Yehu Microfinance plays big role in Kenya

Friday, November 4, 2005

One of the greatest stories in the CHOICE community is the rise of Yehu Bank, the microcredit organization that CHOICE board member Louis Pope developed, originally as a CHOICE program. Although Yehu was later spun off for accounting reasons, they still work closely together. And everyone in the CHOICE community can be proud of what Yehu accomplishes, supplying loans to nearly 7,000 women in Kenya with a 97% repayment rate.

Water plays a powerful role in our lives. In the village of Mwambalazi, with no infrastructure for water distribution, local villagers rely on water collected from simple bore-wells or murky ponds. Mama Shabaan lives on a 2 acre farm in a rural village along the south coast of Kenya. She sells her cash crops which include tomatoes and spinach at a local market. Her farmland contains a medium-sized lake.

Ironically, she was not benefiting from this substantial body of water as she relied only on rainwater to irrigate her crops. When asked if she had ever considered taking advantage of the remarkable body of water near her farm, she said that it was of no use to her because she had no way of accessing the water for irrigation purposes. When she was made aware of the simplicity of using a manual water pump available with a loan through Yehu Microfinance, she became eager to try it and was optimistic about how it could help her.

When the manual water pump was introduced, it was decided that it would be used on a daily basis during the dry season and an alternating-day basis during the rainy season. The pumped water was used to irrigate 2 acres of farmland on which the following crops were grown: kale, spinach, and tomatoes.

After using the manual water pump for 5 weeks, the increase in income received from the sale of cash crops was 447%–she went from earning $22 a week to $122 per week! Unlike other farmers who rely solely on rains for irrigation, Mama Shabaan is now able to minimize the fluctuations in her weekly income by producing and selling crops continually throughout the different seasons.

Yehu Microfinance was able to introduce her to simple technology together with a business model, a “MicroFranchise” that she did not know existed, and provide her with a loan to acquire that technology which had a tremendous impact on her ability to generate income in only 5 weeks.

Mama Shabaan was able to pay back her $90 loan within a month. This business model also allows her to sell water to other villagers without access to a pond like she has, or to rent her pump to neighbors to irrigate their crops as well. Yehu Microfinance hopes to replicate this small MicroFranchise among its 10,000 members as one of a portfolio of business opportunities it is developing under its new MicroFranchise initiative.

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