Bank micro-lender on rural women’s groups

Business

Bank micro-lender on rural women’s groups


Bidhaa Sasa founder Rocío Pérez (right) and director of micro-lender Vihiga, Alifia Kamadi. PHOTO | COURTESY

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Summary

  • Bidhaa Sasa earns money by sourcing wholesale for the items which are then sold at wholesale price through the women’s groups, thus ensuring a high refund rate.
  • The lender claims that the repayment capacity of each group of women is profiled and used to determine their future financial exposure to each group.

For a long time, financial institutions avoided betting on rural women, especially those considered poor.

The logic of this financial exclusion is that this category of people is risky because they do not have the required guarantees.

However, with the advent of chamas (groups), rural women are starting to appear viable, as micro-lender Bidhaa Sasa realizes.

For four years, the micro-credit institution, which has granted more than 300 million shillings in loans to women’s groups, was launched in 2015 in Bungoma by David Disch and Rocío Pérez. The lender has made a name for itself selling solar lamps and kits as well as cooking gas, energy-saving jikos and post-harvest loss products through chamas on credit.

“This is an underserved community whose financial capacities remain untapped and its has meant self-pity, lack of enthusiasm and an extremely boring life for rural women,” Ms. Perez said. in a virtual interview.

Viewing rural women as poor, she notes, deprives them of a chance to improve their way of life and makes many believe that “some household products belong to the big cities.”

“Local banks and microfinance institutions hardly see rural women as viable clients due to their extremely low income status, lack of financial history and lack of collateral,” she adds.

The situation is exacerbated by the exclusion of public investments which largely target regions and classes rich in voices predominantly in urban centers while ignoring the development needs of remote regions.

“Kenya should consider investing in critical infrastructure in rural areas to deter the increase in rural-urban migration which is leading to the stretching of infrastructure and public amenities as well as the proliferation of slums,” adds she does.

Bidhaa Sasa, she says, has succeeded in redefining rural life and discovered a new dignity in rural women who use their groups to improve their lot. This ensures collective accountability to specific causes such as livestock education and immersion committees, prayer cells as well as market groups.

“We never invented any of these groups, but we just plugged in our business model which understands their low income status and offers them products that help them save money and improve their livelihoods,” she says.

Without guarantees, notes Ms. Perez, each women’s group closely monitors its members and ensures that repayments are made on time. The defaulters will see their equipment taken away.

“Rural women need decent, safe lighting for their households, but cannot afford electricity. We saw this gap and used our own savings as seed capital to facilitate low-interest loans to purchase items requested by women’s groups, ”she says.

Ms Perez says that as women and their families realized health benefits and monetary savings through the use of cooking gas and solar lighting, their groups became stronger and stronger, becoming avenues. where the relevant problems affecting them are discussed and solutions sought.

Bidhaa Sasa earns money by sourcing wholesale for the items which are then sold at wholesale price through the women’s groups, thus ensuring a high refund rate.

“We approached local banks for funds to purchase our products and engaged product suppliers for credit, but none listened to us. Banks want collateral and vendors can only extend credit for a month, so where do we serve these low income customers? She poses.

She argues that excluding rural women from economic activities only denies Kenya an opportunity to harness their capacity to contribute to national economic development.

The company, which now employs 80 people, has postponed its expansion plan in Uganda until next year due to a lack of funds.

The lender claims that the repayment capacity of each group of women is profiled and used to determine their future financial exposure to each group.

“We are surprised that the women’s groups have managed to gain the upper hand with all repayments now on schedule. This is because of the savings made through the use of our products, ”she says.

“Those who used to buy kerosene for their lamps now rely on solar lanterns, while safer food storage means less waste and more savings. “

HIGHER MARGINS

Ms. Perez says higher volumes in product sourcing mean higher margins and lower product prices.

They are currently seeking patient funds from partners to enable them to deepen their ability to provide micro-loans for the purchase of household products where women’s groups decide repayment rates.

Bidhaa Sasa’s business model saw him shortlisted for possible funding by the Vodafone Institute last month.

Bidhaa and other shortlisted startups from UAE, Rwanda, Uganda, Chile, Brazil, UK, Pakistan, Sweden and Denmark will receive personalized support for five weeks, mentorship, training, networking and access to an impact investor network program before the last virtual pitching event on November 5th.

Bidhaa Sasa has not been spared by the challenges posed by Covid-19. Refunds in April and May fell as most of their 60,000 members lost their jobs.

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