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Adapting ROSCA Methodology for Savings and Credit Self-Help: The KEPP
Steel, W.
Publication Date: 2004
Published by: London, UK: Alternative Finance
www.alternative-finance.org.uk
Document Type: Web Publication
Innovative adaptation of ROSCA methodology in Kenya
This paper presents the distinguishing features of the Kenya Entrepreneurship Promotion Programme (KEPP), initiative based in Thika, North of Nairobi in Kenya. At present, KEPP facilitates 61 groups with about 1400 members.
Key features of the initiative include:
- Establishment of registered self-help groups of about 20-30 members;
- Mobilization of savings to purchase 'shares' at monthly meetings;
- Payout of funds mobilized at each meeting in the form of loans to members, rationed (if need be) among demanders in proportion to their shareholdings;
- Different loan products, ranging typically from one month at 10%, to one year at 17% (flat rate), with only limited approvals of the latter;
- Annual dividends to members and group autonomy to decide on products, interest rates, loan approvals, penalties, and all essential matters.
The author states that while loans from KEPP groups are expensive, the surplus earned from the charges, which are as high as 10% a month, are used to build the groups' own funds for on-lending.
KEPP itself is a non-governmental organization (NGO), whose expenses are mainly funded by donors such as DFID, the Tudor Trust and others. In order to attain sustainability KEPP levies a management charge on the groups, to cover its expenses and to reduce donor dependence.
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