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.
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 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…
Nairobi is a vibrant place. I knew this coming into my fellowship. The city had been described to me as both the “Paris of Africa” (Google tells me that title is actually held by Dakar) and the “San Francisco of Africa” (Kenya’s views on homosexuality are definitely not on par with SF).
While neither description is completely apt, neither is far off the mark. The development and social enterprise scene here is truly invigorating and the direction of East Africa’s development will be influenced not only by large agencies like the World Bank and UN (both of which are based here) but also by these grassroots social entrepreneurs… and their hard-partying ways.
I was first observed this social dynamic when I attended “Blankets and Wine”, a monthly gathering of ex-pats and Kenyans that involves music, dancing and… well… blankets and wine.
Last Sunday afternoon (after taking a slight detour to chase a Giraffe Truck!), I went to Blankets & Wine with a friend from Vancouver and a few of her friends (all of whom work in international development in some manner or another) . Soon after setting up our blankets and uncorking our (first) bottle of wine, we met up with others that were unwilling to let the weekend slip away after a big Saturday night. As the party continued and conversation turned to people’s work and interests two consistent themes emerged – social entrepreneurship and innovative models for development.
Innovation, Development and Social Enterprise has been common conversation at all the parties I have attended since arriving in Nairobi. People here are engaged in some great things and that leads to some great conversations (and apparently some great parties). The conversation is being led by organizations such as the One Acre Fund (Conservation Farming), Sanergy (Sustainable Sanitation), Acumen Fund (Impact Investing), Open Capital Partners (Social Financial Advisory) and technology centres such as the iHub. This is not to mention the countless start ups that are trying to gain a foothold in the growing East African market.
Thankfully Kiva is not being left out of the conversation, or the party.
In fact Kiva, is at the forefront.
Kiva is capitalizing on Nairobi’s status as development hub for the region as well as Kenya’s unique mobile banking infrastructure and entrepreneurial spirit. In combination with Kiva’s lending platform and dynamic lendor base, Kenya is a natural fit to pilot Kiva Zip.
At scale, Kiva Zip is envisioned as an alternative to Kiva.org’s current lending model with increased connectivity between borrowers and lendors. At it’s most optimistic, Kiva Zip has aspirations of becoming a groundbreaking alternative to traditional microfinance. Instead of using microfinance institution field partners to disburse, post and service microfinance loans, Kiva Zip uses trustees to identify and endorse potential borrowers that could benefit from Kiva lendor’s low cost, risk tolerant capital.
In practical terms, Kiva Zip’s pilot project in Kenya allows invited Kiva lendors to select and loan money at zero interest directly to borrowers from Kenya who have been endorsed by vetted trustees. Once a loan is funded, the loan is sent directly to the borrower’s M-PESA account. M-PESA (M for Mobile, Pesa means money in Swahili) is a mobile phone based money transfer system that is used heavily throughout Kenya (interestingly, M-PESA’s initial development was undertaken to allow the repayment and tracking of microfinance loans for traditional microfinance institutions).
After receiving the funded Kiva Zip loan, borrowers can use M-PESA to pay for income generating assets using their mobile phones or withdraw the funds from an M-PESA agent. Borrowers will repay the loan principal using the M-PESA system which will send the repayments directly to Kiva’s lendors through Kiva’s existing payment infrastructure.
To date, Kiva Zip has on-boarded approximately 25 trustees and the pilot includes almost 200 borrowers in Kenya. Part of my fellowship will be spent with the Kiva team here in Nairobi assessing how the program has worked so far and how Kiva can operationalize and scale its Kiva Zip operations.
The Kiva team here in Kenya is excited about the possibilities for Kiva Zip but understands the risks for all the stakeholders involved. Recently, we all got together with some folks from Kiva head office in San Francisco for an offsite meeting to discuss Kiva Zip’s strengths and weakness and where it fits in Kiva’s operations.
In true Nairobi fashion, it turned into quite a party.
Patrick Seeton is a Kiva Fellow, working in Kenya this summer with Kiva Zip and field partner SMEP Deposit Taking Microfinance, a microfinance institution based in Nairobi with close to 40 branches throughout Kenya. Find out how you can become a Kiva Fellow or just more information on kiva and microfinance in general on kiva.org.