Although the 2018 IMF Financial Access Survey confirms a positive trend in access to financial products and services in Sub-Saharan Africa, many people are still excluded from the formal financial market system. Sub-Saharan Africa comprises 48 countries and 47% of the people live on less than $ 1.9 a day (World Bank 2018). To a considerable extent this is due to limited access to financial products and services. For instance, in Kenya alone, a 1/4 of the population or about 10 million people have access to fair credit or savings opportunities. Similar trends are seen in Uganda and Tanzania. In all 3 countries, the majority earns their living from agriculture and are mainly subsistence farmers. The sector faces several challenges such as low-yield harvests, inconsistent weather patterns leading to recurrent droughts and floods and insufficient or no access to local markets. Undoubtedly, there are knowledge gaps around access to finance and majority of the people - particularly the bottom poor - cannot access financial services due to lack of credit history, financial illiteracy, varied policies and the geographical distance of the institutions.
By pushing the «banking frontier» further down the poverty line, access to financial services for smallholder farmers and micro-entrepreneurs increases, thereby boosting their economic activities. With their own savings and microloans, target groups can respond better to income fluctuations, protect themselves against crisis situations such as illness and crop failure, and build up their entrepreneurial skills. The programme is implementing innovative financial products tailored to the needs of the disadvantaged population groups. Beneficiaries’ incomes and their quality of life are improving significantly. Additionally, the programme is building the skills of the financial services workforce, thereby improving professionality and diversity within that sector.
The programme also acts as a competence centre, offering financial service advice to other projects within the region that target smallholders, MSMEs, youth in TVET and housing cooperatives.
Programme Objectives 2017-2020
- 11 200 smallholder farmers (nearly 50% women) will access financial services.
- 900 smallholder farmers will benefit from innovative finance products; warehouse receipts, micro-insurance and contract farming arrangements.
- 1 400 microfinance specialists will acquire market-relevant skills and be certified. 980 of these specialists will be employed or engaged in the financial sector.
⇒ By learning skills in finance and gaining access to financial services, 70% of beneficiaries will increase their incomes.
- Development of community savings and lending groups. This programme provides an entry point for financial literacy and access to financial products and services. Community members are organised into groups called Mavuno and provided with essential training and linkages to formal financial institutions.
- Development of Microfinance Institutions (MFIs)/Savings and Credit Cooperative Societies (SACCOs). The programme supports the improvement of institutional systems, processes and staff skills with the view of improving service delivery. With enhanced capacities, the supported MFIs/SACCOs are able to deepen awareness and offer tailored quality financial products and services to the beneficiary groups.
- Promotion of access to productive assets. The programme supports partner capacity building to develop microleasing products and offers training to businesses to encourage the acquisition and use of productive assets to expand activities, increase net incomes and create additional jobs. Learn more about microleasing.
- Development of micro-finance skills. The programme seeks to deepen access to finance by bolstering human resource in the microfinance sector with the appropriate knowledge and skills to develop suitable products and services for the financially excluded. Through this, practitioners will gain increased expertise around developing and marketing quality products and services for the financially excluded, thereby deepening access to microfinance.
- Innovating and testing new financial products and services. Swisscontact helps to develop and deploy innovative products and services to improve business efficiency and effectiveness, increase incomes and resilience and reduce costs: warehouse receipt system, micro-insurance, contract farming.
Results 2017 - 2019
- Between 2017-2019, the project's activities reached around 12 493 small farmers and micro-entrepreneurs (65% of them women), who had access to informal and formal financial services and products. The results and impact measurement showed that of the smallholders and micro-entrepreneurs who were reached in 2017 and 2018, a total number of 6 340 people (62% of them women) increased their average annual income by 150% thanks to access to financial products. Thus, they improved their living conditions and those of their families. In 2019, 3 196 smallholders (70% women) increased their annual income by +41% each.
- In addition, The Cooperative University of Kenya launched the microfinance course in 2019, which 15 microfinance students (9 women) have started. After completing the course, the graduates will bring their knowledge to financial institutions.