Posts tagged ‘development’

Mitumba 101: The Second Hand Clothing Trade in Kenya

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Toi Market. Nairobi’s largest second retail hub. (Photo Credit: Katrina Shakarian)

The Blue Sweater

The founder of non-profit venture capital fund, Jacqueline Novogratz, is the author of “The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World.”  In the book, she describes a blue sweater, donning “zebras in the foreground and Mt. Kilimanjaro right across the chest,” that she wore often as a child.  Like many of our own childhood artifacts, the sweater was donated to good will once she started high school.

That exact moment is where the story goes global…

“Fast forward 10 years, about 5000 miles.  I had left my career on Wall Street and was working in Kigali, Rwanda with a small group of women to start the countries first micro-finance bank to make small loans to poor women.  When I was jogging through the streets, and low and behold 10 yards in front of me I see a little boy, pip squeak, knobby knees, wearing my sweater.  So, I run up to the child, grab him by the color, turn it over and there is my name,” said Novogratz.

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Novagratz’s sweater is one article of clothing among millions that are circulating the globe as part of the second hand clothing trade (SHCT).  Although the SHCT accounts for approximately 0.5% of global trade in clothing, more than 30% of those imports went to Sub-Saharan Africa (SSA) as early as 2005Figures provided by an Oxfam report indicate that used garments, initially collected and sold by western charities, account for nearly 50% of the clothing sector in SSA.

The SHCT is a billion dollar industry that spans the globe.  According to a CNN report, “whilst exact continent-wide figures are hard to come by, global used clothing exports from OECD countries stood at $1.9 billion in 2009, according to 2011 U.N. Comtrade data.”   An estimate in the same article approximates import activity to be worth $3 billion, and the subsequent retail transactions to be worth two-times that amount.

Mitumba 101

In Kenya the second hand clothing trade is known as mitumba.

Used clothing was first imported as duty free charity in response to regional conflicts during the 70s and 80s.   The trade evolved into a commercialized business sector in the early 90s, when market liberalization policies were introduced into the Kenyan economy.  Those policies allowed for the importation of goods, like mass shipments of used clothing, at reduced costs.

Indigenous textile industries across many African economies could not compete with the lower cost and higher quality of used clothing from abroad.   In Kenya specifically, the resulting competition coupled with other factors like the collapse of the Kenyan cotton board, a drought from 1995-1997, lack of locally produced synthetic material and newly arriving cheap Asian imports, led to the closing of Kisumu Cotton Mills, Allied Industries Limited and Heritage Woolen Mills.

However, before you mourn the loss of local textile production, you should know that this is not entirely a sob story.   From the ashes of one industry, another one has emerged quite triumphantly.  Mitumba is a bustling business sector in Kenya.  It has created thousands of jobs where the government and private sector have failed to do so.  Furthermore, the state cashes in on import revenues and so do local city-municipal councils that require all vendors to purchase trading licenses regularly.

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Retail clothing vendor in Toi market. (Photo Credit: Katrina Shakarian)

Mitumba is popular across the entire spectrum of Kenyan society.  The poor could not afford to clothe themselves otherwise, while middle class and affluent Kenyans turn to Mitumba for designer labels and high quality, unique clothing intended for western markets.

Mitumba Supply Chain in Kenya

  • Exporters/Importer: The second hand clothing merchants sort the clothing by condition and category; good/poor quality, women’s/men’s/children’s, shirts/pants, etc. Then, they’re bundled in plastic packaging called bales and shipped to the major East African port city of Mombasa in large containers.   The bales are purchased by the ton.  When they arrive in Kenya, they are stored in warehouses, mostly around the port of entry.
  • Wholesalers: Major wholesalers purchase bales in Mombasa and transport them by truck to Gikomba market in Nairobi, ground zero for the wholesale mitumba trade in Kenya.  Next, medium wholesalers purchase the bales and sell the clothing to retail vendors who travel to Gikomba from all over the country to purchase stock for their businesses.
  •  Retailers: Toi market, an offshoot of Kibera slums, is the largest retail market for used items in Nairobi.  Other vendors fan out to cities and towns across the country.

On the Ground in Gikomba Market

Hop on matatu #7 behind the National Archives in town for the short ride to Gikomba Market, Kenya’s hub for wholesale SHC sales.  This is a thrift shop on steroids.  Gikomba is a labyrinth of rickety wooden stalls, adorned with rows of garments hung like ornaments on a Christmas tree.  Vendors, perched above colorful mounds of clothing, call out to customers, shouting prices from their stalls.  Bales of clothing are hauled through its narrow, muddy corridors on sturdy backs and rickshaws, as customers bob and weave through the chaos looking for quality clothing at the lowest price.

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Bales of clothing waiting to be sold at Gikomba market. (Photo Credit: Katrina Shakarian)

The sound of “camera, camera” fills the air.  Clothing, both retail and wholesale, are sold in rounds by grade.   Each round is called a camera, first camera, second camera and finally, the third.  Once the bales are opened and sorted, the best quality clothes will be the first to go.  Vendors often build relationships with each other in order to get first dibs on “first camera” clothing.

