A fortnight to financial freedom, the tale of Tabitha Self-Help Group

Women often find themselves marginalised from formal banking systems due to financial and cultural barriers. This has, over time, hindered their financial inclusion, making them among the poorest groups of people in Kenya.

It is for this reason that the Women Enterprise Fund (WEF) was established in 2008. Last year alone, the government allocated Sh182.8 million to the fund to increase access to affordable credit to women.

Ruth Randa, a manager at the fund explains why the fund is specifically geared towards women. 

“Discriminatory lending practices such as higher interest rates or lower loan amounts offered to women compared to men, prevent women from accessing credit from banks. There are also cultural norms and gender biases that restrict women's access to financial services, limiting their ability to open bank accounts, obtain loans, or access other financial products.’’ Ms Randa says.

She adds that limited financial literacy compounds these challenges, leaving many women vulnerable to exploitation and economic dependence.

“As a result, women are often forced to rely on informal financial mechanisms, such as savings groups, which may not provide adequate support or opportunities for long-term financial growth,’’ she says.

Read also: How hitches saw traders miss out on the affirmative action millions

In line with this year’s International Women’s Day theme: Accelerate Progress: Invest in Women, Nation.Africa spoke to the women of Tabitha Self Help Group, who are landowners and entrepreneurs. We wanted to establish how the State fund has contributed to their success.

Jane Karomo, the chairlady of Tabitha Self-Help Group, which consists of 11 members, tells us that their journey towards financial empowerment started in a rather humble manner.

Officially starting in Nairobi in 2001, with a merry-go-round arrangement following the demise of a neighbour's father in Kasarani's Mwiki area, the group found themselves in dire straits.

“We weren't in a good place and it was very hard for us to even support her. We wondered whether we would be ready, in a position to support if such an occurrence happened again," explains Hannah Wambui Muthoni, 50, a member of the group who also owns a cereals shop.

“We began with contributing very little money, Sh300 per member. We would then give the money to one of our members once a fortnight,’’ she recounts.

This marked the initiation of their table banking activities. The group's initial endeavours through merry-go-rounds yielded minimal returns. Faced with insufficient funds for start-up capital, the group devised a unique system. 

“We decided to allocate everyone non-existent loans (Mahewa) of Sh20,000 each. Each person would then be required to repay the non-existent loan with interest within a year. That is how we were able to raise capital for our first businesses,” Regina Kamau, 67, who serves as the group's secretary says.

Once collected, they would subdivide the money amongst themselves according to need. No one would get the entire contribution so that each member gets something.

Read also: How to access Women Enterprise Fund

After undergoing WEF training at the District Officer's office and registering formally in 2007, the group learned about the benefits of organising themselves into registered self-help groups to access loans. 

They loved the fund due to its favourable interest rates and extended repayment period, contrasting starkly with the high rates offered by local banks. 

"For WEF, the interest is five per cent and is deducted before the loan is disbursed. Some lending institutions we had considered were charging 18 per cent interest! We could not take those loans," Eugenia Wanjiku, a member says.

“Our first loan was Sh50,000 that we repaid in 12 months. Local banks would not have given us such a meagre amount with such a long repayment period. Our businesses were quite young we would not have been able to repay within short period.’’

Alice Muhia, also a member, notes that they were a little discouraged with the first loan amount they were granted because they were hoping for more.

“We initially wanted Sh120,000 but our loan officer informed us that because it was our first loan, we had to start with the minimum amount. I wanted at least Sh10,000 to help me transition from the malimali business I had, to selling cereals, but I decided to restock instead,’’ Hannah says.

Victor Nyanja, Tabitha Self-Help Group loan officer, tells us that over time, the group's good credit history led to them qualifying for higher loan limits.

“After their first Sh50,000 loan in 2013, their loan limit kept doubling every year until in 2018, they got Sh350,000, Sh500,000 in 2019, and finally Sh750,000 in 2021,’’ Mr Nyanja says.

To ensure repayment, they would collect contributions for instalments before the due date and make sure it is deposited.

“We also conduct fortnight visits to each other’s business to evaluate how members’ businesses were fairing. We cannot lend you money and find that you have not restocked yet we are depending on the success of your business to repay the loan,’’ Hannah, the treasurer says.

Due to their success, the women grew so much that they ventured into significant investments like purchasing land. 

"By 2019, we qualified for Sh500,000. We decided to become land owners. We bought land in Ruai for Sh750 ,000. We used the loan as down payment and contributed Sh250,000 to purchase the land. We chose land because it is a long-term investment and it appreciates,’’ Mercy Mwangi, another member says.

They completed paying the loan in two years and sold the land for Sh1.8 million in 2021.

“It was our biggest payday. After years of toiling, we were finally millionaires! We split the money among ourselves. I used my share to expand my day-care, which was operating in two single rooms to a fully functioning facility. I am even planning to turn it into a nursery school within the course of this year,’’ Lucy Njoroge says.

Another member, Eugenia Wanjiku, says she used her share to pay college tuition fees for her two children.

Seeing the success of their earlier investment, Tabitha Self-Help Group got another loan of Sh750,000 from the State fund, which they used to purchase land in Ruai in 2021.

Looking ahead, the group aims to venture into rental property investments, a testament to their remarkable journey from marginalisation to financial empowerment.

"Our lives have truly changed! It is like witnessing a child grow. We started with contributing Sh300, but today, because of the loans we were given and the investments we made, we can contribute Sh40,000 every fortnight," says Jane, the chairlady.

Their contributions are now directed towards personal development projects since all their businesses are flourishing. Some of them, for instance, say they are planning to renovate their homes.

On the secret to their success, Regina says: “You must be careful. You must conduct due diligence before admitting a member into your group. In our case, if you default we come for you. We began with 30 members but we are down to 11 .We don't entertain defaulters.”

According to Ms Randa, since inception in 2008, they have disbursed Sh26.4 billion to 136,721 groups under the manual system, and Sh941.9 million to 18,955 groups under digital lending. More than one million beneficiaries have been trained across the 290 constituencies on entrepreneurship and financial literacy skills, and over 40,000 facilitated to access markets.

She also says women can access the fund through dialling *254# on their Safaricom lines. 

“We recognise the difficulties many women entrepreneurs and business owners face due to the temporary pause in lending. We are committed to finding solutions that address their needs and ensure equitable access to financial tools once lending resumes,’’ Ms Randa concludes.

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