People living below the lowest rung on the ladder of development generally lack access to traditional microfinance institutions, particularly in rural areas. Village Enterprise strives to fill this gap by promoting financial education and inclusion in a critical component of the model called the business savings group (BSG). The BSG provides our “unbanked” business owners access to credit as well as acts as an essential financial cushion when a household faces expenses like illness, crop failures, or unanticipated education fees. I had the privilege to witness the benefits of the BSG when I visited Kewa Village, Kenya last week. I quickly realized the BSG is not just a financial institution, but is also a space where friendships grow, solace is sought, and where entrepreneurial ventures blossom.
From the moment I walked into the dimly lit space in Kewa, it was clear who was running the show. Seated in the corner of the room was a man wearing a bright orange shirt and speaking in a charismatic manner that commanded attention. Zablon Migwe, also known as the Chairman. Business savings groups revolve around a democratic process through which members create a constitution and elect leadership amongst their members. Besides the chairman sat a woman with Kenyan shillings piled on her lap, Madam Treasurer, Hellen Mureithi. Rounding out the leadership team was a younger gentleman, pen in hand, Secretary David Wafula. The leadership team is essential to conducting effective meetings, holding members accountable, and empowering members of their community. Yet, ultimately, all decisions are made by the group as a whole. Florence Mangela explained, “before we take any steps forward, we sit together and discuss. We don’t discuss to disagree, we discuss to agree. If we don’t agree we will discuss until we find common ground.”
Every Thursday, this group of 30 business owners take their seats in the cool confines of a simple mud structure and get down to business. The chairman calls a name and a business owner approaches the leadership team, handing a few shillings to the treasurer. One of the key elements of a business savings group is the ability for its members to access credit. Prior to receiving the first grant from Village Enterprise, each business owner must participate in four months of business skills training, which includes modules on record keeping, as well as savings and group loan training. As business owners save and contribute to the BSG, they also have the ability to take out loans which are repaid with minimal interest. At this particular meeting, the transactions happening before my eyes were repayments on the loans business owners had previously withdrawn from the BSG. Zablon, the Chairman, emphasized the importance of this component of the BSG when he told me, “now we understand how to save and the loans we can take from our BSG help us to improve our businesses.”
Still, life happens- drought and disease impact crops harvests, family members fall ill, and school fees must be paid- and at times this means a member of the BSG cannot repay his or her loan on schedule. The chairman unfolded a piece of paper and began reading to the group. Jacky Wasilwa, the business mentor in Kewa, pulled me aside and explained “he is reading a letter because a man defaulted his loan. It is his warning.” The Chairman explained that this business owner must prove his trustworthiness and repay the original loan in order to receive a future loan.
At the end of the meeting, one of the business owners grabbed my hand and asked “please take a snap of the chairs.” I flipped my camera on and took a few pictures of the lines of blue and green plastic chairs that filled the room. Members of the BSG grabbed chairs and posed with glowing smiles. Clearly I was missing something. I looked at Jacky for clarification and she informed me that the BSG had saved enough to purchase a large set of plastic chairs. The BSG not only used these chairs for their meetings, but actually turned it into a business by which they earned a sizable profit by renting them to members of the community for events. That, in my mind, is the definition of the entrepreneurial spirit of Village Enterprise business owners.
It didn’t stop there. I followed the group as they meandered away from the main road and headed into the agricultural fields. We crossed narrow bridges built out of tree branches and carefully tip-toed through puddles of mud that are characteristic of this swampy area. We finally approached a plot of land with Mt. Elgon, an extinct volcano on the border of Kenya and Uganda, looming in the distance. Little bushels of green sprouted from the ground. This business savings group had teamed up to plant cabbage, kale, and bell peppers.
The business ventures of this BSG are without a doubt impressive. But it became clear the second we left the meeting that relationships in this group delved much deeper than just business. One business owner grabbed the hand of an older member to help her cross a stream. Elizabeth Adisa leaned in close to Elijah Gigeru to inspect the green peppers they had recently harvested and she pat him playfully on the back. Although I could not understand the back-and-forth banter in Kiswahili, it was evident that this group had become close friends. Jacky shared that a family member of one of the business owners recently passed away and that the BSG would be using a portion of their funds to pay for the funeral. This aside served as evidence of the remarkable support network the BSG provides.
As I strolled back to the main road with a sack full of green peppers from my new friends, I pulled my notebook out to record final details from my day. I asked Jacky if the BSG had a name, and she shouted back at one of the business owners that we had just bid our farewells to. The business owner shouted back “Tujiinue.” Jackie smiled and translated “let’s pull each other up.”
The Tujiinue business savings group stand proudly over their newly planted cabbage fields.
The leadership team collects loan repayments from their business savings group members. [from left: David Wafula, Hellen Mureithi, Zablon Migwe].
Lydya Nanjala shows off one of the plastic chairs her business savings group rents out for events in their community.