Following the December 30, 2007 results of Kenya’s presidential election, the opposition party led by Raila Odinga rejected President Mwai Kibaki’s declaration of victory. Kenya suffered a crisis which degenerated into ethnic violence as tribal differences spiraled out of control. Homes and businesses were destroyed, mainly by gangs of youths, leading to about 1,200 deaths and 600,000 internally displaced people. Slums and low-income residential areas were impacted the most.

Jamii Bora is the largest MFI in Kenya. Many of their clients live in the Kibera and Mathare slums of Nairobi - two of Africa’s largest slums, with 1.2 million and 800,000 residents respectively. The slums are divided along tribal lines, making certain groups more vulnerable to attacks when clashes occur. Jamii Bora’s clients were heavily affected by the post-election violence. Nine months later, many of them are still in the process of reconstructing their lives. This article provides an update on Jamii Bora’s operations and how it has been dealing with the effects of the crisis.

Living in the slums

While the post-election crisis further destabilized the day-to-day lives of Jamii Bora’s clients and spotlighted their precarious living conditions, conflict is no stranger to them. It is common for landlords to evict tenants without warning and resistance can be met aggressively. Most families share one crammed room from which they may also run their microbusiness. Fires can break out and spread easily, as only thin walls separate neighboring homes.

Helping clients to save

Wilson Maina grew up in Mathare sharing a small room with his mother and siblings. Out of hunger and frustration, he began stealing at 15 years old.  He was jailed several times. When he saw some former women beggars start their own microbusinesses and generate enough income to support their families, he became interested in Jamii Bora. “The culture of saving was new to me. I was told, you must save with us, then we will give you a loan, and give you twice your savings. The first time I saved  US$20, and was given US$40. So far I have borrowed 18 times. Right now I have a US$2,000 loan,” says Maina who runs a jewelry-making microbusiness.

Founded by Ingrid Munro with a group of 50 beggars in 1999, Jamii Bora (which means "Good Families" in Swahili) now has 180,000 clients, 87 branches, and 140 outlets across Kenya. “You can reach them and get them out of poverty the right way,” explains Munro emphatically. She attributes Jamii Bora’s success at reaching extremely poor clients to the time they spend getting to understand them and gain their trust before they become clients. Every bank branch Jamii Bora opens is in a slum or poor neighborhood, ensuring that they serve the poorest.

From the beginning, Jamii Bora has placed huge emphasis on helping clients to save. Their products have evolved as they've grown to meet the increasingly complex client needs. Products include group-based savings, school fees, agriculture, microbusiness, asset and housing loans, health and life insurance, and other social services.

Responding to the post-election crisis

About 50% of Jamii Bora’s clients were affected by the crisis following the December 2007 elections. “The only reason I could go outside to buy food and collect water is because I speak nine languages -- they couldn’t tell which tribe I belonged to,” says Kadidi, a Jamii Bora client. During this period, many businesses and homes were burned, looted, and destroyed. Businesses suffered severe losses as customers were either confined indoors or displaced. Some internally displaced people have yet to return to their homes. 

Keeping clients

When violence broke out, it became unsafe for loan officers to visit their clients’ microbusinesses and follow up on loan repayments. Several clients say that after being displaced, they could have disappeared and defaulted on their loans. Rather, they chose to stay and informed Jamii Bora of their new whereabouts. “They (clients) knew Jamii Bora had products they could benefit from even though they were not in a position to repay their loans on time because of the crisis,” explains Susan Saiyorri, Jamii Bora’s national outreach manager.

Setting up a disaster fund

After the post-election crisis, those affected were able to avail of Jamii Bora's disaster fund, which was first introduced in response to a violent eruption following the establishment of a new government in 2002. Slum residents were predominantly affected in the 2002 crisis as well. Jamii Bora soon realized that this fund could be used for other disasters faced by clients. They expanded the fund to encompass flood and fire disasters.

Today clients contribute a one-time amount of US$ 1, followed by monthly contributions of US$0.20.  Approximately US$300 is credited into a client's savings account to borrow against if they are affected by a disaster. Non-clients get up to US$60 if they join Jamii Bora after a disaster has hit.

Health insurance

Many clients injured during the post-election crisis benefited from the health insurance product. Clients pay less than US$1 a week to get coverage for themselves and up to four children. Treatment is available at all Jamii Bora’s partner hospitals across Kenya. If a client needs immediate care and is close to a partner hospital, they can seek treatment elsewhere, and have their expenses reimbursed.

Forging strategic partnerships

The institution's success in reaching extremely poor clients has attracted unique partnerships. Jamii Bora is now one of the distribution centers for the World Food Programme. After the crisis, they distributed 11,000 blankets, 2,500 mattresses, 3,000 metric tones of food, and clothing to those affected.

The muncipal government and donors collaborated with Jamii Bora to rebuild the ravaged Toi market, a microentrepreneur market which had 1,774 traders before the crisis. The partnership has resulted in 2,563 new market stalls for displaced clients to restart their businesses.

Engaging youth

“Even the youth who triggered violence can now come and start businesses at this market so they do not remain in that state of unemployment which causes them to be violent,” explains Andrew Otieno, branch manager of Jamii Bora Kibera branch.

Jamii Bora is making special efforts to reach out to unemployed youth by offering them start-up business loans - something they feel will help alleviate youth crime - a widespread phenomenon in the slums.

Rescheduling loans

Jamii Bora had to reschedule many loans and disburse new loans to enable clients to pay back old ones and restart businesses. Their portfolio outstanding was KSh 387 million (US$7,740,000) at the end of 2007. In February 2008 alone, new loans totaling KSh 40 million (US$ 800,000) were disbursed.

Though the post-election crisis created a significant challenge for Jamii Bora and its clients, it served to strengthen the institution’s commitment to its clients. While many financial institutions denied new loans to internally displaced people, Jamii Bora continues to attract and serve the poorest of the poor - those disqualified by other institutions.