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Ladies T-Shirt from Australia. (Photo Credit: Katrina Shakarian)

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Used clothing bale from Canada. (Photo Credit: Katrina Shakarian)

Francis, from the Kingara section of Nairobi, supervises a store that sells bales of clothing in the market.  Drivers for the business go back and forth to Mombasa at least twice a week, bringing  back about 70 bales of clothing with them each time.  The drive from Nairobi to Mombasa is about 8 hours one way.  According to Francis, a bale of 1st grade clothing can range anywhere from KHS 9000 (about $100) to KHS 14000 (about $200).

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Francis is seated on a bale to the left. He supervises this wholesale bale business in Gikomba market. (Photo Credit: Katrina Shakarian)

Thomas Wahome, 24, and Samuel Mwangi, 28, have both worked in Gikomba market for 3 years.  They rent a stall for KHS 1500 (about $20) a month to sell men’s and women’s jeans.  At their stall, the cheapest pair costs 100 shillings (about $1.50).

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Thomas Wahome and Samuel Mwangi at their stall in Gikomba market. (Photo Credit: Katrina Shakarian)

Paula Bosire, an accounting student at Strathmore University, likes to mix and match her wardrobe.  Some of her clothes are brand new from local chain stores and others are second hand.  She is a frequent visitor to Gikomba, where she goes to find prices even cheaper than Toi’s.   “I shop at Woolworth’s and Mr. Price for statement pieces and come to Gikomba for really good deals and things that are practically new.  Sometimes the difference isn’t much,” she said.  On this day, Paula left Gikomba with stylish scarves and a pair of slacks and jeans that cost KHS 40 (about $0.50) each.

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Paula Bosire shopping for scarves in Gikomba market. (Photo Credit: Katrina Shakarian)

Geoffrey Messo, 24, is a mitumba retailer at Umoja, an estate in Nairobi.  He has been in business for 8 months and visits Gikomba twice a week to purchase new stock.  He retains customers by building relationships with them, getting to know their styles and taking personal requests for items.   According to Geoffrey, starting off as a mitumba retailer is not difficult because it requires very little capital upfront.  However, like any business mitumba is not devoid of challenges.  Sometimes Geoffrey is stuck with clothing that doesn’t sell.

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Geoffrey Messo in Gikomba. (Photo Credit: Katrina Shakarian)

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(Photo Credit: Katrina Shakarian)

Gikomba market generates tons of spinoff employment.  It’s like a city within a city.  Security guards are hired to protect stalls and stock.  There are tailors on site to repair clothing and stalls set up exclusively for ironing.  Shoe cleaners wait at the exit of the market with brushes, soap and water to wash off the mud accumulated from a busy day of shopping, and food vendors are on site to fuel the spending.

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(Photo Credit: Katrina Shakarian)

Naima, is known as ‘mathe’ in the market which means mother in shang, Kenyan slang.  Originally from the coast province, she is the owner of ‘Real Madrid’ restaurant, located at the center of Gikomba’s hustle and bustle.   She’s run her business in the market for 8 years.  In addition to feeding hungry shoppers with typical Kenyan dishes like chapati, samosas and greengrams (lentils), she caters for parties and offices in the Westlands and Hurlingham sections of Nairobi.   “People come from very far to pick clothes for their businesses.  This is a meeting place for them.  They sell, exchange, I let them do whatever they want [here].  They come in the morning, leave their things, I keep them safe while they go to buy.  Then, they come to eat, talk with friends and return home, ”said Naima.

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Naima’s business is more than just a restaurant. It’s a social gathering space for those buying and selling in the market. On a typical day, her establishment is filled with the sound of laughter and friendly banter. (Photo Credit: Katrina Shakarian)

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Since there is no running water, Naima provides plastic gloves for finger food. (Photo Credit: Katrina Shakarian)

A portrait of Gikomba market would not be complete without mentioning that it is also Nairobi’s wholesale fish market.  Hotels, restaurants, businesses and even individual shoppers flock here to purchase fresh and smoked fish from Lakes Victoria and Turkana.

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(Photo Credit: Katrina Shakarian)

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(Photo Credit: Katrina Shakarian)

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Helen is standing to the far left, in front of her fish vending business in Gikomba market. (Photo Credit: Katrina Shakarian)

Geoffrey Messo, the clothing vendor who I met shopping for stock, introduced me to his mother Helen.  She has been selling fish in Gikomba for 10 years.  She sells fresh fish from Lake Victoria.  She receives shipments of fish everyday.  Along with most vendors in the market, she rents a space in communal refrigerators to store her supply.  Her customers, many of whom are restaurant owners, come straight to her in Gikomba.  She also makes home deliveries.

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Fried fish, stew, sukuma wiki and ugali. (Photo Credit: Katrina Shakarian)

If you’re not in the mood for samosas or greengrams at Naima’s ‘Real Madrid,’ stop by the fish section of the market for freshly fried Nile perch, a side of sukuma wiki, kale, and the Kenyan staple ugali, corn flower cooked with water to a dough-like consistency.

