Over the years, we have taken keen interest in covering Kenya’s microfinance sector. This is mainly because it takes a lot of patience, resilience and faith to start a business informally, possibly in a congested market or a dingy backstreet with only a few coins and then grow it to a successful outfit. This is a herculean task that the faint hearted dread. Yet, that is the world of microfinance. Women selling foodstuff or an assortment of wares in a market while the sun is scorching, men pushing heavy handcarts in congested and noisy streets, farmers waking up in the wee hours of the morning to water their vegetables… yes, that is all in a day’s work for micro-entrepreneurs determined to make it in the tough world of business.
What most of them need is just an understanding partner who is ready to assist them scale up and overcome cash flow challenges. Granted, finance is the blood that flows in the veins of business. Without finance, businesses bleed to death. Nevertheless, the seemingly unattractive businesses that are carried out by micro entrepreneurs in the informal sector are shunned by most of the mainstream financiers. They are conveniently labeled ‘high risk’ by some big boys in banking; never mind the loads of cash they are able to mint on a daily basis. That is where microfinance institutions have come in handy. Holding the hands of micro-entrepreneurs with the zeal to succeed, they have guided them to prosperity through financing and capacity building; transforming lives and livelihoods in the process. These stories are quite moving and they demonstrate the importance of doing business with a human face. Profits, in our view, should be a product of having the interest of your customers at heart – and not vice versa.
The arrival of the agile fintechs in the market may have spoilt the party for micro financiers but let that serve as a wake up call! Instead of lamenting, they should respond by embracing technology as well. Let them engage a higher gear in developing products that are technologically driven. Such products should be convenient and cost-effective. In essence, that should define the future of microfinance. The cheese as it were, is gradually moving from the traditional group lending methodology to the uncharted world of technology.
As we usher in 2020, we celebrate the achievements of the Association of Microfinance in Kenya (AMFI-K). Being the umbrella body of Kenya’s microfinance sector, AMFI-K has made great strides since its inception twenty years ago, despite encountering a whole myriad of challenges. Indeed, it takes a heart of steel to weather such storms. Kudos to the association!
WE WISH ALL OUR READERS, ADVERTISERS AND PARTNERS A VERY REWARDING 2020.
WE ARE PROUD TO BE ASSOCIATED WITH YOU!