Sustainability of Micro-Enterprise Credit Schemes in Kenya's Informal Sector (K-REP, 1993, 14 p.): 1. INTRODUCTION

Sustainability of Micro-Enterprise Credit Schemes in Kenya's Informal Sector (K-REP, 1993, 14 p.)

		(introduction...)
		1. INTRODUCTION
		2. THE K-REP MINIMALIST GROUP-BASED CREDIT AND SAVINGS PROGRAMMES
		3. CREATING SELF-SUSTAINING MICROENTERPRISES CREDIT SCHEMES
		4. SUSTAINABILITY OF K-REP FUNDED MINIMALIST SCHEMES
		CONCLUSION
		BIBLIOGRAPHY

1. INTRODUCTION

NGOs have traditionally been dismissed as ineffective providers of credit, they are generally regarded as being primarily concerned with social welfare objectives and overly reliant on foreign funding. This view of NGOs is changing in Kenya with the advent of NGOs like the Kenya Rural Enterprise Programme (K-REP) who are solely established to provide credit to microenterprises. The traditional welfare credit approach of NGOs is being replaced with commercial, sustainability focussed credit programmes, run by increasingly experienced and professional staff achieving high repayment rates (above 95%) and aiming towards self-reliance (severing the umbilical cord that binds them to donors) in the shorter or intermediate run. In the phraseology of Elizabeth Rhyne and Maria Otero "A Financial Systems Approach to Microenterprise" is being adopted and there is a significant 'take-off in micro enterprise credit and support following group based saving and credit models. The potential is great for significant contribution by NGO credit programmes to microenterprises development and to financial service provision for low-income entrepreneurs. This paper focusses on experience of the 'minimalist' group based savings and credit programmes designed and funded by the Kenya Rural Enterprise Programme.