The last few weeks have been busy for the Community Economic Development (CED) program, or as Jake calls it, the artist formerly known as Small Business Development. The name change was an effort to better reflect the program’s goals, not all of which are covered by small business development alone. During my time in Kuria I will be focusing on these main goals for CED:
- To train Nuru members to save, budget, and plan. These skills will eventually be used to access and manage credit.
- To provide skills training and small business development programs.
- To start a community development fund which will be the basis for a village savings and loan program, as well as ensure all Nuru program operations are able to sustain themselves.
Where we are now:
Aerie kicked off our financial programs in April with a savings club. Nuru groups committed to save weekly and receive financial planning training. After 12 weeks of saving, members are eligible to apply for loans from the group’s savings. The entire group must approve the loan, and interest is paid back to their savings total. We recently passed the 12-week mark and 15 loans have been disbursed to 5 groups. The first and second repayments have been made without a problem.
In his last post, Aerie mentioned a concept that has influenced the program a lot – not everybody can be an entrepreneur, but everybody can save. The Savings Club not only facilitates saving and planning, it also eases members into the use of credit. While these initial loans are made from the group’s own savings (encouraging responsible repayment and eliminating our program risk), perfect savings contributions and successful repayment of the internal loans will qualify groups to apply for higher loan amounts matched by Nuru funds.
This focus on saving and planning is used in another important CED initiative that began this week, the Farmer Savings Program. The Savings Club catered to Nuru members who were able to contribute weekly savings. However, many Nuru members are full-time farmers that do not earn income on a weekly or even monthly basis, and thus haven’t been able to participate. Since commercial banks charge a fee to open low-balance savings accounts, farmers don’t have easy access to basic financial services. By pooling farmers’ income and taking care of the administration, Nuru allows farmers to save for free and earn interest. One member even talked our office manager into taking his Ksh.3,000 savings deposit a month before the program applications had been written! He didn’t want to be tempted to spend the money before the program began.
The Farmer Savings Program will also offer free training services in financial planning and budgeting. This is a key part of Nuru’s holistic model. By planning for the next planting season, farmers will be able to save their money and buy the next season’s inputs instead of taking a Nuru agricultural loan, preventing dependence and allowing farmers to put their entire harvest profits towards their families, re-investment, and further saving. Due to timing, we’re starting Farmer Savings a few weeks after harvest, but next season I hope to coordinate with the Agriculture program to set up automatic deposit at harvest to maximize savings.
Where we’re headed:
Along with ramping up farmer savings enrollment, I will focus on building Team CED. As a newer program, CED has been busy setting up a baseline and defining program strategy. Numerous field officers have been identified, so in the following weeks I’ll be training and organizing the team. They’re hard working and dedicated, and I am excited to work with them. In my next updates I’ll talk about names and roles.