Financial Inclusion for Rural Microenterprises (FIRM)

U.S. Presidential Initiatives:
Feed the Future
Global Climate Change
Power Africa

Funding Level:
US $18 million

Duration:
January 2011 – December 2015

Activity Goals:

  • Expand access to affordable financial services for excluded and marginalized businesses, entrepreneurs and individuals throughout Kenya, particularly in rural areas
  • Promote economic growth and contribute to USAID Kenya’s Feed-the-Future goal by sustainably reducing poverty and hunger

Activity Accomplishments:

  • Established over 125 partnerships with local institutions in agriculture, clean/renewable energy and water finance
  • Helped facilitate and unlock approximately $500 million in local commercial capital for ordinary Kenyans

Activity Locations:
Nationwide, through its network of partners

Key Partners:
National Economic and Social Council, National Treasury, National Bank of Kenya, and:

  • Banks
  • Deposit-taking microfinance institutions
  • NGO microfinance institutions
  • Savings and Credit Cooperative Organizations (SACCOs)
  • Industry associations
  • National Treasury
  • Central Bank of Kenya
  • National Economic and Social Council

ACTIVITY OVERVIEW

Financial Inclusion for Rural Microenterprises (FIRM) is a financial services project that works in agriculture, clean/renewable energy and policy reform.

FIRM facilitates the expansion of financial services and investment for entrepreneurs and businesses by designing profitable and sustainable financial services models that enable long-term economic growth necessary to improve livelihoods and build resiliency. FIRM utilizes Development Credit Authority (DCA) loan guarantees, technical assistance and consulting to de-risk credit processes used by financial and non-financial institutions across current market segments and new business opportunities.

FIRM also supports key policy reforms critical to the ongoing safe and sound evolution of the financial sector. It capitalizes on opportunities that advance the frontier of financial services into, for example, water, health, and education, in order to benefit marginalized and excluded populations across Kenyan society, including women and youth.

To achieve these objectives, FIRM works in partnership with and supports a wide variety of commercial actors in the financial services industry, Government of Kenya agencies and stakeholders, associations, donors, business service providers, and consultants.

ACTIVITY AREAS

FIRM offers customized consulting solutions to a wide variety of Kenyan partners, including the private sector and the government of Kenya. For the private sector, the project enters into a partnership agreement (a contract) with non-disclosures, confidentiality agreements and specific deliverables tied to measureable outcomes. From there, FIRM generally works on strategy first and then supports operationalizing those strategies which often leads to specific product development.

As strategies produce quantifiable results for the partner, FIRM is often called upon to help upgrade internal systems and business functions (governance, human resource management, management information systems/information and communications technology, accounting/finance, treasury, etc.), to raise additional capital or to source U.S. government loan guarantees to keep pace with growth in new clientele, income and profitability.

With the Government of Kenya, FIRM responds to specific needs upon their request, drawing upon a deep pool of highly-qualified Kenyan and international experts. In support of devolution, FIRM encourages economic investment and development of Kenya’s newly-formed county governments to create the conditions for increased investment in Kenya’s critical agriculture and finance value chains.

FIRM also supports the underdeveloped renewable energy sub-sector under the U.S Presidential Power Africa Initiative. To do so, the activity works through a growing array of financial services providers that includes banks, microfinance institutions, Savings and Credit Cooperative Organizations, financial service associations, community-based organizations and water boards.

ACTIVITY IMPACT

Solar Investments Yield Income for Rural Women

The Kenya Women Finance Trust (KWFT), through the assistance of Financial Inclusion for Rural Microenterprises, is piloting a program that provides loans for investment in energy renewable products. The KWFT is promoting a system that uses solar panels to charge a LED home-lighting system that has plugs for charging cell phones. They are piloting the program in Karatina, Nyeri County, but plan to expand to other regions of the country. The KWFT is dedicated to serving women, with a focus on rural areas.
 
The pilot program is dependent on renewable energy ambassadors. Ambassadors, generally from women's groups (chamas), purchase the lighting system and take a short educational course so they are able to explain the merits of the system. They receive commission based on what they sell.

Anne Muthoni, a member of the Genesis women's group, is a renewable energy ambassador who has nothing but praise for the solar powered lighting system "I have saved a lot of money since I started using the solar light. Previously I used to use kerosene and costs kept rising and sometimes it would finish even before I go to bed."  Muthoni has sold and installed 13 solar lamps. "I am enjoying the benefits so much that I am planning to take a loan from the chama and buy my mother one."


USAID Contacts:
Benson Kimithi, Activity Manager
USAID Kenya
Agriculture, Business and Environment Office
Tel: +254 208 622 432
Email: bkimithi@usaid.gov

Financial Inclusion for Rural Microenterprises Contact:
Mark Rostal, Chief of Party
Financial Inclusion for Rural Microenterprises
Tel:  +254 707 918 665
Email: mark_rostal@dai.com

Website:  
www.kenyafirm.org

Updated January 2014

Last updated: April 14, 2014

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