This is an income-generating project, initially designed to assist single mothers and widows to start small-scale businesses and earn a living for themselves and their families. The program started in the year 2001, and is based in Mathare Valley. The program started with only five women but its membership now stands at 100 women, who are fully, engaged in various small businesses activities within Nairobi City. The program has expanded to support all the slum poor regardless of gender, and currently targets women, youth and men. The program also offers business skills training to the current and potential members. Other services provided are businesses counseling follow up and day to day advice on any problems that arise.
To understand the problems of the community better and devise ways of addressing those problems, the project initiated community participatory brainstorming sessions in which affected women were encouraged to share their problems and together devise/identify possible solution. At such meetings, professionals, particularly in income generating activities, were invited to share their experiences with our clients and guide them in generating business ideas. Participants were encouraged to think about how they could do business.
After several meetings of analysis and evaluation of various business options, the idea of a tea kiosk was born. This business option appeared simple and less costly to start. Women provided cups, pots and other supplies, while the program raised the initial investment in rent. All the women were involved in managing the business at the initial stages. Since a majority of the women were illiterate the main component of the initial program was to train women on how to run a small business. Although the business made very good profit, the money received was not enough to be shared out to all women.
It was then found necessary to look at other business options. Three women per week were assigned to run the original business alternately, while others were encouraged to try different business options, such as selling charcoal firewood, groceries, retail shops and selling second hand clothes. These businesses did not progress well since women started having problems with the authorities. At that time, the political situation was very unstable and no meetings were allowed without a permit, and the authorities closely watched every social gathering. Since it was difficult for women to meet and plan under such circumstances, it was found necessary to register the group.
As the group continued to work, other constraints such group dynamics and individual differences started to emerge and compromise the businesses that were running at the time. The program therefore begun to encourage individual business initiatives based on cooperative movement principles, while the organization became a micro finance institution that provided soft loan to members. Members were trained on practical skills of running a business and in bookkeeping, and supported by the project manager to start of the business. There are now a total of 100 members who have received/are receiving financial support from the project.
Process
New members can join the group through two main ways. First, existing members are asked to propose new members whom they know personally and think can do good business. Once contacted, these members are introduced to the Project Manager who, after interviewing them, asks them to complete a detailed questionnaire providing information about themselves and the business they wish to start. Further, the new applicant is asked to suggest a guarantor to countersign the form. New members have to be in groups of five before they are considered for a loan. The group therefore provides loan security for one another. Others come by themselves and ask to be assisted to start a business. These too follow the process as above, and are assigned to a group.
Out of the 100 people that we have as members, only fewer than 30 are married. Once registered the business activities continue to be operated at the team level. Each team comprises of 5 members who meet regularly to review the business progress of its member. All members are required to attend the meetings without fail. Failure to attend the meeting attracts a 5 percent penalty.
To register as members, new members are required to pay non-refundable fee of Ksh. 200. At any single time the number of new applicants is often more the project can support. This indicates that there are more many needy people that require credits, to start a small business. There are always people on the waiting list.
Initially the amount loaned out to new member was Ksh.1,500, but the figure has now been increased to Ksh.3000 (about US$ 37). Since it was found to be inadequate, the loan is repaid at the rate of Ksh. 275 weekly. There is a two-week grace period, within which the member should start repaying the loan. Other group members are held responsible if one of its members fails to remit the money. There is 7 percent’s weekly surcharge if one fails to repay the loan on schedule. If members successfully repay the loan then they are allowed to proceed to the next phase and are loaned a further Ksh.3000.
The third phase loan is Ksh.6000. a service charge of 10 percent of the amount loaned is levied and is used to organize seminars, provide training and to meet the day-to-day project administration cost.
Management
A project manager who has basic qualifications in entrepreneurship heads the program and guides new business start-ups. He often works together with team leaders, and sometimes contracts the services of casual workers. The project manager reports to the director who visits the project at least once per week. The project offices are located within the Mathare slum area. Once a month, there is a one-day seminar, organized specifically to equip the members with new business skills, and to assess the general progress of their business.
