets un­der way in Ethiopia, gen­der rights ad­vo­cates are hop­ing that fund­ing for gen­der equal­ity and the em­pow­er­ment of women will be given due pri­or­ity. In the post-2015 de­vel­op­ment agenda, fund­ing for gen­der goals will be crit­i­cal, given that the ma­jor ob­sta­cle to the ful­fil­ment of Mil­len­nium De­vel­op­ment Goals on gen­der was lack of suf­fi­cient funds.

In the mean­time, the women at JoyWo con­tinue with their ex­pan­sion plans. In­stead of com­plain­ing about lack of fund­ing, the or­ga­ni­za­tion plans to use their con­tri­bu­tions to reach a mil­lion women in all the 47 coun­ties in Kenya by 2017, be­fore ex­pand­ing through­out the rest of the East African re­gion. It also plans to in­crease its long-term loan port­fo­lio from the cur­rent $1.2 mil­lion to $12 mil­lion by 2016.


A ta­ble bank­ing ses­sion in Sam­buru, Kenya.


Rachel Ruto, founder of Joy­ful Women

Or­ga­ni­za­tion (JoyWo).

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