Tackling the 'Frontier' of Microfinance Provision in Kenya: Reaching Remoter Areas with Financial Services

Effectiveness of centralized and decentralized microfinance services in Kenya to increase outreach
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This presentation captures the advantages and disadvantages of a user-owned model against a centralized system, with reference to the increasing outreach of microfinance operations to newer areas in Kenya.

The presentation gives a picture of the current trends of microfinance in Kenya and the key challenges facing the sector.

  • One of the challenges that come out strongly is the need to extend outreach;
  • This is followed by a brief analysis of the five models operating in the country, namely:
    • Equity Building Society;
    • Women's Enterprise Development project (WEDCO);
    • Nyeri Farmers, Savings and Credit Cooperatives (SACCO);
    • Financial Services Associations (FSAs);
    • Managed Accumulating Savings and Credit Associations (ASCAs) - Women's Enterprise Development Institute (WEDI).

The paper:

  • Analyzes the models on the basis of promotion, ownership and governance, services, coverage, sustainability, strengths and limitations;
  • Then classifies them in terms of their effectiveness in geographical coverage and elimination of poverty;
  • It uses the microfinance experience of these models to elucidate the benefits and drawbacks of centralized and decentralized microfinance services.

About this Publication

By Johnson, S.