Celebrating the Resilience of Women

Mar 10, 2020
Khalila Salim , Digital Financial Services Specialist, Africa Digital Financial Inclusion Facility (ADFI)

I once witnessed a women-led table banking group at the foot of Nandi Hills, Kenya and was impressed at how well they were organized. The women had graciously invited me alongside visiting partners to participate in their regular meeting. The idea was to interact with the group, understand how they operate and explore the technology innovations they wanted.

The group had 100 members, comprised of women and youth. The majority of the group members were small holder farmers (tea farmers) who also kept a kitchen garden and engaged in other economic activities such as chicken and goat rearing, bee keeping, and biogas production for household level consumption. A number of women within the group who didn’t have access to land were micro and small retail traders managing food kiosks, second-hand clothes shops, tailoring and hair salon businesses. I later learnt that the youth had requested to be a part of the initiatives these women were leading.

We met under a tent that had been setup to accommodate the large group. At the center of the tent, was a table with a wooden box secured with three padlocks, and accounting ledgers. Three women took a seat next to the box and they each got a key and opened the padlocks.

The process began with the cash counting of what was in the box, and a declaration of the amount that was deposited in the bank from the last monthly meeting. The figures were read out loud and the members verified them against loans repayments and regular contributions. The groups’ total savings and joint earnings were also discussed – the earnings were from some funds that were saved in a fixed deposit account; rental income from a joint low-cost housing program the women invested in; a community kindergarten; and aggregation and sale of honey.

Members were asked to deposit their monthly share contributions on the table (contribution is based on the number of shares each individual has subscribed to - minimum of 3 shares and maximum of 15).  Each amount was recorded accurately in the ledgers and cumulative amounts added using a simple calculator. When the process was over; total collections for the day was publicly announced – an estimated $3,000 USD. Members cheered and congratulated each other.

Next step was the collection of instalment payments for the loans i.e. members were allowed to take up to three times their shares at an 18% interest rate p.a. The interest rate was a non-issue as the group knew at the end of the year they would receive dividend payout against shares contributed.

I also learnt they had “forgivable loans” which was basically small loans ranging from $10-30 that a member could borrow with 0% interest but on condition it’s paid back within a week. The group had recognized that sometimes people run out of money for simple things like buying food when business is bad in a given day and would apportion funds to an individual to enable them to bounce back without the pressure of the repayments plus interest.

They also explained that they had a welfare fund that catered for funerals and weddings – a fixed amount of $500 per household had been set. Loans for healthcare were also interest-free and members would make an exception to meet and disburse the funds to allow timely access to medical care.

Business loans were apportioned based on criteria that included shares contributed and history of repayment. There was some flexibility in how many loans an individual was allowed to take as not all members wanted to take loans and so the ones who had appetite for loans were allowed to take more as long as they had settled the previous ones. Exceptions were also made for: 1) New widows that had been disinherited and have to care for their children; 2. Women that had experienced natural or man-made disasters such as fire that disrupted their businesses; 3. Women with priority needs for education payments (either for themselves or for their children’s higher education).

Most importantly, these decisions were reached by consensus with the group members. I asked the women if they had had any basic accounting classes and they all laughed and said no. That they came up with the group and the approach simply to address the pain points that they were facing.

They had however quickly realized that the approach of borrowing only three times the share was limited and had made two strategic partnerships – One with a local bank to enable additional access to funds and the second one with an insurance company to cover the risks of loans mainly when a member dies.

At the end of the session, families were asked to share inspiring stories – most of the women boasted their business’ revenue growth, graduation ceremonies for their children and upcoming birthdays, weddings and celebration of lives.

I asked the women and youth to share the impact of the savings on their lives:

  1. Many had used the kitty to fund their children’s education – proud mothers narrated how their kids were able to study medicine, technology, agronomy etc. including being able to fund studies overseas;
  2. Teary grandmothers narrated how they took care of their grandchildren after the sudden demise of their children either to accidents or diseases such as HIV and AIDs;
  3. Young women running different businesses from climate smart agriculture, to catering, to second hand clothes business recounted how they were turned away by formal banking institutions because they didn’t have an ID or a bank account. The known ones were termed “risky” and either turned away or given an exorbitant interest rate that they couldn’t dare to take for fear they would lose the only asset they own – a small piece of land less than 2 acres.
  4. Widows who had lost inheritance because their husbands didn’t leave a will narrated a story of hope – how when they hit rock bottom, the savings scheme made a huge difference.
  5. The youth shared similar stories about having challenges setting up traditional bank accounts and how the women came through for them.

And the list went on. I recall thinking – this is a form of banking but with a more social approach. A bank that cares about the welfare of its members and gives that personal touch for the populations at risk. The level of sophistication was impressive.

This story repeats itself in East African countries and in West Africa where tontines are a popular rotational scheme that resonate with women. It’s a powerful message from women that they are ready to work on solutions to resolve their problems and are ready to partner with organisations that care.

Though the women were still unbanked, their overall funds were secured in a bank and the table banking formed a collection and distribution channel. In Africa, it is estimated that 332 million are unbanked of which 60% are women. The women have found a way to blend the formal and informal financial services.

About the author

Khalila Salim is the Digital Financial Services Specialist for ADFI. Khalila brings with her over 15 years of experience in the digital financial services sector and innovations in Africa. Previously, she served as the Director for Business Development and Strategic Partnerships with Mastercard Labs for Financial Inclusion in East Africa. Khalila has led numerous innovation projects with USAID/ICF MacroPlan International, Avallain Africa among others, supporting innovations such as eLearning and mLearning and the application of artificial intelligence in secondary cities. Khalila holds a BSc in Information Sciences (Information Technology Major) from Moi University, Kenya and an MBA in Strategic Management from United States International University.

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