Aleke Dondo

Organization: 
Juhudi Kilimo
Year founded: 
2004
Country: 
Kenya

Juhudi Kilimo provides micro-loans and micro-insurance for productive, income generating assets for small-scale farmers in Kenya.

Focus: Rural Development, Financial Inclusion
Geographic Area of Impact: East Africa
Model: Social Business
Number of Direct Beneficiaries: 7,500 (2011)
Recognition: Regional Social Entrepreneur of the Year, Africa, 2011

Background
In sub-Saharan Africa, 60 to 75% of people are employed in agriculture, mostly as subsistence small-scale farmers. In Kenya 63% of those small-scale farmers live below the poverty line, and many of them have little or no access to financing to invest in their businesses. In Kenya microfinance reaches only 18% of the population and most of the micro-loans are for working capital, such as seeds or fertilizer. Micro-loans for working capital, in contrast to loans that allow borrowers to acquire assets such as farm machinery or cows, have a lower multiplier effect on income generation.

Innovation and Activities
Juhudi Kilimo begins working with prospective borrowers nearly six months in advance to provide financial literacy training and animal husbandry assistance. This serves the dual purposes of facilitating the borrowers’ future success, and screening and selecting borrowers with the perseverance and commitment to be reliable clients.

In addition to offering loans for rural farmers to invest in productive assets such as cows, agricultural equipment and transport, Juhudi Kilimo offers compulsory asset insurance and life insurance to the borrower at a small cost (approximately 5% of the loan). These two insurance products ensure that the borrower and his/her family cannot become further indebted by the loan, mitigating the risks the rural poor often face when becoming clients of many micro-lending institutions.

Juhudi Kilimo has provided asset financing to over 7,500 small-holder farmers, roughly half of which are women. In 2010 it financed the purchase of 1,834 cows that produced on average 20 litres per day. At an average price of Ksh 20/litre, farmers earn Ksh 22 million (US$ 275) more per month, doubling or tripling their income.

With the increased income of small-scale farmers comes improved health, education and other indicators, representing a positive social impact. Investing in agricultural assets through Juhudi Kilimo provides a double bottom line for private sector investors.

The Entrepreneur
Aleke Dondo, considered the “Grandfather of Microfinance in East Africa”, built Juhudi Kilimo from two of his strongest passions: microfinance and rural development. He holds a Master’s degree in Economics from York University in Toronto. Dondo has carried out more than 30 major studies in the field of small enterprise and microfinance development, and has published 10 research papers on these subjects.