An Introduction to HopeCore’s Micro Enterprise Department
An Introduction to HopeCore’s Microenterprise Department: What We Do, Our New Project, and Success Stories
Village HopeCore International is a small, innovative, non-governmental, community-based organization that has its headquarters in Chogoria town, Kenya. HopeCore works in Chogoria and its surrounding communities to alleviate poverty through microfinance loans and micro-enterprises with business training and support, health promotion, and disease prevention programs. Village HopeCore is cultivating a blossoming tree of liberty, justice, and economic prosperity in Kenya. This blog features an introduction to the micro-enterprise division of HopeCore, descriptions of one of its new projects, and success stories from two of its loan clients.
Introduction to Our Program
The HopeCore Micro-Enterprise/Lending Program is not strictly a microfinance institution, but a poverty reduction and development project. Our goal is to eradicate poverty in the communities we serve (Tharaka Nithi County, Maara District) and one day, throughout all of Kenya. Our micro-enterprise services, provided to each of our twelve-member Self-Help groups, include:
Microloan advances
Business and financial literacy training
Business plan creation support
Business monitoring and advice
Community mobilization and support through innovative development projects
Assistance for initiating merry-go-round banking and group savings plans
The HopeCore Loan Cycle
Merry-go-rounding Savings Scheme Group members each commit to contributing a set amount of money each month, week, or specified time period. Every time contributions are made, one group member receives the entire sum of money. This continues until the group has completed a full merry-go-round, that is when every member of the group has received the entire sum of money. This savings scheme is a method of saving that is interest-free and beneficial to both a group (for group cohesiveness and support) and an individual (as large lump sums of money are often more valuable than smaller amounts due to products or services individuals may wish to purchase for their businesses). Group members make contributions of some set amount of money and the group votes on how each member will receive the money at different times of the year.
Soft Loans Groups that are successful in the merry-go-round savings phase, as well as a “table banking,” or group savings/loan phase, are eligible to get “soft loans,” money that HopeCore adds to the group table banking amount. With this additional money, the group members are able to lend more money within the group, and hence, get more money. The HopeCore soft loan is either KSHs 30,000 or KSHs 60,000 per group, depending on a range of reasons that are made clear to loan clients during group training. The soft loan repayment period is six months at an interest rate of 4.5%. HopeCore encourages its clients to lend money at an interest rate of 10%.
The 5.5% is retained as additional money to the group table banking, and the remaining 4.5% is the interest rate that goes to HopeCore.Normal LoansHopeCore loan groups are usually loaned a total of KSHs 360,000, with each member in the group receiving KSHs 30,000. The repayment period for normal loans is two years with the first two months as a grace period. This grace period allows clients to invest the money and earn and collect their profits before they start paying back the amount they were loaned.
Second Loans
If individuals are successful with repayment of their first loans, they can apply to receive second loans before the first loan period has ended, or after the period is over. If HopeCore micro-enterprise staff determines that their needs are sufficient and that they have proven trustworthy and capable of receiving and repaying a second loan, individuals will receive another loan at the same interest rate as the first. Throughout these stages, business training – which includes business plan drafting, savings advice, and networking/communication support – is offered to all of our loan clients.
A New Project: The HopeCore Greenhouse
A “greenhouse” is defined as a building or complex in which plants are grown. These structures range in size from small sheds to industrial-sized buildings. The greenhouse project is a new innovation in HopeCore. Groups are trained and given loans to finance the purchase, installation, and maintenance of their greenhouse with the hopes of growing enough marketable crops to make a substantial profit. We believe our Greenhouse projects are very productive and helpful to the youth who can form a group and commit to working as a team to make their group’s greenhouse a success. HopeCore has lent money to youth for the purchase and management of two 8×15 meter greenhouses.
The HopeCore Greenhouse Group was loaned KSHs 360,000 to purchase two greenhouses, install a drip irrigation system, and buy seeds, fertilizers, and other materials. From the greenhouses the group is projected to be capable of repaying the money within less than a year, assuming they put in a considerable amount of effort and work to successfully manage the greenhouses. HopeCore has ensured the pioneer group members of this new project will get the best in terms of consultation, advice, and moral support to encourage group cohesiveness and understanding of greenhouse operations. The expected results from the Greenhouse Project are:
Increased income for group members
Increased food security in the Maara District, in which HopeCore operates
Self-employment opportunities for the youth
Better and improved food products
Moral support and encouragement to youth who are in between jobs and educational stages in their lives
The pioneer HopeCore Greenhouse youth group and a past microenterprise fellow pose proudly with some of their crops in front of their greenhouse
Success Stories
As HopeCore loan clients, individuals who receive our services are part of our HopeCore family. We are very proud of the following individuals, as they have overcome many obstacles and successfully improved their businesses and are now happy, healthy, and prospering.