On the Ground in Toi Market

Toi market is located at the outskirts of Kibera slums in Nairobi.   According to Citizen TV Kenya, ”the market, which started in 1992 as a food center, where people could stop for a bite to eat, has become a vast emporium of second hand shoes, shirts, bags, pants and dresses. “  Toi market is the primary retail-shopping destination for the average Nairobean.   It’s less hectic, more spacious and secure than Gikomba market, which is located near the city center.

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(Photo Credit: Katrina Shakarian)

Boniface started working in Toi in 2005.  He has lived in the adjacent Kibera slums for 22 years.  He was previously employed in the ‘jua kali’ sector making furniture, but left to go into business for himself.  “  I wanted to be self-employed, to rely on myself and my own business, to live my own life, personally.  The business is cheap to start,” said Boniface.  Unlike most vendors in Toi who rent, Boniface owns his stall.  He purchased it for KHS 25,000 (about $300).

Jackline Arunga, 18, is a newbie in Toi.  She has only worked in the market for 1 year, selling children’s clothes exclusively.  She rents her stall along the roadside for KHS 1500 ($20) a month.  Once a month, she travels to Gikomba market to restock her supply of mitumba.  Jackline’s long term goal is saving money to enroll in university.

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Jackline Arunga at her children’s clothing stall in Toi market. (Photo Credit: Katrina Shakarian)

Brisbane John Ndavi owns a stall in Toi market with his wife.  They have worked here for a decade.  Like for many Kenyans, it is difficult to survive on one income alone.  So, Brisbane has more than one job.  He is a full time security guard at an international embassy in Nairobi.   Brisbane and his wife sell mitumba from a great location on the roadside.   The price of owning or renting along paths, well worn from foot traffic, is double that of stalls off the roadside, deeper inside the market.  Brisbane sited land ownership discrepancies as one challenge to feeling secure in this line of work.  Neighboring Kibera and Toi market are both informal settlements, and who exactly owns the land has been a huge point of contention for decades.   There are constantly rumors about developers seeking to gain ownership and wipe out the market.  According to Brisbane, many vendors work with the fear that one-day, they’ll show up to work and find their structures ransacked and torn down.

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Brisbane John Ndavi and his wife at their stall in Toi market. (Photo Credit: Katrina Shakarian)

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(Photo Credit: Katrina Shakarian)

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Second hand shoes are cleaned, polished and presented like new. (Photo Credit: Katrina Shakarian)

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(Photo Credit: Katrina Shakarian)

Toi market is not just a hub for clothing.  It is a central location for all kinds of used items.  On any given day, it’s common to see customers, both affluent and poor, Kenyan and expatriate, combing through books, toys, electronics, utensils, accessories, furniture and other items.  According to The Standard, Verah Aboga is one of the businesspersons who sells second-hand kitchenware.   Aboga, who operates from Kitengela on the outskirts of Nairobi, sells the items on order to her customers in the city.  Aboga noted that second-hand utensils are becoming popular because the market has been infiltrated by low-quality items. “Most of the sufurias (cooking pots) sold in the Kenyan market are very light and are not even made of stainless steel. This is what is making people switch to second-hand utensils, especially those who mind about quality,” she said.

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Toi market houses all kind of used items, not just clothing. (Photo Credit: Katrina Shakarian)

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Toi market houses all kind of used items, not just clothing. (Photo Credit: Katrina Shakarian)

Challenges to Mitumba

Market liberalization, coupled with the low purchasing power of the vast majority of Kenyans, has made the country fertile ground for the SHCT.  It’s wildly popular across the entire societal spectrum.  Nonetheless, there are several factors that could threaten the industry’s future in Kenya.

1) Cheap textiles from Asia are flooding the market.  Although the competition from this onslaught is real, many Kenyans remain loyal to mitumba for its higher quality.

 
2) In 2012, the government raised import duties on SHC shipments.  According to an article originally published in the Daily Nation, “While a container of mitumba used to attract duty of between Sh900,000 and Sh1.1 million before the new taxes were implemented early this year, the new rate is now Sh1.8 million, an increase of more than Sh800,000, they said.”

3) Local textile firms, that hope to stage a comeback, are lobbying the government to impose a levy on SHC shipments.  They’d like the additional revenue to go towards a fund subsidizing cotton cultivation.

Although government policies and the ever-shifting tide of international trade may ultimately have it in for mitumba, the view from the ground doesn’t hint at a demise any time soon.  At an average of 90% off western retail prices, how can you go wrong?  Shop on Kenya!

17 July 2013 at 06:32 7 comments

Nairobi – Where Development, Social Enterprise and Kiva come to Party

By Patrick Seeton | KF18 | Kenya

I’ve been in Nairobi for just over two weeks (and more importantly three weekends!) and what has struck me most, beyond the friendliness of the people and the ever-present dust and diesel fumes, is the social scene and its social enterprise scenesters.

