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I learned about the concept of microfinance about a year and a half ago, and the idea instantly captured my attention. Reading about Muhammad Yunus’ experience starting and building the Grameen Bank in Bangladesh gave me visions of leaving for an exotic faraway land where I would trudge through sweltering jungles to meet with loan groups in secluded villages, handing out funds and beaming as each proud entrepreneur in turn stood and ceremoniously handed me the coins she had toiled for that week, repaying her loan a few pennies at a time, and watching with amazement as they were able to achieve a level of stability previously impossible.
Being stationed in Mombasa, a city of upwards of one million people, my experience has, needless to say, differed quite significantly from that fantasy. Nevertheless, upon landing in Mombasa, it was immediately clear why microfinance is so critical in developing countries, and what the enormous gap between ‘developed economy’ and ‘developing economy’ looks like. In the absence of a Western-style job market, the economy here seems to be comprised, in the vast majority, of small-scale entrepreneurs selling all manners of consumer goods: peanuts, fruit, Safaricom cell phone credit, Coca Cola, beaded jewelry, secondhand clothes, each of them making his or her living on sales of less than a dollar. The prospects of those growing those businesses are bleak without the access to small amounts of capital that microfinance institutions like Faulu provide.
I imagined the typical microfinance office to be a couple of bare, dingy rooms with flickering computer screens and a small vault for the operating funds. Instead, I work in what could be easily mistaken to be a small, professional, American bank. Employees wear corporate polos and a row of tellers take deposits from behind a thick pane of glass. Operations are smooth and systematic, though they make do with a fraction of the technological equipment found in a Western bank. Attending meetings with loan groups, it was immediately clear that the system is well-polished. Faulu Kenya has, after all, been at it for more than 15 years. After my first few days, seeing how well everything is put together, I began wondering what I, as a foreigner and a mere student, could contribute to such a well-oiled operation. I couldn’t even understand much of the loan group meetings, only catching the words in my limited Kiswahili vocabulary and those sentences where the speaker would slip, as Kenyans so often do, into English.
Luckily, that contribution emerged and is now my project for the nine weeks of my internship. My supervisor, the area manager for the coastal offices of Faulu, asked me to look into the possibility of starting a welfare association for clients. Burial expenses are high and often very difficult to come up with, especially on short notice, and informal welfare associations are often frustratingly troublesome and unreliable. After researching similar ‘microinsurance’ programs started by microfinance institutions throughout the developing world, we have begun the mammoth task of surveying as many of the branch’s 15,000 clients as we can to request their input in the creation of such a program. The early signs are extremely positive; nearly 80% of those responding so far have indicated that they would participate when Faulu’s welfare association is launched. Faulu’s tagline is ‘Your Bridge to Success,’ and the new welfare association will help to ensure that those working their way across our bridge are not derailed by a tragedy along the way. Though my time in Mombasa will be done before the program is fully up and running, it is a truly amazing feeling to know my work is laying the foundation for an extension of Faulu’s services that will benefit clients immensely.