Esther Mweweria, age 48, hails from Klambugi, a small village in Majira, and was forced to drop out of school in Form 2. She is married and has three children who are under her care. With her level of education, she was faced with adversity and found it difficult to “dream big,” but there is one thing that inspired her and that is her passion: knitting. Despite the hardships that surround her life, her passion lifts her spirits, sharpens her focus, and gives her hope for better times ahead.
Initially, Esther was in a school uniform sweater knitting business that earned her little living for her and her family’s survival, as she did not have the means to quickly produce as many school sweaters as were demanded of her. Her husband was in a coffee and banana farming business to supplement what the wife earns. Esther continued to reassure herself and her husband that her past and current circumstances didn’t determine her potential for future success, and this mindset has helped them persevere. After receiving the HopeCore loan of 30,000ksh ($352.90) on May 2012, Esther felt reenergized and even more hopeful for a bright future, despite the struggles she and her husband had gone through. She is currently in her first loan cycle.
Before her loan, Esther went through HopeCore’s business training program. This training (i.e. how to develop a business plan and how to keep up-to-date records) not only mentored her but also inspired her to not change who she was and instead focus on the huge potential of what she could become. With this training and the loan money under her belt, she expanded her knitting business and bought a new knitting machine which helped her work more efficiently. This led to an increase in the number of customers, resulting in an improvement in her standard of living. Prior to the loan, Esther used to earn a monthly profit of 15,000ksh ($176.40), and that catered for all her home expenses (feeding, paying school fees, medical bills), but after the HopeCore loan, she now earns an overall of 32000ksh ($376.40) monthly and is also in the initial stages of running her own dairy farm. Her overall percentage increase for her household is 213%.
With the profit she now doesn’t strain in paying school fees and her children are able to eat nutritious food and afford good medical care whenever they are sick. Esther also learned from the HopeCore Public Health Staff not only how to prevent ailments but also how to plan for her family. She is able to sleep under the HopeCore-provided treated mosquito net and get access to clean water, proudly living by the saying: “A healthy nation is a wealthy nation.” Esther hopes one day to build her business and expand its influence such that she will be the sole provider of school uniform sweaters in Chogoria.
Moris Mwigiri Kaburu was born in 1979. The 35-year-old carpenter ran a carpenter workshop that didn’t earn him much for his survival. He is married and has two dependent children hence was able to engage in charcoal selling business to earn a living. He wasn’t able to do much business with the tools that he had and hence was living in poverty. Life was not simple for Moris due to the high cost of living; he was subjected to work tirelessly and relentlessly so as to provide for the basic needs of his family. He struggled to work harder and more intelligently in order to survive during these demanding times. His Spouse was in chapatti selling business which earned her 7,300ksh ($85.80) to supplement what they earn in the household.
After successful business training, he was fortunate to receive a HopeCore loan of 30,000ksh ($352.90)during the month of May 2012; this was his first loan cycle. Moris was initially in a charcoal-selling business to provide basic needs like food and clothing for his family before the funding. According to Moris, having been funded was a life-changing moment for him that ultimately led him to success. With his perseverance and commitment, he was able to overcome obstacles and move forward toward supporting his family and achieving his dreams. Business training inspired good business ideas in him and helped him become proficient in record keeping.
With the loan, he was able to expand his workshop and purchase materials to help him provide more services to his clients. Due to HopeCore’s support, he was able to earn a profit of 5000ksh ($58.80) per month from his business. His overall household income increased to 12,300ksh ($144.70) with the loan due to diversified business ventures (charcoal selling and carpentry). This is a percentage increase of 246%. With his profits, he was able to install piped water and send his children to school. Moris is also very happy that he is able to begin building a more secure stone house with these profits. Because of the health education also included during business training, he now practices good hygiene and family planning and prevents malaria by sleeping under the insecticide-treated mosquito net HopeCore provides all its loan clients. Moris, who now aspires to purchase a farm given the great progress of his business, is certainly a man full of hope and proud of his successes.
Written by Martin Kimathi Kirimi and Jillo Shamzad, both HopeCore staff members in the Microenterprise Department. To learn more about them, as well as other staff members, please see the “About Us” – “Current Chogoria Staff” section of this website.