Kenya has undergone a transformation in recent years – the removal of long time president Daniel Moi in 2002 and subsequent democratic election of current president Mwai Kibaki was the start in a chain of events that has led to a resurgence in Kenya’s standing in the region.

Kenyan President Mwai Kibaki’s inauguration, Uhuru Park, Nairobi, 2002 (Looks like it was a pretty good party)

Recent Fellows’ blogs about Kenyans’ sense of hope (see Muskan’s “Trough” Blog) and the region’s innate entrepreneurial spirit (see Julie’s “How to Make it” Blog) demonstrate how these attributes, combined with political freedom and technological advances, have made Nairobi an emergent hub for development agencies and fledgling social enterprises alike.

These development professionals, social entrepreneurs and Kiva are all here Nairobi trying to figure out what the region’s future could look like…

(more…)

12 July 2012 at 07:00 6 comments

A Mexican Tale of Women and Sheep

Emmanuel M. von Arx | KF 16+17 | Mexico

Who would have thought that my second Kiva Fellowship would teach me just as much about microfinance as about the rearing of sheep? Seriously, ask me anything you want: How do you best hold a lamb? How do you wrestle with a grown-up mutton? How do you treat sheep for worms? Where and how often do you set them a vaccine? How do you determine a sheep’s age? Why does a sheep bite normally neither hurt nor bleed? For what reason does a sheep have four stomach compartments? And how do you compel a lamb’s reluctant mother to accept her kid after birth? I owe this knowledge to UNAM-educated veterinarian Linda Velázquez Rosas, who made a sheep-expert not just out of me, but also out of 200 amateur sheep-owners in and around the little town of San Felipe del Progreso, two hours west of Mexico City. This training was made possible by Vision Fund Mexico (also known as Fundación Realidad or FRAC), a Kiva field partner that excels both at financial and non-financial services (in a previous blog post I documented an artisan fair in Mexico City that was co-organized by FRAC).

Continue Reading 6 July 2012 at 08:00 6 comments

Beyond Financial Services: Mexico’s Greatest Artisan Fair

Emmanuel M. von Arx | KF 16+17 | Mexico

Shortly after arriving at my first Mexican microfinance organization, FRAC (or Fundación Realidad, soon to be called Vision Fund Mexico), I had the joyful task of presenting in the name of Kiva two Social Performance Badges to its enthusiastic staff: one for Vision Fund Mexico’s strong and persistent focus on poor people, and one for the organization’s success in empowering families and communities. The description of the Family and Community Empowerment Badge on Kiva’s homepage immediately piqued my interest: it states that recipients of this badge “implement innovative business practices and offer services in addition to their financial products to meet the needs of the people they serve.” Innovative business practices and additional services beyond financial products? At FRAC? I began to ask members of FRAC’s staff and was soon pointed to some great examples of non-financial services that Vision Fund Mexico has provided in past months and year: they include support in product marketing and distribution given to beekeepers and artisan villages, over 380 free financial literary workshops for well over 4,000 borrowers, and free expert veterinarian training and medical services provided to hundreds of borrowers who are raising cows and sheep in their backyard. While I hope that some of these topics will be addressed by future guest blog posts of FRAC staff members (continuing the series that was started by Rosa’s gorgeous post on her recent field visit), I will report here on FRAC’s selfless contribution to Mexico’s largest artisan fair, the Expo FONAES. In many ways, this is just another example to David Gorgani’s great piece on the wide range of non-financial services that Kiva field partner organizations provide.

Continue Reading 22 June 2012 at 08:00 4 comments

Recycling for Life and Family in the Mexican Countryside

Emmanuel M. von Arx | KF 16+17 | Mexico

I have a confession to make: I love to browse Kiva borrower profiles – even occasionally without any actual intention to make a loan. I believe that reading the stories of borrowers from all over the world and knowing their dreams tells me more about a country and the mentality of its people than even the best of all travel guidebooks. And knowing some of the challenges they are facing in their lives and how they are surmounting them, being aware of the long hours they work every day and their dedication to their families – all this inspires me deeply and on a very personal level: if people can thrive under difficult circumstances thanks to incredibly hard work and a dream, then I should and will be able to do something meaningful and lasting with my own life as well! My Kiva lender profile reads: “I loan because… Kiva borrowers never cease to inspire me with their courage, talent, and dedication!”

That strong sense of inspiration that speaks to me out of every Kiva borrower’s history has been multiplied during my time in the field as a Kiva Fellow in the course of many personal meetings with borrowers. I have met literally dozens of borrowers who have left an indelible mark in my heart and mind. But recently I have met a borrower who is so extraordinary and unusual that even I – one of the more seasoned Kiva Fellows – was blown away. Her name is Ma de los Angeles and this blog entry tells the story of her work and her success.

