October 2021: Kenya / Kizui: KICABA MICRO-CREDIT PROGRAM


The PBF/KICABA microcredit program is one of the success stories of the people of Kitui. It has changed many life situations, “rooted” many households, fed less fortunate families, and turned many local groups into entrepreneurs.

Criteria for the identification and selection of beneficiaries.

With respect for human dignity, KICABA is guided by the principle of “the option for the poor” when granting microcredit. This means facilitating the business of micro-entrepreneurs by not charging exorbitant interest rates, as is the case with banks and other microfinance institutions; more and more people without opportunities are thus supported to take up income-generating activities. Thus, their horizons are broadened and are encouraged to realize their own potential, thus opening their horizons to realize their potential, eventually reducing poverty and adopting new innovative ways of earning money.

KICABA selects beneficiaries based on three criteria:

People must be organized in groups to receive moral and economic support, depending on the locality and the same business projects.

They should all run at least one micro-enterprise themselves to demonstrate and develop their personal entrepreneurial skills.

They should be willing to register with a microcredit and pay attention to thrift.

KICABA field staff organize meetings in the villages or visit local markets to communicate the objectives of KICABA and the practices of microcredit in order to attract new interested parties. They always examine the innovative ideas of those individuals who, however, are beset by poverty. The more “resistant”, but hardly recognized, find an opportunity and are accepted under the conditions mentioned above.



Funds are disbursed under the following provisions:

A flat 15% interest (one-time) is charged for a loan, i.e. if someone receives 10,000 KES, 1,500 KES must first be paid to KICABA as interest.

This interest is always paid before one can avail of the loan, as KICABA also runs the employment program. This means that KICABA “earns” only 15% in total, depending on the money available and the loans given.

Example: If the total amount of funds disbursed per year is KES 1.5 million, KICABA will receive KES 225,000 for it, since the repayment period for a loan is always one year.It is assumed that the money individuals receive within their group belongs to that group. Individuals are encouraged in this way to pay in small amounts each month so that the profit is lent on to other members of their group for their own circulation. This is monitored and supervised by KICABA staff. This is a working “self-help” method. Strong groups can build capital, redistribute the profit within the group so that they can become more successful in business and expand their horizons.

The success

This microcredit method is very practical and successful because it uses traditional group cohesion practices in trading and doing business.

Success Indicators:

  • This program has existed in Kitui for eighteen years.
  • Exponential growth in the business of clients contributing to household needs.
  • The number of clients who join every year and prove themselves in their own businesses.
  • The respect for human dignity shows the impact of the program within society. Unfortunately, there are also defaulting borrowers who cause additional costs.

The repaid funds are used in two main ways:

Passing on as start-up capital within the group.

Interest paid to KICABA is used for the implementation of the program: Alignment of salaries, bank fees, stationery, the printing of receipt books, fuel for the motorcycles and communication.

Staff / Volunteers

KICABA has two employees who are paid monthly. However, their salary is far below the salary levels of the Kenyan government. This means that KICABA management negotiates with the employees to accept the salary based on KICABA’s low income. Because of the lower salary, KICABA cannot hire very competent employees. They are demanding better wages.

The general costs

The program has many overhead costs. For example: Maintenance of motorcycles, follow-up on delinquent borrowers, expenses for travel and training materials, office rent, communications, printing of receipt books. In some cases, overhead costs exceed interest earned, so administration is shared from other sources.

The accounting overview of the funds provided by PBF.

The accounting period was set on an annual basis. PBF provided KICABA with an accounting format. This form summarizes the accounting by listing:

    • The name of the client
    • The amount of the credit granted 
    • The date the credit was granted, and 
    • The total amount and other payments made with the funds, including bank charges.

Patrick Kutu, Managing Director of Kicaba

Kitui, Kenya.