We were told to be ready around 7:15, but we didn’t leave until 7:45. In a very full car (me, Julie, Mary, Wallace, Victory, Faith, Bethany’s parents, and a house worker) we dropped off the kids at school. We arrived at Pongani around 9:00. Today we would get to hang out with the people in the Business Development Service department (BDS).
Julie and I chatted with Wallace for about an hour. He told us about his role as director. He purchases land and acts as a liaison with local government and other organizations. Eventually he would like to train someone to do these things. He told us his strategy for leadership. It is his goal to manage the system and let the system manage the people. He wants to allow people to thrive in the best environment possible.
BDS has two main divisions: microenterprise and skills training. Microenterprise is a group based lending program. For a person to get a loan, they must form a group of at least 10 people. This group goes through 8 weeks of intro training. Each individual must have money in savings (25% of their monthly earnings) and the group cosigns the loan. Each person in the group must keep financial records in a passbook. Each group is assigned a loan officer and they meet up once a week. The whole microenterprise program has over 800 clients. Some examples of businesses are: charcoal, firewood, hawkers, food, used clothing, butchery, delivery, and sewing.
The first loan an individual can receive has a interest rate of 25%. Any loan after that has a rate of 15%. (These rates are actually competitive with banks here.) Because of high interest rates in Kenya many projects get completed in chunks. Like a floor will be constructed, more money will be saved, and then another floor will be built.
Loan officers assess people to see if they qualify for a loan and then meet with the groups receiving loans. Currently there are 46 groups and 50% of the individuals in each group have a loan. This number should be closer to 80% (this is the goal). There is a $100,000 outstanding loan balance right now.
People’s lives can be transformed by a small loan. They not only get the opportunity to invest in their own business, but they get to have support. Perhaps for the first time, someone believes in them. They have a network of friends and businesspeople.
The amount of money people can take out in a loan is doubled each time the loan is paid back. Currently in the slums money and business is localized, which makes it hard for these businesses to expand. For example: There are 5 firewood shops in an area. The number increases to 8 shops in the same area (possibly due to microloans). There is still only enough demand for 5 firewood shops in the area. Therefore, the total profits available are now divided by 8 people instead of 5. This is one problem BDS faces.
In Nairobi unemployment is currently around 40-60%. In America we were freaking out when the unemployment rate reached 12%. In Nairobi, roughly every other person is unemployed. This number is crippling the economy.
Two parts of the solution is empowerment and international trade. Right now there is too much aid money being thrown at the problem. This is only teaching people to be dependent on the current system and handouts. Kenya needs to be empowered to grow their economy. Economic growth will really happen through international trade.
In the afternoon, we got to shadow a loan officer and the man she was training. Their names are Jennifer and Francis. Francis is around our age (I think). We started walking from the center in Pongani until we reached a main road. While waiting for a mutatu, (bus/van taxi) some weird boys cam up to me and Julie. They seemed almost drunk and were talking to us. We had no clue what they were saying, but they had something in the sleeve of their jackets that they kept bringing up to their faces. I was glad we had Francis with us because he told the boys to get lost. He said that they were street boys who were probably sniffing glue. It made me really sad. Their demeanor was unlike anything I had ever seen. They were probably about 15 years old.
We all hopped in a mutatu and inside was cramped but there was sweet party music playing loudly. We drove for less than 10 minutes to get to another part of the slum area. As we drove, we could see down into the valley where it was totally packed with shanties. I am amazed at how expansive the Mathare valley slum is. It’s just pure slums everywhere.
We jumped off the mutatu and walked down a street to visit some local businesses who had taken out a loan through Missions of Hope International (MOHI). It was amazing to be able to walk through the area of slums. If we weren’t with MOHI there is absolutely no way we could have walked anywhere we went that day. We always felt safe and Jennifer knew quite a few people. We stopped by around 8 shops to say hello and encourage the owners. It was amazing. I felt humbled by the hospitality shown to us. We walked down a street with apartment buildings on either side of us and on every balcony clothing was hanging out to dry.
The group continued visiting local businesses until we reached the woman’s house that we were going to do a financial assessment with. She invited us into her home with great hospitality. She had three kids there with her and they were very cute. They were curious about the visitors. After the assessment, we went a little further and met a woman who made clothing to sell. She also had a school in her shop to teach other women how to sew. Julie and I were able to talk to her for a while because she knew some English. We encouraged her and by just meeting her, she encouraged us.
On our way back, Jennifer bought us each a fresh banana from a street vendor. It was delicious, but obviously there was no place to throw the peel. We all tossed them in a pile of trash that looked like it was burned occasionally while waiting for the right mutatu (number 46). As we were walking back we asked Jennifer how safe it would be for Julie and me to walk alone in the area. She said that it wouldn’t be a very good idea, but people would leave you alone if you looked confident and knew where you were going. That made me feel better, but we don’t plan on taking a stroll in the slums anytime soon.
At the end of the day Julie and I waited around until about 5:00 for a ride home. At home we “went to Mexico” for dinner. This entails us stuffing our faces with the tastiest Mexican food ever at the Kamau’s. Everything was so fresh and amazing. The guacamole was made with fresh avocados and you could really taste the difference.
After dinner Wallace talked a little more about MOHI. He stated, “If these slums continue to grow it will be disastrous.” This is a very true statement. The slums are so huge in Nairobi that it is hard for me to conceptualize their size. I could easily get lost in the maze for weeks. He again emphasized that their mission is to transform lives.
People will not change their ways here by simple suggestion. They need to be shown a better way. They need to be shown the love of Christ.
It was so interesting to read about the group based lending program through MOHI. I am becoming more and more thankful for Mission of Hope and all that do for the people. May God continue to bless Wallace and Mary and all of the workers who are serving so diligently and who desire for lives to be transfomed by the love of Christ.
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