How mini bank is driving poverty out of a village in Kwale

The Kinondo Community Financial Services Association manager Zainab Ahmed. PHOTO | FADHILI FREDRICK
The Kinondo Community Financial Services Association manager Zainab Ahmed. PHOTO | FADHILI FREDRICK 

Fifteen years ago, Kaya Kinondo, a village in Kwale County was unable to access crucial financial services such as credit as there was no bank anywhere near. This however changed when Kinondo Community Financial Services Association (KFSA), which locals prefer calling Kaya Kinondo Village Bank, was established.

The association, a joint initiative by the World Wide Fund-Kenya (WWFK) and the National Museums of Kenya, was formed to enable the villagers obtain affordable credit and save part of their income.

The association manager Zainab Ahmed says KFSA has significantly improved the lives of many residents, who have obtained loans to expand their businesses and now “have a place to grow their savings”.

Since the association was formed, Mrs Ahmed notes that jobs have been created, people are now earning better income and levels of poverty have decreased considerably among the locals.

The association, formed in 2003, has registered tremendous growth in the volumes of credit disbursements and the number of members as well as the amount of savings.


“We started with few members but now we have at least 2,500 benefiting from this financial inclusion programme,” she notes.

Currently, members have amassed savings of Sh19.7 million, some of which have been disbursed as loans.

Mrs Ahmed says most of the credit advanced to the members goes into the establishment of micro-enterprises such as food kiosks, coconut trade and boda boda. Farmers use the credit to boost production.

One of the beneficiaries, Mwanamkuu Salim, says since she joined the programme in 2006 her life has taken a turn for the better.

“I bought a sewing machine from the first loan of Sh28,000,” she says, adding that she can pay her family bills without any difficulty.

Some members have invested in buying motorbikes and tuk tuks, enhancing their livelihood.

Rajab Ishmael joined the savings programme in 2010 and within a short time he took a loan and bought a motorbike, boosting his water-vending business.

“Through this programme I bought four motorbikes and I recently bought a tuktuk,” he says.

Rajab Bakari was at first reluctant to join the programme because of previous experiences.

“When I joined the bank, I was running away from another micro-finance institution which was exploitative and abusive” says Mr Bakari.

However, he now has an exciting story to tell, with his life having been transformed. He took a loan and bought a motorbike which helped him to earn a good income. He is now looking to expand his business and recently he took another loan of Sh300,00 and bought a Probox, which he uses as a taxi.

“I’m proud of myself and I’m happy to have joined the programme that has changed my life,” he reveals, adding that he is planning to venture into poultry farming.

KFSA strives to provide a wide range of financial services to the poor local community, and its impact is already being felt socio-economically as evidenced by myriad personal stories of transformation.

Mrs Ahmed says Village banking is instrumental in giving poor people in rural and often remote areas access to the much needed financial services.

“Through village banks, members of low-income communities can save or obtain loans to help set up or improve their businesses, invest in long-term life needs such as health or education, or to deal with emergencies,” she concludes.