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UBUNTU MICROFINANCE PROJECT

The Ubuntu Microfinance arm in partnership with Hekima-Self help Group currently operates in three major open-markets in Nairobi, Kenya namely: Marikiti, Uhuru and Gikomba.
The business is guided by the following tenets:

1. An exclusive focus on the poorest of the poor, with an inclination to women:

Exclusivity is ensured by:

1. establishing clearly the eligibility criteria for selection of targeted clientele and adopting practical measures to screen out those who do not meet them
2. in delivering credit, priority has been increasingly assigned to women, whose urge for survival has a far greater bearing on the development of the family
3. the delivery system is geared to meet the diverse socio-economic development needs of the poor.

2. Borrowers are organized into small homogeneous groups.

Such characteristics facilitate group solidarity as well as participatory interaction. Organizing the primary groups of five members and federating them into centres has been the foundation of the micro-finance system. The emphasis from the very outset is to organizationally strengthen the chosen clientele, so that they can acquire the capacity for planning and implementing micro level development decisions. The Centres are functionally linked to the lender (Ubuntu Investment Group), whose officials attend Centre meetings every week.

3. Special loan conditionalities which are particularly suitable for the poor.

These include:

1. very small loans given without any collateral
2. loans repayable in weekly installments spread over a year (52 week period)
3. eligibility for a subsequent loan depends upon repayment of first loan
4. individual, self chosen, quick income generating activities which employ the skills that borrowers already posses
5. close supervision of credit by the group as well as the micro-finance team
6. stress on credit discipline and collective borrower responsibility or peer pressure
7. special safeguards through compulsory and voluntary savings to minimize the risks that the poor confront
8. transparency in all lending transactions most of which take place at centre meetings.

4.Simultaneous undertaking of a social development agenda addressing basic needs of the clientele.

This helps to:

1. raise the social and political consciousness of the newly organized groups
2. focus increasingly on women from the poorest households
3. encourage their monitoring of social and physical infrastructure projects - housing, drinking water, education, family planning, sanitation etc.

5. Design and development of organization and management systems capable of delivering programme resources to targeted clientele.

In the foreseeable future, the Ubuntu system will evolve gradually through a structured learning process that involves trials, errors and continuous adjustments. A major requirement to operationalize the system will be the special training needed for development of a highly motivated staff, so that the decision making and operational authority is gradually decentralized and administrative functions are delegated at the zonal levels downwards.

6. Expansion of loan portfolio to meet diverse development needs of the poor.

As the general credit programme gathers momentum and the borrowers become familiar with credit discipline, we plan for other loan programmes to be introduced that meet growing social and economic development needs of the clientele.
Besides housing and primary education, such programmes extended to seasoned borrowers will include:

• loan for leasing equipment / machinery, i.e., cell phones purchased by Ubuntu Investment Group clients
• credit for seasonal cultivation to buy agricultural inputs
• credit for enhancing sanitation by building sanitary laterines and for securing clean drinking water thru’ installation of tubewells that supply drinking water and irrigation for kitchen gardens.