Continue Reading 1 June 2012 at 08:00 6 comments

The Heart of Kiva – A Guest Blog from Mexico

Emmanuel M. von Arx | KF 16+17 | Mexico

Kiva is all about stories – what draws us all in and inspires us to lend are the stories of courageous micro-entrepreneurs that speak of hard-ship and success, challenges and dreams, love and dedication. But Kiva is not just about borrowers and their stories. It is also about the people behind the scene on the ground – the staff of the close to 150 field partners of Kiva – who screen loan applicants, grant, administrate, and look after Kiva loans, and make sure that Kiva borrowers are treated respectfully and fairly. Their stories are almost never told. Yet, the local staff of Kiva´s Field Partners are those people who make the magic happen – they are the ones who make Kiva possible. If Kiva Fellows are called the “eyes and ears in the field”, I propose local MFI staff be called “the brain and heart of Kiva.” MFI staff has insights on the conditions on the ground, the local mentalities, and the practical aspects of microfinance that can rival (and – I have no doubt – normally exceed) those of Kiva staff and Fellows. Yet, their perspective is seldom heard and their stories are rarely told.

Just how much local field partner staff have to tell and to share with the world I learned during the brief three week period during which I had the pleasure to be the Kiva Fellow for FRAC or Fundación Realidad (soon to be known as Vision Fund Mexico) in Mexico City. FRAC, has over 200 employees – they encompass 200 breathtaking stories and lives from all over Mexico, coming together in FRAC’s vision of wanting to provide financial and non-financial services to those families who do not have access to formal banking services in order to improve their quality of life.

During my work in FRAC’s Mexico City Headquarter, the MFI’s staff turned out to be an endless source of inspiration for me. There was not one person I talked to whose story and motives wouldn’t be worth sharing. Within a few brief hours I felt not just surrounded by close friends, but soul-mates – I discovered that everybody around me was at least as passionate and enthusiastic about FRAC’s and Kiva’s work and the impact of micro-finance as I am.

As soon as I told FRAC’s staff about the Kiva Fellows Blog, I was bombarded with requests of staff members to publish their thoughts and their experiences on it. Many have a particular pet project they feel most passionate about; others have made an experience on the job they are keen to share. Thus grew the idea of creating a little guest blog within the Kiva Fellow Blog. I offered to all staff to publish their thoughts and words on the Fellows’ blog as a way to make readers aware that Kiva doesn’t just connect lenders with borrowers, but that it connects lenders with local staff with borrowers with friends with staff with borrowers with lenders with… stop! Let’s just say: Kiva connects people through lending!

Rosa Gonzalez is the first staff member of FRAC who agreed to share her experience. She was hired by FRAC as their English-Spanish translator a few days after I joined the organization as a Kiva Fellow. Rosa translates both borrower profiles and journals for FRAC borrowers before they are being published or sent to lenders. But let me introduce Rosa in her own words – you will immediately see that they are pure poetry.

Continue Reading 24 April 2012 at 08:58 5 comments

An Ordinary Borrower Visit: The Reality of Microfinance in Honduras

Santiago Cortes | KF 17 | Honduras

I’ve just arrived in Tegucigalpa after my first trip to one of  Kiva field partner Prisma‘s branches. I left Prisma’s headquarters on Wednesday on the back of a pick-up and drove to Danli, home to the nearest branch. My main goal with this visit was to test some policies I want to implement across Prisma. I hope to change all the processes related with Kiva, so I used this branch as a sort of “pilot branch.”

I didn’t know what to expect, Honduras being one of the most dangerous countries in the world. After a couple of hours heading south with an entire family in the back of a pick-up Toyota, I arrived in Danli in southern Honduras late at night.

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The pick-up that took me from Tegucigalpa to Danli. (more…)

14 February 2012 at 19:05 18 comments

Producto Creer: How for a Bank Doing the Right Thing Can Pay Off

By Emmanuel M. von Arx, KF16, Guayaquil (Ecuador)

My host and Kiva´s partner organization Banco D-MIRO provides over ten different types of microloans to borrowers in and around Guayaquil: among them loans to finance housing improvements, school expenses, medication, and loans awarded specifically to employees, young clients with a business idea but no experience, and – as Ecuador´s only microfinance institution – discount loans for HIV-positive micro-entrepreneurs. Yet, one borrower group beats all other borrowers in their dedication and commitment to paying back their loans on time: the well over 400 disabled borrowers of Banco D-MIRO, whose payment discipline has turned “their” loan – “Producto Creer” (“Product Believe”) – into the most successful and inspirational product of D-MIRO´s extensive spectrum. The delinquency rate of Producto Creer is by far lower than that of any other major micro-loan type of Banco D-MIRO, which means that borrowers of Producto Creer are better at paying back their monthly rates than any other client group! In these times of economic and social turmoil, Banco D-MIRO´s Producto Creer may be a much needed reminder that it may pay off for banks to do the morally right thing.

Continue Reading 20 December 2011 at 04:00 1 comment

A Typical Day in the Life of a Kiva Fellow: Loan Officer Training (Video Blog Post)

By Emmanuel M. von Arx, KF 16, Guayaquil (Ecuador)

Video posts on a “typical day” in the life of a Kiva Fellow are a time-honored tradition on the Fellows Blog. Without any more words, here is my contribution to the video series of documenting a typical day in the life of a Kiva fellow. Like all previous contributors to the series, I am keenly aware that there is no “typical day” for Kiva Fellows. But taken together, the growing number of “typical day”-videos may at least convey something of the diversity, unpredictability, spontaneity, and joy that a typical untypical day of a Kiva Fellowship entails. Enjoy!

