Microfinance in Africa

Microfinance in Africa

Introduction
Microfinance is one of the means in the fights against poverty that is used in Africa. To find out more about this approach I have send half a year in Kenya working a two mircrofinance institutions. This period provided me with the insight in the tools and means that organisations in this field use. And more importantly in this period I discovered how Kenya's society functions and what the possibilities and limitations of microfinance are.

To share this knowledge I have put together some information on mircofinance. Secondly I would like to introduce a local microfinance organisation with great ambition and the potential to help even more people in the future.

What is microfinance about?
Microfinance is about the provision of financial services to those excluded from the formal financial system. Between two and three billion people still lack access to a broad range of financial products and services on a sustainable basis. Access to financial services like credit, savings and insurance is important for people and businesses to generate income, manage cash flow and protect against risk.

Without access to financial services it is difficult, if not impossible, for many poor and low income households to set up a business, save for the education of their children or insure against medical costs. This makes is difficult to brake out of the viscous circle of poverty. Everything starts with being able to acquire the knowledge and capital to set up a business, being able to save in order to invest, being able to live a healthy live in order to work and care for the children, and finally to save money to send the new generation to school.

Learn more?
UNCDF Microfinance Distance Learning Course (free)

A microfinance organisation: Tumaini Fund for Economic Development International

Tumaini is an local organisation based in one of the ghetto's of Nairobi. It is set up in order to do something about the widespread poverty in Nairobi's slumps and ghetto's. Many social problems, under which AIDS, create poverty amongst many.

Tumaini's vision is â€œto see a society where the children, youth, women and men are healthy and financially capably of providing in their basic needsâ€. The organisations objectives are to:

Create and enhance economic opportunities
Create wealth through empowering people
Getting more of the poor active in doing business.
Help poverty reduction by providing sustainable and high impact financial services to the poor.
To promote small and medium enterprises (SMEâ€™S) at community level.
Mobilise and disburse funds and other resources in order to offer financial services and support our HIV programme
Mobilise funds to build an orphanage under our HIV programme

After five years of community work, the method and objectives of the organisation where reviewed. A strategic plan is set up to do more for the local communities in and outside Nairobi. This new course started of with the introduction of short term loans. Now a group of micro- and small-scale entrepreneurs are able to lend a small amount of money for one week. As little as the money is, they are able to buy bigger stock and invest, helping their business to flourish. This is one of the many small steps that will be taken in the coming years to serve Kenyans in their need financial services.

You can read more on Tumaini in its microfinance profile and strategic plan. For any questions you can contact the webmaster of email to: tumainifund(at sign)hotmail.com.

Links of volunteer organisations

Tumaini I CIVS | SIW |