Kenya: Mavoko and Kitengela
• Population appx. 80,000
• Industry: light engineering, export processing
• Employment: mainly unskilled labour; high unemployment 25%-35%
• 56% live below the poverty line

Background
Mavoko and Kitengela municipalities are located 25 and 30 km southeast of the nation’s capital Nairobi along the Nairobi-Mombasa Highway. Mavoko is home to a population of approximately 65,000 and covers an area of 693 sq. km large parts of which is owned by the government, the rest being owned by private entities. Athi River is the main town within the municipality, and hosts the Municipal Council head office.

Athi River Township grew as an industrial town, initially as a result of the labour force attracted by the now defunct Kenya Meat Commission processing plant and supporting industries. The plant collapsed in the mid 1980’s and as hundreds of workers were laid off, the town faced a labour crisis and an upsurge in poverty. This sparked a rise in the rate of poverty, and with it the growth of slums in the township. The town has since somewhat recovered with the establishment of an Export Processing Zone concentrating on textiles.

The town also boasts over 40 industrial entities comprising factories, go-downs, cement and mineral processing plants, steel and galvanised iron sheet rolling mills. Since the early 90’s several large flower farms have been established in the outskirts of the town, attracting a large workforce of mainly unskilled labour, most of who live within the town. Nevertheless, the town has a high unemployment rate as more jobseekers than can be employed have come to the town. All these have seen the town grow more rapidly than the service providers can cope with. This has speeded the growth of slums and at the same time placed a huge strain on the town’s infrastructure. The rapid growth in population has created a high demand for residential land as the town’s industrial prospects have heightened the competition for land ownership. This has encouraged speculative holdings of land reducing the amount available for residential development.

Next to Athi River town on Kajiado District is Kitengela Municipal town. Kitengela town has grown very fast in the past fifteen years as a result of the same factors that have influenced the growth of Athi River town. Its population is approximately a quarter of that of Athi River town. The two towns have now spread almost to the extent of adjoining each other.

Opportunities for Revolving Fund
The demand for micro finance in Kenya for poverty alleviation, as it is elsewhere in the developing countries, still remains high. This is taking place despite the presence of commercial banks whose terms are too stringent and unfavourable to the poor. To estimate the effectiveness of micro finance and its services demands, one needs to survey all sources of financial services and establish all the services they were requested to provide and were able to provide and those rejected. Studies have however shown that possibilities to increase family incomes through micro savings and credit schemes for the majority of the Kenyans living below the poverty line are high. As Kenya struggles to revive its economy, a community revolving loan facility appears to be a promising strategy for job creation and poverty reduction.

The high demand for micro-finance services in this community and Kenya at large could be due to:
• Low per capita income of about U$$ 300 (2001 WDR). Over 56% of the population live under conditions of absolute poverty.
• High unemployment rate of 25% to 35%. The greatest challenge facing this community and the entire country is creation of employment.
• History of traditional financial system that has tended to exclude women from accessing credit. For instance women are often denied credit by banks reflecting a traditional assumption that men should control the financial decisions of households.
• Loaning from the commercial banks has been unattractive to the poor. This is due to the high interest charged by commercial banks that tend to deter many rural and urban borrowers. Therefore there is need to come up with alternative source of finance for the rural and urban poor.
• Stringent collateral requirements demanded by the most commercial banks are far beyond the ability of the poor as most have few or no suitable assets to offer as security or collateral.
• High threshold from the loaned amounts from the commercial banks, hence making it unattractive to the poor.

Justification for Revolving Fund
Although there are other micro finance institutions that operate in this community, there is however need for a more user-friendly credit facility to improve the lives of the poor. This community is characterized by low-income due to a host of factors that affect the ability of the household to develop its assets and its livelihood. The effects of the poverty in this community are acutely felt by the majority of the households that are either unable to get jobs in the neighbouring Economic Priority Zone (EPZ) factories or whose meagre income is inadequate to meet their needs. Despite the community being in the neighbourhood of the rich EPZ, the poor have limited access to credit and ways of improving their livelihood. This is reflected through the ever-increasing number of jobless people and the mushrooming of slums due to the inability to afford decent housing. It is envisaged that through the revolving loan project, the conditions of the poor in this community will be improved.

