LONGITUDE FINANCE: DEEPENING FINANCIAL ACCESS IN KENYA

According to the 2021 report by Fin Access sponsored by the Central bank of Kenya (CBK), Financial Sector Deepening (FSD) and the Kenya National Bureau of Statistics among others, the national access to financial inclusion in Kenya has hit 82.9 percent, an improvement from 26.7 percent within a decade. This shows the important role the microfinance sector has played in enhancing financial inclusion. However, the report further shows a whopping 11.6% is still excluded from both the formal and the informal financial systems. Another report, the Kenya Economic Report 2020, produced by the Kenya Institute for Public Policy Research and Analysis (KIPPRA), shows that 17% of the population which is still excluded from access to formal financial services is mainly in the rural areas.

Longitude Finance prides itself to have greatly contributed to this development since its establishment in July 2015 through supporting selected small business groups and reaching out directly to over 5,000 small and medium enterprises (SMEs) through affordable microloans, micro-insurance, venture capital, training and capacity building, thus encouraging financial inclusion while ensuring that the members of the business groups, embrace banking and basic best practices in financial management.

Longitude Finance acknowledges that financial inclusion is crucial for growth especially in achieving Kenya’s Vision 2030 and attaining some of the Sustainable Development Goals (SDGs. Therefore over the years, the lender has worked with like-minded partners, to ensure financial services and products are available at the bottom of the pyramid.

Through a tripartite memorandum of understanding (MOU) with United Nations High Commission for Refugees (UNHCR) and the International Labour Organization (ILO), Longitude Finance has been able to reach out to over three hundred urban refugees in Nairobi and Kitengela towns and equipped them financial and business management training. Most of them have benefited from business expansion loans with a projection of disbursements of Kshs. 25 million over the next 18 months. Through this partnership, Longitude Finance has benefited from technical assistance from ILO in terms of building its internal capacity to serve refugees and host communities who have previously been excluded from the conventional banking system.

Through other partners – the Institute for Social Transformation (IST) and Tangaza University College in a programme dubbed Uni-Mtaani (university in the neighbourhood), Longitude Finance has been able to administer social entrepreneurship training and administer seventy per cent of the trainee’s business development loans in Nairobi’s slums including: Kibera, Huruma, Dandora, Kiamaiko, Kariobangi and Korogocho. The impact of this initiative is highly visible through various testimonies.

Through our Umbrella body, the Association of Microfinance Institutions- Kenya (AMFI-K), Longitude Finance has partnered with Water.org in a programme that is aimed at enhancing water credit adoption.

To that end, Longitude Finance received training and technical assistance in product development and awareness creation through provision of marketing materials. Courtesy of this initiative, the lender has disbursed Kshs. 30 million, reaching out to rural and peri-urban target market.

Additionally, as a member of AMFI-K, Longitude Finance has received technical assistance in terms training from the association’s partners such as Spakassen Foundation which trained Longitude Finance Staff as trainers of trainers (ToTs) on mobile business games, product development, rollout and sustainability. It also facilitated training on responsible inclusive finance by Social Performance Task Force (SPTF). AMFI-K has also facilitated linkages to various partners who are aligned to the mission of Longitude Finance.

Other partners include X-SOLAR (MPAYG), for the supply and distribution of solar home systems and University of Oxford/ MARS research for business of mutuality as well as Steve Adams Foundation in a the accelerator programmes for startups.

Longitude Finance has grown over the years and it has a presence in four counties: Nairobi, Mombasa, Kajiado and Murang’a. The lender has five fully fledged branches in Nairobi’s central business district, Ntashart Plaza along Kilimani road, Muranga town and Moi Avenue in Mombasa. Due to increased usage of mobile phones and in order to improve efficiency in customer outreach, Longitude Finance has developed a mobile application LoKash. It doubles as a loan application app and a loan management system that allows customers to view their loan balances and also repay. It has also enhanced efficiency in delivery of the lender’s services to its existing and new markets countrywide. To date, LoKash has over 6,000 users registered on the platform. He operated the micro enterprise from his rental home in Nairobi’s Eastlands.

He underwent training from Longitude Finance which opened up his mind. After the training, he started installing sanitary bins in schools and other organizations as another line of business. With the emergence of the Covid-19 pandemic, Nyulia received another loan facility to venture into production and distribution of sanitizers. He was able to attract donors and this made his business grow.

ENTREPRENEUR’S FORTUNES CHANGE AFTER BEEN TRAINED BY LONGITUDE FINANCE

In 2019, Joshua Nyulia received a loan to set up his company, Guardian Kenya, from Longitude Finance. It specialized in making detergents, disinfectants, sanitizers, hair shampoo and conditioners. He employed two people directly in his shop. He supplied these products to schools and households. rior to his training David Muhuthu Mwaniki, a resident of Kiamaiko used to sell butchers’ knives along the streets of Nairobi. He rarely kept a record of his stock and revenue. The value of stock was only Kshs.5, 820.

After being trained by Longitude Finance, he was able to save and acquire a loan under the “Uni-Mtaani” programme. This enabled him toadd a variety of household items to his stock. The new line of business grew with the help of several loan facilities. His income doubled. Muhuthu’s stock is now valued at Kshs.58, 215 and he has constructed a permanent structure. He is now actively training his friends on the Tangaza modules and referring others whenever the sessions are on.