Continue Reading 6 December 2011 at 04:00 3 comments

Visiting an HIV-Clinic in Guayaquil (Part II)

By Emmanuel M. von Arx, KF16, Guayaquil (Ecuador)

One of the great joys and privileges of being a Kiva Fellow is to go along with loan officers when they are meeting Kiva borrowers and new clients. One of my most memorable outings was a visit of an HIV-clinic in a public hospital in Ecuador´s largest city Guayaquil. In the first part of this blog post I recounted how I drove with Nahin Alvarado from Banco D-MIRO´s headquarters on Guayaquil´s Isla Trinitaria to the HIV-clinic at Hospital Abel Gilbert. Nahin is the bank´s loan officer specializing in HIV-positive and/or disabled clients who have the right to receive a discount micro-loan. And Banco D-MIRO is the only micro-institution in all Ecuador to provide financial products especially for these two long-excluded client groups.

Nahin is talking to a patient outside of Guayaquil´s HIV clinic

While Nahin is presenting the bank´s special loan products to the patients in the HIV- clinic´s crowded waiting room, Franklin walks towards me. A strong man in his forties, Franklin is the leader and community organizer of FUSAD (Frente Unido por la Salud y los Derechos – in English: United Front for Health and Rights), a self-help and support group for HIV-positive people, based at the hospital and well known for the professional education courses they provide to their members.

Continue Reading 15 November 2011 at 12:00 4 comments

Visiting an HIV-Clinic in Guayaquil (Part I)

By Emmanuel M. von Arx, KF16, Ecuador

“Don’t be scared to shake the hand of a client with HIV or to drink out of his glass. You cannot get infected that way.” This was the message that Nahin Alvarado repeated over and over during a training session in September with a group of twelve new and somewhat incredulous loan officers of Banco D-MIRO, when I first met him. A loan officer himself, Nahin has been with Banco D-MIRO for over two years, focusing on two very special client groups who – not just in Ecuador – have long suffered from discrimination and lack of access to financial services: micro-entrepreneurs who are HIV-positive or disabled. The moment I heard Nahin so forcefully speak up on behalf of HIV-positive clients, I knew that I wanted to spend a day with him in the field.

Continue Reading 2 November 2011 at 08:00 3 comments

What´s Easier Than Getting Robbed in Guayaquil?

By Emmanuel M. von Arx, KF 16, Ecuador

As much a therapy session as a blog entry, this is the narrative of a recent robbery incident in Guayaquil: It happened two hours ago and my co-workers and I can still feel the shock in our bones. This day had begun like a normal day: At 7.30am Rubi Chaca – the Kiva Coordinator of Banco D-MIRO -, her 16-year old intern Joel Kenny Matias, and I had met outside of the bank´s headquarters, where we were picked up by Roberto, the official driver of the bank. He drove us to the branch office of Guasmo where we gave a training session to the local loan officers, reminding them about Kiva and explaining to them why it is so important that they keep finding micro-entrepreneurs who agree to be listed with their name and photo on Kiva´s website.

Continue Reading 18 October 2011 at 16:00 9 comments

Economies of scaling down

Nearly half the world’s population lives on less than $2.50 per day. That’s a lot of people, and finance isn’t the only sector that’s gone micro to reach this huge market.
- By David McNeill, KF14 Sierra Leone

Continue Reading 26 April 2011 at 02:00 4 comments

Prescriptions are not just for medicine

By Zerrin Cetin, KF12 Ghana

Obruni (Often yelled, “Ooobrruuuniii”). A word that meant nothing to me just three short months ago. Now, it is a word that induces feelings of happiness, anger, and indifference all at the same time. In Ghana, a foreigner is called obruni. Really, it is more of a greeting than anything. Admittedly, it took me a while to get used to being called obruni.

While my fellowship is providing me with a fantastic opportunity to learn about microfinance, this obruni example illustrates a part of my fellowship that I equally cherish – Living in a country very different than my own. This is pushing me to be open-minded despite how strange circumstances might seem at times. This openness, in turn, is pushing me to think about things that I had never thought about before. I think a recent experience illustrates this nicely. A very interesting question was posed to me by a Ghanaian. “Do you think my country will ever reach your country?”

Continue Reading 25 October 2010 at 04:00 9 comments

A Weekend Getaway From Managua

By Gabriel Castillo, KF11, Nicaragua

It had been a long week and I had looked forward to getting away for the weekend. The plan was to grab a book and spend a relaxing couple of days at the beach. Soon I would learn, however, that when your work involves development and you are living in a developing country, getting away from work can be somewhat difficult.

Continue Reading 1 July 2010 at 08:35 3 comments

Why Charge Any Interest At All?

