Chome Village Microfinance Scheme
Generally speaking, microfinance is the provision of small, unsecured loans to self-employed, low-income entrepreneurs in both urban and rural areas of the developing world. By providing credit to people who would otherwise not have access to it, microfinance enables loan recipients to pursue income generating activities that hopefully become profitable and self-sustaining.
Sequoia have provided funding for the establishment of a self-help group in Chome Village. This group, called Ditesiane Wa Chome ("ditesiane" is a Taita word meaning "development") gives out loans to small businesses and entrepreneurs from the village. Anyone wanting a loan must first submit a business plan to the group, which then agrees the loan amount and the payback period. All loan recipients then receive basic book-keeping and small business training.
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Loans vary in size, but do not exceed £150. Payback terms are also variable, but since many are used in agricultural projects, there is typically a lengthy grace period before the first repayment.
A key aim of the fund is that it should be self-reliant. Interest is therefore charged on the loans to cover defaulted loans and the low administrative costs incurred by Ditesiane Wa Chome; one of the members of the group is employed as a book-keeper in order to monitor the fund’s performance.
So far, 30 loans have been approved, and another 30 are waiting to be financed. As the initial loans are repaid, so financing for further loans will become available. All the supported projects are based in Chome Village, and have so far included bee-keeping, pig rearing and a host of dairy related activities.
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Collecting milk from farmers for delivery to the dairy |
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