A model of microfinance has been operating in the Central Province of Kenya since the early 1990s largely unnoticed by donors. The model involves the mobilization of women into accumulating savings and credit associations by local NGOs that assist in the management of the fund in return for a management fee. The approach was developed in the early 1990s as a result of the withdrawal of donor support to traditional women's group activities and the local NGOs are now entirely self-supporting. The outreach of the services is comparable to the main donorfunded initiatives and evidence suggests that depth of outreach to poorer people may in fact be better. This paper describes the model and explains its apparently successful performance. However, the analysis also suggests that the model has inherent weaknesses, especially in default management, that need to be addressed if its success is to continue.
Most microfinance institutions (MFIs) aim to reach poor people, but rarely manage to serve the extremely poor. This article starts by report-ing on a survey of very poor slum dwellers, examining what they value in MFI programmes, and contrasting these with those of not-so-poor clients. Dramatic differences are not apparent, but both groups placed great emphasis on the security of their savings, and on flexible options for loan term and repayment schedules. A further survey revealed that most MFIs reach the ‘upper poor’ in greater numbers than the very poor.