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Higher impact: Kiva’s work to incubate small and growing businesses

Around the world, Kiva partners with amazing organizations who are achieving great things within their communities. Below, our Labs Senior Partnerships Manager, Michelle Schenck delves into our Kiva Labs program. Labs provides crowd-sourced, risk-tolerant capital to new, innovative organizations making a positive social impact in their communities.

Some of these are social enterprises, nonprofit organizations or NGOs. Other impact investors often consider these to be too risky, but quite frankly, we disagree. Kiva believes in the mission and impact of these organizations, and works hard to foster their growth into maturity. Organizations that we partner with in this way can either provide loans to their borrowers/entrepreneurs, or access working capital loans for their own operations and expansion.

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Jibu water treatment system and production operator. Photo courtesy of Jibu

If you’re wondering what an ideal Labs partner would look like, consider Jibu in East Africa. Meaning ‘solution’ in Swahili, Jibu is a social enterprise that seeks to address two emerging market challenges: the lack of meaningful economic opportunity and affordable drinking water.

According to the International Labor Organization (ILO), the region’s youth unemployment rate is around 25%, and according to UNICEF, about 47% of people cannot afford safe drinking water on a daily basis. By providing financing and equipping local entrepreneurs to create access to clean drinking water, Jibu gives people the tools they need to create opportunities for themselves and their communities.

Jibu’s primary target market is the “middle 70%” who often cannot afford drinking water. Jibu’s affordable pricing allows this growing segment to drink exclusively safe water every day. Jibu’s Water Club also subsidizes the price to ensure their water is affordable to the poorest bottom 20%.

Experienced local entrepreneurs can co-invest in a franchise with a turnkey model that includes the full suite of equipment, training and tools required to run a successful business. Jibu entrepreneurs are quickly scaling up a network of locally-owned clean water franchises in seven countries: Rwanda, Uganda, Kenya, DRC, Tanzania, Burundi, and Zambia. By the end of 2021, Jibu had expanded to 154 franchises and 8,500+ resellers, created 3,108 jobs and supplied 333M liters of safe drinking water.

The organization can filter water from almost any source, whether it is contaminated tap water, a lake, a well, or a spring. Jibu locates its stores near community water sources that are closest to strategic, high population density areas and then configure a system to properly filter that water. Customers pay a bottle deposit and then exchange empty bottles for new, full bottles. Jibu is able to make a profit while keeping the cost of water low because of its distribution model, refillable bottles and lack of middleman markups.

Joyeuse exemplifies the joy of being a small business owner

Joyeuse is a Jibu water franchise owner in Rwanda, and her Kiva loan completely changed her business, her community and her life!

Photo of Joyeuse, a Jibu franchisee, by Jeremy Jue, Kiva Media Fellow

After Joyeuse received her loan, she was able to purchase a delivery van for her water business, to improve marketing and distribution. This was huge for her business—she went from having 17 resellers to 53. With this increased income, she’s been able to grow her business and reach more people—which means more accessibility to clean water for people in areas of East Africa.

Check out the video below, filmed in Rwanda by Kiva media fellow Jeremy Jue, to learn more about Joyeuse's story.

An evolving partnership

Our partnership with Jibu shows how Kiva can grow with an organization and find new ways to best support its impact. Galen Welsch, Jibu’s founder and CEO, first reached out to us to establish a partnership with an initial $50,000 credit line in 2016. This enabled Jibu to provide its franchisees with 0% interest loans to purchase water bottle inventory.

In 2017, we expanded the partnership to include loans for delivery vehicles, which helped franchisees grow their business and client base by expanding distribution.

By early 2018 Jibu was ready to use more credit and they graduated to a $200,000 credit line. By the end of 2018, Jibu wanted to expand into the Democratic Republic of Congo (DRC) and Kiva provided a $50,000 Direct to Social Enterprise (DSE) working capital loan to launch in the country.

In 2019 it was clear that Jibu could use many more DSE loans to launch franchises. We were eager to innovate within Labs, so we created a new ‘franchise launch’ loan, enabling Jibu to set up more franchises faster. We also increased their credit line to $400,000 and provided a second DSE loan to Jibu Tanzania for their expansion.

In 2020 we increased their credit line once again, this time doubling it to $800,000 and we also provided Jibu with Kiva’s first Crisis Support Loan during the COVID-19 pandemic. This $100,000 loan at the beginning of lockdowns helped Jibu to quickly ramp up their delivery services as customers could no longer go to Jibu franchises, but Jibu could deliver drinking water, since they were deemed an essential service.

Kiva's crisis support loan to Jibu was able to help franchisees like Jeanette, as well as their employees

By 2021 Jibu Tanzania, which operates as a licensed franchising affiliate for Jibu in Tanzania, was ready for its own Kiva partnership and was brought on with a separate $200,000 credit line. Our main Jibu partnership also increased to a $1M credit line by the end of the year, giving Jibu a total of $1.2M in credit with Kiva.

And finally, 2022 is off to an exciting start as Kiva approved Jibu to provide direct loans to its other franchising affiliates in Burundi, DRC, and Zambia.

Joyeuse' van used to distribute water

Looking forward

Jibu is now looking to launch in Ghana and ultimately the organization hopes to expand to over 35 countries, so there is unlimited potential for growth.

It’s important to share this story with the Kiva community to highlight the innovative financing within Kiva Labs for growing social enterprises. At Kiva we’re proud of our work with Jibu, which supports emerging market entrepreneurs, job creation, and access to affordable drinking water. We’re excited to continue expanding our joint impact and supporting new products and models, which is possible because of the solid partnership we have formed over the years.

Laura Asherman, Kiva Media Fellow and Jeanette, Jibu franchisee

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About the author

Michelle Schenck

As a Senior Partnerships Manager for Labs, Michelle is responsible for the oversight and expansion of Labs partnerships in Africa, Asia, and the Middle East. The Labs program scales high-impact social enterprises and promotes innovations in financial inclusion. Michelle started working with Kiva in 2013, based in the Nairobi, Kenya office. Prior to Kiva, Michelle volunteered with the Jane Goodall Institute in Uganda, conducted research with the Wildlife Conservation Society in Gabon, and taught African geography courses at the University of Wisconsin-Madison. She holds a Master's degree in Geography and African Studies and a Bachelor's degree in Zoology and Conservation Biology from UW-Madison. Michelle is now based in Johannesburg, South Africa where she dreams of visiting all of the national parks in Africa.