MADISON, Wis. — Ninety-three small and medium-sized businesses in Kenya secured a combined $2.5 million in financing through a year-long initiative aimed at expanding access to capital through credit unions, according to the World Council of Credit Unions.
WOCCU said the program, conducted with the Worldwide Foundation for Credit Unions, worked with three Kenyan Savings and Credit Cooperative Societies, or SACCOs — Unaitas, Boresha SACCO and Kenya Police SACCO — as well as the African Confederation of Co-operative Savings and Credit Associations Academy.
The initiative sought to address barriers that have historically limited lending to small and medium-sized enterprises, including a reliance on collateral and limited capacity among lenders to evaluate business risk and borrowers’ ability to repay, WOCCU said.
Tailored Training
Through technical assistance tailored to each SACCO, employees were trained to evaluate businesses based on factors such as cash flow and growth prospects rather than relying primarily on existing assets.
WOCCU said the 93 businesses receiving financing maintained nonperforming loan levels below 1%, outperforming the program’s target ceiling.
The initiative also produced five training manuals covering SME market research, loan appraisal, know-your-customer and anti-money laundering requirements, emerging risks, and environmental, social and governance issues. The materials were tested with SACCO employees through the ACCOSCA Academy and are intended for use by other institutions in Kenya and elsewhere in Africa.
Examples of Impact Shared
WOCCU cited several borrowers as examples of the program’s impact.
- Gaceri Wallace and her husband have operated an electrical and electronics shop in Thika for 16 years. Financing from Unaitas allowed the business to increase inventory and meet customer demand, WOCCU said. The company has since expanded to two locations, added two employees and increased monthly sales from 1.5 million Kenyan shillings, or about $11,600, to 2 million shillings, or about $15,500.
- In Murang’a County, Geoffrey Kagwanja Karuma used financing from Unaitas to expand an animal-feed business serving farmers, cooperatives and retailers. WOCCU said the company now generates about 1.6 million shillings, or approximately $12,400, in monthly sales.
Member More Important Than Collateral
“The business of the member is more important than the collateral,” Beatrice Mathu, relationship manager at Unaitas SACCO, said in a statement describing changes in the institution’s lending approach.
Nephat Murimi, head of SME lending at Unaitas, said the appraisal tools developed through the initiative have helped lay the foundation for a dedicated SME strategy that the SACCO plans to introduce across its branches.
Kenya’s regulated SACCO sector has more than one-trillion shillings, or about $7.7 billion, in assets, according to WOCCU. Nearly 29,000 credit unions across Africa serve approximately 46 million members.
WOCCU said it is working with the ACCOSCA Academy to distribute the training materials to SACCOs throughout Kenya and the broader African region.
