Microcredit Project

1. Coopération Nord-Sud Microcredit Project

2. Microcredit Project Who is running the project Coopération Nord-Sud Progressive Volunteers Progressive Volunteers (PV) is a community based organization founded in 2007 to meet the critical needs of young people in Ruaraka and the surrounding communities of Kasarani District of Nairobi County. PV is dedicated to creating comprehensive long solutions that give young people in high risk environment real alternatives to poverty and violence. Coopération Nord-Sud Coopération Nord-Sud(CNS) is a platform to set-up partnerships between the North and the South. The charity’s goal is the international co-operation for the social, environmental and economic development: a development that must be participatory, fair, solidaristic and sustainable. Our partner organisations live in the communities of the beneficiaries, and therefore they know their problems and the possible solutions. CNS chooses its partners and, in co-operation with them, develops the projects; it is also the guarantor of the good use of the raised funds and of the employed resources. For this purpose, an internal auditor will monitor our and our partners’ activities to guarantee their fairness. The mantra of “give it away” creates completely inappropriate incentives, leading to patronage and dependency, instead of self-sufficency and entrepreneurship (Martin Fisher, co-founder of Kick-Start)

3. Microcredit Project Project background Coopération Nord-Sud What is Microcredit? Micro-credit describes the concept of small loans in favour of people who do not have sufficient guarantees to reimburse the credit received and who are accordingly excluded from the official banking system. These loans are granted to the poorest of the poor, so that they can purchase the necessary tools or stock to start a micro-business and hence escape their poverty. The loans aim at financing business not consumption, and therefore micro-credit does not create financial dependency. Moreover, the credits’ reimbursements produce new loans within the same community, thus contributing to co-operation and solidarity among their members. In fact, micro-credit is based on trust; and loans are granted for development projects. Therefore, a strong local presence is essential in order to select the most promising projects and to help the micro-entrepreneurs to succeed in their activities. This co-operation, that stresses mutual aid and local organization, contributes also to the success of future projects. Therefore, micro-credit can be considered as a temporary aid to beneficiaries to help on their turn their community to come out of poverty. .

4. Microcredit Project Project Justification Coopération Nord-Sud Current situation The social context in the slums is ideal to develop micro-credit for the following reasons: Most of slums’ dwellers do not have the necessary economic resources to start a business activity; Banks do not grant credit to the slums’ dwellers because they do not have sufficient guarantees; In the slums the community links are very strong, and therefore communities are themselves the guarantors for micro-credit. Our intent Micro-credit reduces directly poverty, and it provides the young beneficiaries with a renewed social dignity. Therefore, Coopération Nord-Sud wants to increase the fund managed by PV in order to grant loans to more beneficiaries. “If you go out into the real world, you cannot miss seeing that the poor are poor not because they are untrained or illiterate but because they cannot retain the returns of their labor. They have no control over capital, and it is the ability to control capital that gives people the power to rise out of poverty.” (Muhammad Yunus , Founder of Grameen Bank)

5. Microcredit Project Achievements Coopération Nord-Sud • In the last two years, PV has successfully implemented various micro-credit projects:

6. Microcredit Project Methodology Coopération Nord-Sud • Methodology • Communicate to the potential beneficiaries • Carry out the orientation and make beneficiaries clearly understand the terms and conditions which includes; • Funds are soft loans and not a grant • Funds must be repaid within the 3 months for small size and 6 months for medium projects • Proper business accounts/books must maintained • Attend training before the funds are issued • Must be needy with a great potential to pay back and be in groups of 5 people • Time Schedule 1st Month 2nd Month 3rd Month 4th Month • Multi session orientation and training • Fund realised to beneficiaries • First repayment • Beginning of repayments on weekly basis • Weekly repayments • Monitoring • Last repayment and loan closure • Final project evaluation

7. Microcredit Project Methodology Coopération Nord-Sud • Rates applied and repayments amount* • Sustainability and monitoring • A weekly cash flow tool MUST be filled in before the businesses are funded • Project  plans for individual projects and cash flow documents are sent from PV to CNS before the funds are released to beneficiaries in order to approve it • Monthly bank statements is scanned by PV and sent to CNS in the first week of every month • *Please note that the discount rate applied by Kenyan Central Bank is 24% and the current inflation rate in Kenya is ranging between 18% and 19%

8. Microcredit Project Plans for the future Coopération Nord-Sud • Next steps • PV and CNS decided together to start with the funding of little micro-credits (150 euro max.). • The aim is to tailor and enhance the delivery of the credit cycle and monitoring tools. This will enable to start to fund bigger projects with all the requested experience and the necessary wisdom to have a positive impact on the whole beneficiary community. • The analysis of bigger projects has already started • The loan repayments and the availability of new funds will permit to enlarge the size of loans in a sustainable way with a balanced impact on the Ruaraka community

9. Microcredit Project Contacts Coopération Nord-Sud Progressive Volunteers seeks kind support, be it financial or logistical to enable it pursue this noble course. The team made of experienced personnel in various disciplines of life fosters to see this as one of its own kind in the city of Nairobi. P.O Box 21579-00500. Nairobi, Kenya Tel +254 20 2668268/2630015 +254 721 774820. Email: volunteers.p@gmail.com/info@progressivevolunteers.or.ke Web sitewww.progressivevolunteers.or.ke/ Email: info@cns-asbl.org Web site http://www.cns-asbl.org/ Coopération Nord-Sud