When we first set out to research and award Social Performance badges to our partners, we guessed that most partners would get one or two at the most. After all, each of these badges recognizes tremendous work, vision and time towards a goal that is not directly related to the basic premise of the organization's work - offering microloans. But we were stunned by and extremely proud of how many of our partners were fulfilling both economic and social missions to help their clients.
In this blog series, we have provided you with a lot of information about Kiva's Social Performance initiative. Here, here, and here, we explain the importance of a strong social mission and measuring the strengths and weaknesses of a microfinance organization's performance against its mission. The Social Performance Badges we have assigned to our Field Partners reflect the ways in which they have demonstrated a strong commitment to meet the needs of their clients, both in their intent and in their follow-through.
Today we will give you a behind-the-scenes look at exactly how KADET, a stellar Kenyan Field Partner, earned each of its four badges.
KADET was founded in 2000 with the mission to reduce poverty by providing financial services to small and micro-business owners. KADET's niche is in reaching remote areas underserved by the government and other service providers, and in offering unique and contextualized products and services for people living in rural areas.
Anti-Poverty Focus Badge
KADET earned the Anti-Poverty focus badge because of its outreach into poverty-stricken rural areas. While some microfinance organizations opt for the less expensive route of serving people in and around the city in which it is headquartered, KADET not only seeks out the remotest areas, but it goes so far as to conduct surveys about the level of poverty and need for financial services in potential operating areas. This quantitative information assures KADET that it is reaching people who will derive the most benefit from its services.
Entrepreneurial Support Badge
To warrant the Entrepreneurial Support badge, KADET offers three different types of loans tailored to develop production and create wealth. These include an agricultural loan for small-scale commercial farmers that has one balloon principal repayment at the end of the season, loans in amounts and terms that are practical for either micro-enterprises or small-to-medium enterprises, and individual long term loans for up to 24 months for qualified clients. To improve client capacity to make the best use of its loans, KADET provides some training on key business development concepts such as cash flow management, bookkeeping, product development, and marketing.
Family and Community Empowerment Badge
Most of KADET's clients take out group loans, which is often the most appropriate way to enter the formal financial sector. The "solidarity group" model reinforces social ties, builds client capacities and improves clients' abilities to cope with crisis. In facilitating solidarity group lending, KADET is able to penetrate more deeply to the most rural and underserved people who would not be candidates for individual loans.
KADET rather uniquely offers loans that assist an entire community in financing assets particularly useful in rural areas; water and sanitation products, solar panels and lights. Its education loan empowers clients who could not otherwise provide uninterrupted education for their children. And to accompany the loans, clients in certain areas receive special training sessions on the topics of health, HIV/AIDS, sanitation, and nutrition. These extra efforts to acknowledge a range of issues that complicate their clients' lives are what earn KADET a Family and Community Empowerment badge.
Facilitation of Savings Badge
KADET is not registered as a deposit-taking institution, but it earned a Facilitation of Savings badge because of its efforts to foster a culture of savings among its clients, a critical way to reduce vulnerability and enable debt-free investment. KADET encourages its clients to pay off more than the amount due in each loan repayment to build up savings, and as a result many have more than 20% of their loan amount in savings at a bank with which KADET has established a partnership solely for this purpose.
Field Partners that earn the Innovation badge embrace innovative and technology solutions to better address the needs of the people they serve. KADET allows loans to be paid back with money transfers using M-Pesa or partner banks, and will send money directly to a third party on behalf of clients. These systems facilitate distance banking and give users greater flexibility in financial transactions. KADET is also developing several types of micro-insurance products in-house, including livestock, agriculture, and health insurance.
Kiva is proud to support KADET in its efforts to fight poverty in Kenya. If you would like to make a loan to a KADET borrower, click here to go to KADET's lending page.
photo courtesy of CGAP