Microfinance interest rate discussions usually center on how much and often overlook the question of whether poor microborrowers should pay any interest at all. Kiva lenders are a philanthropic bunch. They could eliminate interest rates and cover administrative costs with donations, but for economic and ethical reasons they shouldn’t.

Continue Reading 1 March 2010 at 03:23 15 comments

getting there

By Shereef Zaki, KF9, Perú

Cultural issues surrounding privacy can be one of Kiva’s biggest challenges regarding implementation in the field. Not everyone wants their photo publicized and many hold suspicions when it comes time to sign a waiver. But I think the biggest challenge for Kiva is far more prosaic. The act of getting to a borrower can be an ordeal in and of itself, and things just got more ‘adventurous’ at my MFI.

EDPYME Alternativa has created a new loan product – called Capital Semilla or Seed Capital – destined specifically for clients who will become Kiva borrowers. Loans of $300 or less at a low interest rate are now offered to rural entrepreneurs. Finding them for the interview generally involves a unique combination of collective vans, collective taxis, mototaxis and walking aimlessly through fields – for hours.

And the journeys take us through landscapes that are beautiful whether through unforgivingly desolate desert or knee high cornfields with palm and locust trees spotting the hazy windless horizons.

For your viewing pleasure I have chronicled one day’s worth of transportation that Manuel (the Kiva Assistant) and I embarked on in order to find just 4 borrowers.

Photos after the jump… (more…)

28 October 2009 at 10:26 3 comments

Unsung Heroes

By Shereef Zaki, KF9, Perú

‘Connecting people through lending,’ precedes ‘alleviating poverty,’ in Kiva’s mission statement. I have come to believe that the goal might actually be of a higher as opposed to a simple aesthetic preference. I mean, maybe we could eradicate poverty individually, but with the concerted effort of a community it can be done more effectively. In a community one can share ideas, efforts, problems, solutions and risks.

And last week that is exactly what Kiva’s partner institutions in Latin America did. For the second year in a row, nearly all the MFIs who work with us in South America sent a representative to our Cumbre (summit, or in this context conference). For a full day we talked about new site features, challenges to the microfinance industry, new organizational efforts and new collective ideas.

Connecting People - in every sense

Kiva connects people - on many levels

(more…)

9 October 2009 at 10:03 2 comments

To Have Illusions

By Shereef Zaki, KF9, Perú

What do you want to be when you grow up? What are your hopes? What are your dreams?

Throughout my childhood, these questions constantly attached themselves to the most prosaic daily interactions. In a sense I, and most of my peers, were conditioned to be ambitious dreamers, convinced of the limitless possibilities our futures held (and still hold).

When speaking with borrowers one of our unstated goals as Kiva Fellows is to uncover their latent sense of possibility and excitement at the prospect of success. During interviews I attempt to understand what aspiring entrepreneurs want for themselves and for their children. But one of the harshest realities that I confront concerns the occasional and precise absence of aspiration.

In no way am I implying laziness or even a lack of imagination; rather, survival tends to distract many Kiva clients from the potential realities that accompany success. And then I had an a-ha moment. While interviewing Yesenia Esmeralda Bances Morales (click to contribute to her loan), who seemed bemused when she heard the question ‘what are your hopes or dreams in life’ it dawned on me that it might have been the first time anyone had ever asked her that question.

Yesenia Selling at the Market

Yesenia Selling at the Market

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17 September 2009 at 08:25 2 comments

Necessity Entrepreneurship

By Shereef Zaki, KF9, Perú

On August 22nd the New York Times published the article On to Plan B: Starting a Business describing the unexpected spike of new entrepreneurs emerging from the wreckage of the crisis. They quote the Kauffman foundation and bring the term ‘necessity entrepreneurship’ into the mainstream. And in so doing they articulate one of the misperceptions that surrounds the incentives behind starting a business.

Sometimes I really get the feeling that the talking heads, professors, text-books and pols just don’t get it. And by ‘it’ I mean anything remotely human. To think that greed gets elevated as some sort of miraculously innovative force in the ‘opportunity entrepreneurship’ model, where interest rates adjustments can fix anything, still boggles my mind. As far as I am concerned, nearly all entrepreneurship is ‘necessity entrepreneurship,’ whether in the US, Egypt, Armenia or in Chiclayo, Peru.

Walking to Angelita's Shack

Walking to Angelita's Shack

The will to live and make a better life for one’s children are the driving economic forces in most places. People’s businesses are too small to fail — their families depend on them. The phrase ‘necessity is the mother of invention’ contains a truth lost on contemporary economic thought. Luckily it is not lost on Kiva Lenders, whose generosity grows when ‘opportunities’ dry up.

In the end, I cannot help but laugh out of frustration when I read statements like this: “But research on what is known as post-traumatic growth has found that some people become more resilient when faced with adversity, says Shawn Achor, a Harvard researcher. Creativity surges, he says, as they adapt to a new situation.” I read this during the evening, while during the same day I had been out to visit Angelita Loconi De Teque who is 47 and perseveres through ‘adversity’ to make a better life for the 4 children still in her care.

