K-Rep Development Agency (“KDA”) is the leading microfinance development organization in Kenya. Recently KDA developed an innovative approach to asset-financing that enables small scale enterprises to acquire assets, such as bee hives, water irrigation pumps, fishing gear and mini agro-processing machinery needed for increased productivity. An advantage of asset-financing compared to conventional loans is that it costs less to administer. KDA can therefore offer its asset-financing clients lower interest rates; combining this with longer repayment periods and staggered payments that fit into the production cycle, the asset financing product becomes an attractive solution for many farmers.

Realizing that poor microenterprises need not only access to finance, but also increased knowledge and skills, KDA forms partnerships with organizations that provide business development and extension services to the same clients. In this way, a comprehensive package of services is provided, maximizing the impact of each intervention.

Last but not least, KDA is committed to developing local capacity among existing savings groups and financial service associations to deliver and manage asset-financing programs. In this way KDA also contributes to creating institutional capacity for asset-financing, ensuring sustainable access to such capital to an increasing amount of low-income Kenyans.

The Grassroots Business Initiative is currently providing patient capital of up to $100,000 for up to five years to finance the new asset-finance product. GBI has also provided grants to fund technical assistance for upgrading KDA’s management information system (MIS), build capacity, and implement a monitoring and evaluation system.

GBI is considering funding the expansion of this asset-financing program to cover additional assets (e.g., cooling equipment for dairy sector) and new geographical areas (central and coastal areas).

For more information, visit: www.k-rep.org