Table Banking

Often, smallholder farmers, micro, small and medium enterprises grapple with limited access to credit to invest in their enterprises, among other constraints. Consequently, there has been limited uptake of agricultural technologies among smallholder farmers, under-financed group Income-Generating Activities (IGAs) and slow growth of MSMEs in Kenya.

The table banking initiative was initiated by CABE to bridge the gap of credit among participating smallholder farmers and MSMEs. The main interventions were training on savings and credit scheme management, group governance and setting up of a revolving fund, from which groups could borrow and finance their IGAs or on-ward lending to individual members. Over the past three years, the project benefited 29 Self Help Groups (SHGs) with a total membership of 576 members. Each year, the groups mobilized on average €8,000 in internal savings. The revolving fund kitty stands at approximately €15000, from which groups borrow and repay at minimal cost. Three groups graduated to access credit from formal financial institutions and most of the groups now have capacity to mobilize funding from government projects and other development partners working with groups. The challenges that remain with the Table banking initiative include utilization of the borrowed funds in non-income generating activities, weak group governance and weak linkages to agricultural enterprises.

There is need to pilot other credit lines in support of MSMEs such as Soko Loans (Market day loans), School Fees Loans and Agricultural Input Booster loans, which have succeeded elsewhere.

The funding from the Buren Churches, Netherlands and CORDAID, has enable both women and youth to access finances for their businesses.

About the project

The project seeks to increase access to affordable financial services to rural people especially women and youth through micro finance and thus contribute towards poverty eradication, increased incomes, employment creation and building of wealth among the low income people in western Kenya. The innovative microfinance savings and credit scheme or ’’table-banking’’ project objective is to bridge the gap of limited access to credit and financial services by smallholder farmers and small scale entrepreneurs.

The main objectives of the Table Banking Project is to build the capacity of project beneficiaries to access credit through self-help groups which they can use to advance their income-generating activities.

Since the inception of the project to date, the project has built the capacity of 29 Self Help Groups (SHGs) with a total membership of 576 members and so far the achievements made by the project have been:

  • Formation and organization of additional self help groups-24 new groups have been formed
  • Training of groups on:

                          (i)Group dynamics;

                          (ii)Table banking and entrepreneurship;

                          (iii) Refresher training of old groups –main focus being the new rules and regulations governing

                                 the Table Banking project;

                          (iv) Group governance –focusing on constitution and by-laws to govern their activities;

                           (v) Poultry husbandry and Management as an alternative income generating activity.

  • Disbursement of €30000 as top-up funds to groups has been achieved so far.
  • Establishment of linkages with CABE’s poultry commercialization project which trained members on poultry husbandry and management.

Moving forward CABE has also come up with other loan products to cushion members from spending their enterprise loans on their pressing social needs such as education and funerals. The two are saving schemes targeting school fees and investment in agricultural inputs.We are also designing a new loan product, ‘market day’ loan (soko loan), with a shorter repayment period, of one week and hope to roll it out soon. This is meant to support SMEs who are often in need of short-term loans to invest in their business during the market day (typically once per week) and repay thereafter.