(more…)

9 September 2009 at 08:50 3 comments

On Buoyancy

by Joel Carlman, KF8

As I enter the final week of my Kiva Fellowship here in Kisumu, Kenya, I find myself thinking about what my time here has taught me.  Kenya is so different from any place that I’ve ever been.  The smiles are brighter, the hand-shakes longer, and the hospitality warmer than just about anywhere.

I know that I’m doing microfinance, and that Kiva is about borrowing and lending.  The terms, the accounts, the figures, and financials are so interesting to me, and that can sometimes seem like what it is all about.  During my fellowship, I dove deep into microfinance, and it’s tempting to look at everything through an analytical lens.  Even as a student of development, I always want to find the golden thread that leads you from problem to solution through the complicated fabric of global and local issues.

But, even more than borrowing and lending, Kiva is about connecting.  It’s hard enough to connect to people of your own background, from your own hometown, and of your own color, tribe, or social status.  How can we possibly connect to people so different from us?  I don’t know if I can really answer that question, but I am inspired to tell of the ways in which I have connected to this place during my fellowship.

Kiva Borrowers

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24 August 2009 at 11:47 19 comments

A $62 Million Dollar Mistake

The cancellation of funds and an expanding economic crisis has left the majority of Nicaragua’s poor without a support system.

Continue Reading 17 June 2009 at 07:35 2 comments

Training the Clients at ANK

On November 27-29 ANK held a training seminar for approximately 25 of its borrowers in the Kayole section of Nairobi. Kayole is on the outskirts, about 30 minutes from the city center.

The borrowers were mostly women, and they showed up a little apprehensive as to what they would be doing at the training. None of them have gone through any kind of formal training before and most have them never went to college; some had finished high school.

I was very happy to see that ANK was doing this kind of training. I have long wondered about this gap in microfinance: what good is it to loan people money who have little experience handling it? Most clients just seem to fall into a business and they learn as they go – wouldn’t a little training help them avoid costly mistakes?

I think, I hope, that this training helped the borrowers think through some issues that they had not considered before.

For example, almost no one kept any financial records. Everyone had an idea of what they earn, what they spend, etc… but no one could say for sure, and any kind of monthly or weekly analysis was out of the question.

For this reason, ANK brought in a CPA/business consultant to walk the borrowers through record-keeping processes, strategic planning, marketing ideas and other problems/issues that they may face. This was incredibly helpful for the borrowers, as they have never heard this information before, and without formal training, most of the ideas really never crossed their minds. Many of them told me that they live and plan day-to-day; this is a function of their environment, but also hurts their businesses, as they are frequently out of one product or another, and clients must look elsewhere.

After the training, clients seemed like they would prepare themselves; they would plan ahead, check on prices earlier, keep better track of their inventory and try to save a higher percentage of their profits.

I found one expense particularly interesting: cell phone use. In Kenya, cell phone credit is bought as needed. Phones are cheap and thus penetrate fairly well down-market, reaching even the working poor. Credit can then be bought for as little as 60 cents at a time (a call costs about 5 cents/minute).

I asked the borrowers if they kept track of their cell phone costs on a day to day basis. No one did. Most of them estimated that they spend about $2 every day on calls. I then asked them how much this adds up to per month, per year and then asked them what they could save over 5 years. They were shocked. I have a feeling that most of them have never planned that far ahead and never considered how a small cost like that could add up.

Kenyans are a chatty bunch. Friendly, convivial, and easygoing, cell phones seem like a natural fit for them. Many people even have 2 phones or 2 SIM cards, in order to talk to their friends who may be with a different subscriber, thus making it cheaper per call, per minute. Young Kenyans are as attached to their phones as any young American.

There have been many studies written about cell phone use in developing countries coinciding with a rise in GDP, or studies about how the working poor can use cell phones to find better markets for their products, or how consumers can find better prices through cell phone use. (A famous example of these studies is from the London School of Economics, examining cell phone use by the fishermen of the southwest Indian state of Kerela).

While these studies and their statistics may be true, cell phones, in the case of these particular borrowers, seemed more like a drain that the borrowers were underestimating or simply not acknowledging. After I posed my questions to the group we had a tea break and many of the borrowers pledged to me that they will from now on keep track of their cell phone costs and that they couldn’t believe how much it was really costing them.

Other than that, ANK brought in the KRA (the Kenyan IRS) to talk to the borrowers about taxes and other fees they must pay for their business. Stories abounded of borrowers having their businesses shut down because they were not registered, or they were not paying their taxes correctly and even of conmen posing as tax collectors coming to the business owners, flashing a fake credential and intimidating them into handing over some cash (and then walking off with it, obviously).

After the three days, the borrowers were excited about their prospects. They felt that they would now earn more simply by being more efficient and keeping better records. Some were excited, as they thought of new ways to expand their business without incurring too much more overhead.

Most of all, there was a feeling of optimism after the training. The borrowers felt that they could look ahead to better days. The post-election violence is becoming more of a memory every day, and by taking charge of their own business and running it more efficiently, the need for a loan might, one day, disappear altogether.

5 December 2008 at 13:33 1 comment


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