Land Loans: Targeting Extreme Poverty
It’s unusually hot and rainy for January. The maize is turning golden and farmers have begun to harvest. With the granary construction just about completed, the Nuru team is getting mobilized for a busy month of buying maize and receiving loan repayment, followed by the issue of next season’s inputs. Payment for maize will be deposited into the Farmer Savings Program, which not only is safer than disbursing cash but also encourages members to save.
Because the CED Program is savings-based, it can unintentionally exclude the extreme poor who don’t have money for basic needs, much less disposable income. That’s why the program was launched a season after the Agriculture program, in the hopes that improved maize yields would now allow families to save and plan for the extra income. Farmer Savings Shares provide a low-cost alternative to the costly and unclear fee structure of commercial banks. Through the JDF, we are now targeting the lack of options for credit and access to capital that is so important for economic growth.
Nuru Savings Clubs match Nuru funds to member savings to provide business loans, but are biased toward members who are able to save weekly, as opposed to members who rely solely on seasonal agricultural income. The launch of the Jamii Development Fund community savings and loan program provides important access to credit that can be repaid at harvest while providing an incentive to break dependence on agricultural input loans. However, it’s a lot easier to save enough money to break dependence on loans if you actually own the land you’re farming. So this month, we’re working with the Agriculture program to address a vulnerable population: the landless.
Traditional inheritance practices in Kuria divide the family’s land amongst the sons. The plots get smaller and smaller throughout the generations, and women don’t traditionally own land. But land directly impacts survival. In the rural communities of Kuria, everyone farms. Even those with another source of income, like a store or taxi service, farm. So those who do not own land are often the most extreme cases of poverty.
The land lease loan addresses a community need that affects many groups: the landless poor, women who face traditional barriers to land ownership, and Nuru farmers seeking growth through additional agricultural income. The two members we selected to pilot the loan are Susan Boke, from the Gukipimo community, and Janet Gichere, from Nyangiti. Both are widows, putting their children through school with the income from their small farms. The yield is barely enough to cover household expenses. The land lease loan allows them 2 acres more each; the harvest from this land should increase their income by at least 60% even after repayment and interest. Janet is a slim, active woman with a big, confident grin. She holds her own as the only woman field officer in the Agriculture program. Medical bills after the devastating loss of her youngest child made it difficult for her to cover her family’s expenses last season. When asked about her plans for additional income, she says she will meet her family’s needs, pay for her children’s schooling, and save. Susan would like to save as well, with the goal of buying additional acres of farmland to support her 6 children. After piloting the loan this season, we hope to offer it to the community in the short rain season.