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Daily Nation : February 27th 2014
8 money enterprise Lender sows seeds for small-scale rural farmers to reap big Juhudi Kilimo has been giving rural farmers loans to buy hydrid cattle, purchase irrigation equipment to help them fight poverty farmers in Kenya, Joseph Omwega has endured numerous challenges in his business. For years on end, he had been J THE ASSETS HELP FARMERS BRING THEMSELVES OUT OF POVERTY, IMPROVE THEIR ASSET BASE AND INCREASE FOOD PRODUCTION,” Mujeni Aseli grappling with lack of information on the best agricultural practices and inadequate or no financing. Further, he used out-dated farming techniques thereby perpetually recording meagre returns. As a consequence, the 41-year- old father gave up on his search for a financier who could inject capital in his agricultural business given that many institutions demanded a title deed or car log book to get a loan. He did not have the crucial documents. As fate would have it, he came across Juhudi Kilimo during one of the firm’s outreach missions in Kisii County. Juhudi Kilimo provides agricul- ture-based, micro-asset financing products to smallholder farmers to acquire productive assets such as dairy cows, chicken and irrigation equipment. Mr Omwega enrolled imme- diately as a member through Egetonto group in 2004. Through training, the subsist- ence farmer learnt that the business he engaged in — planting maize in his family’s small piece of land — was insufficient to BY JOSHUA MASINDE @masindej firstname.lastname@example.org ust like many small-scale Thursday February 27, 2014 DAILY NATION POTENTIAL» MICRO-FINANCIER IS EYEING ABOUT 9.6 MILLION SMALLHOLDER GROWERS WHO NEED MONEY ACROSS THE COUNTRY meet his domestic needs. After sharpening his business skills, Mr Omwega’s application for Sh15,000 loan was approved. He used the money to lease two acres of land to plant more crops. He reinvested the proceeds from the newly acquired land to expand the portion of the farm he leased in subsequent seasons. He repaid his first loan in six months and acquired another one of Sh30,000 which he serviced in nine months. He also used some of the proceeds from his farming business to get married as he became hopeful of increasing income and assets, too. But tying the knot presented a fresh challenge in his life almost immediately. Personal and financial obligations increased forcing him to approach Juhudi Kilimo for Sh50,000 loan which he used to buy a dairy cow and set up its shed. Producing an average of 20 litres per day, Mr Omwega was able to repay the loan from milk sales, save some money and get enough produce for household use. Following his success in maize farming, he decided to invest in maize milling. Most of his neighbours in Suneka used to travel to Kisii town, a far location, to mill maize. He acquired a Sh100,000 loan to set up the first milling machine within his home. The location of the maize mill cut the cost, distance and time Suneka residents took to mill maize in Kisii town. At this point, Mr Omwega had transformed himself from a peasant farmer to a promising entrepreneur. Today, he owns three maize milling machines within Suneka. A farmer in Baringo County, Mr Andrew Rumenya, feeding his cattle. Juhudi Kilimo has been helping smallholder farmers in rural Kenya access loans to buy hybrid cattle and other productive assets. JARED NYATAYA | NATION His business acumen soon led him to timber trade which he acquired Sh190,000 seed capital to launch. He bought two power saws and used the balance to set up tree stands from which to sell the timber. This, he claims, was the best investment decision he has ever made. Through networking and marketing, he landed contracts to supply construction companies in the area with timber. He also started hiring his power saws, creating extra income. As his returns grew, so did his 900m AGEMENT » PATRICK WAMEYO our life experiences into an idea and exploit it experience, credibility nowledge to spur,” the place of buildund your vision. We inted out that college y education is merely at does not work by st be applied skilfully problems for which it ted, and for a degree, g real problems for ic gain.” the skilful application ool kit” while solving blem in the society ains knowledge of the are playing in, and illars of economics bute wealth through seasons. Eventually they gain the requisite credibility in the market place including with the sources of finances for growth and expansion. Take Bidco Oil Refineries story for instance. The firm has now become a regional giant is loved by wouldbe financiers. Its boss Vimal Shah and his brother Tarun were unable to obtain financing to launch their project from the local banking industry when they had not built a reputation. International Finance Corporation, a global financing partner that takes on the risks of good ideas from known and uknown people came in handy with a little start-up capital which enabled them to receive additional funding from a few local banks. Twenty nine years later, potential financiers are literally lining up at the CEO’s gate with sweet offers. That is how the world of risk management works. People who by themselves would not take and manage risk profitably will not support your appetite to take on enormous risk, particularly in an area you have no previous experience. Your only option is to start small so as to gain experience, build reputation, especially the ability to sell a biter pill to all and sundry. The ability to perceive a clear solu- tion for a problem in the society in your mind, complete with the mix of other interventions required, and un- matched desire to break every door to get whatever support you require to ignite it. No track record Once again dear readers, in the written history of success, people who have charted landmark roads to success like Henry Ford and Steve Jobs, did not follow any textbooks or templates and had no track records to draw upon. They had the tools they picked from education and experience along their life’s journey, an experience no one else had previously. — Patrick Wameyo is a financial literacy educator and coach. Email: email@example.com appetite for cash as he signed a Sh250,000 loan to buy a plot of land besides acquiring another power saw. Today, Mr Omwega is servic- ing a Sh370,000 loan. He had used the credit to acquire an electricity-powered maize milling machine, purchased two motorcycles, and set up a video hall, an alternative income stream. He also planted 5,000 seed- lings of blue gum tree in his plot of land. Mr Omwega has employed four people to provide transport using his motorcycles and also to run the milling machines. At the moment, he is plan- ning to put up an elaborate zero grazing unit and buy a truck that would transport timber and wood once his trees are mature. So far, Juhudi Kilimo, which Worth of productive assets in shillings which Juhudi Kilimo has financed in Kenya Mr Omwega attributes to his success, has financed over 22,000 small-scale farmers in rural areas with productive assets worth Sh920.2 million ($10.7 million). The farmers have maintained an average repayment rate of 95 per cent. The organisation gives loans to smallholder farmers to buy hybrid dairy cows, poultry and irrigation equipment which can act as collateral and generate income to service the credit. Increase food production The organisation is now eyeing an estimated 9.6 million rural farmers who are not able to access formal financial services. This target market covers a farmer who has access to small piece of land, earns between Sh86 ($1) and Sh344 ($4) per day and only produces in small quantities to sell into local markets, according to the organisation’s chief executive Nat Robinson. “The assets help farmers bring themselves out of poverty, improve their asset base and increase food production on the farm and for the local markets,” Mr Mujeni Aseli, Juhudi Kilimo’s chief marketing officer.
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