Power behind women’s finance

By Evelyne Ogutu

Twenty years ago, it would have been impossible for an unemployed woman to walk into a financial institution and get a loan due to lack of security.

But two decades later, that has changed thanks to micro-finance institutions.

The gear has shifted from merry-go-round or chama and many are now members of micro-finance institutions.

Micro-financiers, most of them targeting low-income women, are now entering a new era as the Central Bank of Kenya vets applications from institutions seeking to start taking deposits.

CBK has approved 20 business names to take deposits and one has been licensed. Dr Jennifer Riria, the CEO of Kenya Women Finance Trust (KWFT), one of the pioneer movers of micro-finance, has turned round what used to be a moribund institution into a profit making organisation with more than 298,000 clients. She is challenging women to embrace micro-finance to uplift their economic status.

For Riria, a micro-finance expert and gender specialist, it is a dream come true as KWFT gets the green light to start taking deposits and offering other financial services to women. This, she says, will turn round lives of unemployed women.

Dr Riria with President Kibaki at a past function.

The mother of three daughters, quit a job as a professor at Kenyatta University and later at Unicef to revive a financially strapped micro-finance institution that had a massive uncollected loans to the tune of Sh2 million.

Profit margin

Now, 18 years later, she has turned around KWFT to be one of the leading micro-finance institutions. By last year alone, the trust had disbursed Sh9.1 billion with a profit margin of Sh570 million.

The internationally recognised micro-finance guru took the task of raising funds, re-organising the administration, re-building ties with international organisations and expanding the organisation’s outreach.

Her efforts have borne fruit and KWFT is one of the largest micro-finance networked organisation, and one of two that have been given authority to take deposits from clients targeting women only. The other is Faulu Kenya, that targets women and men.

Beginning this month, if Central Bank authorises, KWFT DTIM (Subsidiary) will commence mobilisation of savings for lending to its clients, explains Riria in a recent interview.

Riria, a PhD holder in Women’s Empowerment and Education, says for Africa to develop or achieve the Millennium Development Goals and the economic blue print dubbed Vision 2030, there is need to put resources including finance into women’s hands.

This, she notes, is achievable by using micro-finance institutions, which should target the poor woman.

"In order to address poverty and increase the ability of women to be economically independent, the micro-finance sector has proved to be a viable vehicle in assisting women start sustainable projects and improve their livelihoods," says Riria.

Many roles

Riria also serves as the vice-Chairperson of Women’s World Banking Board, Postbank Pension Fund and sits on the board of the National Bank of Kenya.

She says most micro-finance organisations are built on the belief that women can transform their lives, those of their families and the way the world works through entrepreneurship.

"For instance, at KWFT the woman is the entry point but the assistance she gets from the institution assists the whole family," she says.

Women form the bulk of the productive population contributing more than 50 per cent in labour, but only accessing one per cent of the wealth created. However, most of them are unable to access credit because they do not own property.

According to a gender index released recently by the Ministry of Gender and Children Affairs, although women form 52 per cent of the population, they are still lagging behind in economic development. Gender Minister Esther Murugi says that not empowering the woman economically, denies nations the opportunity for greater economic growth.

"To achieve MDGs and Vision 2030, concerted efforts by all sectors are needed to ensure women’s economic status is elevated, adds Murugi.

Riria explains why she believes women can transform society.

"I know if women are given resources they can boost not only their family’s economic status, but also the country. Micro finance institutions that target the majority poor and have major outreach such as KWFT are best suited for intervention on poverty eradication, as opposed to pyramids schemes," she says.