Conclusion and way forward
In order to enable the poor households in Mavoko/Kitengela to access credit to improve their conditions, the project will have targeting approaches that will ensure that the conditions of the poor is improved while at the same time ensuring that the services of the revolving fund are sustained. Some of the targeting criteria includes the following:
1. Definition of the criteria and potential clients to be serviced. Rapid assessment helps in assessing incomes, social relations, gender relations, economic activities, consumption patterns, seasonal calendars etc of the area to be serviced.
2. Establishment of who will best utilise the revolving fund and not simply who needs it most is critical. This brings in the element of selection of beneficiaries
3. Clustering the clients in groups. This will help in creating a mechanism that will make the management and follow up easy.
4. Development of clear objectives. This will facilitate targeting and ensure the smooth monitoring and evaluation to assess impact of the programme on targeted groups.
5. Empowering women through financial assistance is likely to result to improvement of family incomes hence need to give them some financial independence.
6. The church in Africa has proven to be an effective institution for mobilising and facilitating development and change. By working with trusted local partners such as the local church councils, Mutunga Partnership will create links with a network of client communities, and will establish a pattern of working directly with them thus targeting the scarce resources in their communities.
7. Training will be provided to the loan clients in order to equip them with knowledge and skills for running their business enterprises effectively and efficiently.
8. Predisposing factors to poverty in the area such as HIV/AIDS will be addressed in order to mitigate against the impact of the scourge. Relevant programmes will be carried out through the partner in the area of advocacy, education and care for PLWAs (People Living With Aids).

Kenya: Tala and Kangundo
Population appx. 190,000
• Industry: small-scale farming and livestock keeping; small scale business.
• Employment: mainly agriculture and small scale business, high unemployment 25%-35%
• 56% live below the poverty line

Tala and Kangundo towns are located in Matungulu and Kangundo Divisions of Machakos District, Eastern Province of Kenya. They are approximately fifty and seventy kilometres respectively north-east of Nairobi. The two towns are fairly active with business entrepreneurship ranging from vegetable and second-hand clothes to electronic goods. They serve the two divisions of Matungulu and Kangundo Divisions with a population of 190,969 people comprising of 38,149 households. As a result of the population pressure, coupled with the reduced land fertility, the size of land for each individual household has drastically reduced. Most people now live in small parcels of land while some have migrated to settle elsewhere in the country or to seek employment in other towns.

Most of the people living in this area are predominantly Kambas whose main occupation is small-scale farming and livestock keeping. There area also people from other areas who are engaged in small scale business in these trading centres. They include the Kikuyu, Luos, Luhya, Merus, and Somalis. The market days are on Tuesdays and Fridays for Tala town and Sundays for Kangundo town. People who come to trade in these towns on market days come mainly from Nairobi, Machakos, Thika and other parts of the adjacent divisions. They sell their goods such as livestock products, farm produce, clothes, electronic goods, livestock etc. and in turn buy goods brought from them.

Injection of a credit facility is expected to contribute greatly in raising the income for the targeted households and hence the improvement of the quality of life of the disadvantaged in this community.

The involvement of the church in responding to the physical and social needs in additional to the spiritual needs is a step towards the right direction in activating the church to holistic approach to minister to the whole person. Some of the church denominations that could provide ground logistical support and to provide a base for these projects are the Kangundo Redeemed Gospel Church (Kangundo Town) and Tala Deliverance Church (Tala Town). Kangundo Redeemed Gospel Church has been in existence since 1979 and has been active in evangelisation throughout the country. Both churches have also been seeking ways of alleviating poverty among the poor and disadvantaged in these areas. This has however not been fully accomplished due to limited resources. As a result of this, poverty has continued to persist among the people, the evidence of which has been famine, unemployment, ill health and inadequate education facilities.
Some of the issues to be covered in the community sensitisation and mobilisation will include the promotion of the scheme, group formation, mobilisation of local resources, capacity building in entrepreneurship and policy on lending, loan disbursement and recovery.

Beneficiaries are currently being formed into solidarity groups. The project will finance groups and individuals for the sole purpose of investing in small enterprises. Loans will be paid back at interest rates that will be reasonable to meet the administrative costs of servicing them and for expansion to cover other groups. Clients will be given the necessary training to create better understanding of the micro credit scheme as a pre-condition for loans disbursement.

As there are already other micro credit schemes operating in this community, there will be need to develop a better and an attractive micro credit scheme that will be suitable for many people especially the poor and the disadvantaged.