Community-based credits give boost to women’s businesses

By | December 20, 2013

In the previous post  Lina Muñoz González explained how women from 11 families in Colombia paid a set amount into a community fund to set up a market stall. The success of this led them to set themselves up in a more formal way to do business for the development of their community.

This current post takes us to Nairobi, Kenya and a group called the Sujali Women’s Group. It is a report on a small group of women who have built on their existing financially supportive relationship to boost their businesses through micro-credits. It is written following an interview with the women about the impact the micro-credits had on their businesses and their ability to support themselves and their families.

York St John University, UK, is leading a project on enhancing studies of the social economy in higher education. If you have a case study about the difference micro-credits or other community-based financial arrangements can make to communities, please post a reply or email us or contact us on Twitter @YSJSocialEcon.

The Sujali Women’s Group (SWG) is part of a larger group of 11 women. The group had already operated a ‘merry-go-round’ system of giving money to one of their members each month, thus allowing each in turn to have a cash injection once every 11 months. Mary Kiguru, the founder of the group, was inspired by an initiative called Jamii Borastarted by Ingrid Munroe in which instead of giving donations to street women, she encouraged them to save small amounts and learn the rudiments of business.

In June 2013, a donor offered £500 (approx. US$800), the equivalent of Kenyan Shillings (KES) 66,300.00. Initially, the group started with three women and each borrowed KES22,100. The money was paid back over a period of 5 months at the rate of KES4,650 per month (interest rate 1% per month). The interest was based on the current cooperative interest rate of 1% per month. The women reported that they could not obtain interest at that rate but might have to pay 18% per annum from other lenders such as the Kenya Women’s Scheme.


Left to right: Mary Kiguru (founder and mentor of the group), Eunice Mama Magiri, Susan Wangui, Jacinta Waceke, Alice Muthoni and Mike Calvert from York St John University

A fourth woman borrowed KES20,000 to pay back KES22,000 over a period of 4 months. This money was generated by the monies that were being paid back by the other three. She paid back KES11,000 over two months and paid off the remainder ahead of time so as to access further funds.

The resulting capital has grown to KES71,750.00 and this has been augmented by a further injection of funding to raise the capital investment to KES100,000. It was decided that, for now, the initial four beneficiaries would be able to access new funds to continue their investments and that after this round, there might well be an opportunity to allow a new member to borrow. There was a sense that it was better to develop the experience and knowledge before offering it to others. It is hoped that the four women will be able and willing to mentor others as well as provide the moral support that has sustained the group to date.

The group has been sustained by regular meetings and it has benefited from the fact that one of the beneficiaries is the mother of the instigator, Mary Kiguru, who has considerable enterprise experience.

The women met at a hotel with the donor and the co-ordinator and they each in turn told their story of how the money had transformed their lives. Most chose to speak in Swahili and Valentine Nkoyo, a business graduate of York St John University interpreted for the women.


Susan Wangui

Susan needed the money to expand her boutique. She sells clothes and cosmetics. She started by selling goods from home. As her customer base increased she needed the capital to expand. She had identified an opportunity but her limited finance was a brake on expansion. She regarded the funding and the funder as a ‘tyre jack’ (piga jecki in Swahili). She had found it easier to pay back the money than she had anticipated. She now employs one person to run the shop which frees her up for other tasks.

She had increased in business confidence as a result. Her aim was to register modest profits. She concentrated on customer care and customers speak well of her business. The principal challenge was the balance of what to take as salary and what to re-invest. This was seen as a delicate balance.

Jacinta Waceke

Jacinta was a housewife before meeting Mary. She earned her living by going to people’s houses cleaning clothes – an arduous and poorly remunerated task. She had acquired a kiosk but there was no produce to sell. The capital had enabled her to establish a greengrocery business. The intention was to have the kiosk divided into three sections to host a ‘hotel’ meaning a canteen and a shop. She intends to employ someone else to work with her.

Alice Muthoni

Alice used the money to expand her egg business. The issue for Alice was cash flow as it takes four and a half months to rear the chickens until they produce eggs and the cost of food, upkeep and electricity means that there are considerable outgoings but no income until the eggs are laid. She described herself as ‘almost stuck’. The income will enable her to have continuity rearing another batch of chicks whilst the others are laying eggs. She is now selling 16 trays a day (thirty per tray) and making KES1000 profit per day. The market demand is high for eggs. She is also selling the manure from the chickens adding to her income.

Eunice Mama Magiri

Eunice had been in the tailoring trade since 1986. She moved to her current place and had increased responsibilities for school fees and the house. She had visited Susan to request money when she learned of the project and requested the loan of KES20,000. She was not new to the market but needed the funding when she received an order that she could not source for lack of funds. This enabled her to supply clothes to Eldoret. She now had many orders and was keen to get more funding to allow her to expand.

Benefits and impact

Susan spoke of increased business confidence and the fact that she felt more independent and not bothering her children for money. The regular attendance at meetings meant that the original three met each other and there was a group dynamic. There was evidence of knowledge transfer and the beginnings of mentoring. For Jacinta, the benefits were that she was able to feed her three children better. Alice was proud to be able to contribute to her family. Eunice said that she was proud to be able to look after herself.


Amount Invested Amount in KES




Total Amount        100,300.00
Interest Accrued             5,450.00
Total re-invested        105,750.00


Funds Disbursement:

Amount in KES
Initial Fund of KES 66,300 given to three women


Each Woman received


interest of 1% per month on the Principal


Monthly payment (x)


x + Interest – rounded off to KES4,650


The fourth woman borrowed from the money returned by the three women




Monthly payment