Many banks and financial institutions are falling over themselves to lend money to chamas. In fact chama banking is the new vogue in banks; many of them coming up with goodies to entice a chama like yours to join them. However, though the loans are easily available and approved in a jiffy, there is a catch. The interest rates. Some of them tend to be very high and it can get upto 18 percent or more. Thus, you have to keep a hawk eye on this.
A place where you can get loans at a low interest rate of only 8 percent is the Women Enterprise Fund (WEF). This is a fund set up by the government to lend to women, women groups and women-led businesses in Kenya. The good news is, you can access this loan with simple security requirements that include: group guarantees, household items, business stock and quoted shares and can get upto Ksh.500,000. However, keep in mind that at Jamii Bora Bank, this loan does not target individuals but it is specifically for chamas. Thus, you must be in a chama to access this loan. Besides Jamii Bora bank, this money is being dispersed through other banks as well including Co-op bank, K-rep bank, Family Bank and others.
Jamii Bora Bank Chief Executive Officer, Sam Kimani said that the new credit line supports the bank’s vision to become the country’s main microfinance institution. “Loans will be available to qualifying women at all Jamii Bora outlets across the country under acceptable security arrangements,” he said. The Women fund’s CEO Samuel Wainaina said that Jamii Bora had been allocated a larger portion of cash out of their 105 partners because of the Institution’s outreach and deep commitment to helping women at the bottom of the pyramid.
“We are giving Jamii Bora a banker loan of Sh200 million at a one percent interest rate for three years and the bank will retail that money in the form of loans to Kenyan women at eight percent interest,” he said. Applicants seeking funding under the loan scheme will qualify depending on their needs, repayment ability and collateral, he said. The bank will be able to loan out a minimum of Sh500 and a maximum of Sh500,000 Wainaina said.
The Women’s fund was established through the promulgation of (women enterprise fund regulations) under section 25 & 32 of the government Financial Management ACT, 2005, Legal Notice no.147 dated 3rd August 2007. It targets Kenyan women aged 18 years and above, who may be organized in registered groups. The fund receives 100 percent financial support from the government of Kenya. The beauty about this loan is that there is a long grace period of 3 months. This period starts to run from the date the group receives the cheque from the bank. Also, the Women’s fund supports capacity- building of the beneficiaries and their institutions. Other value adding services will be rolled out later like facilitation of marketing of products and services and linkages with large companies.
Certainly, the Women’s Fund is a good place to start when it comes to taking loans for your Chama, their terms are quite friendly and the interest rates – just god sent. Take a stroll to any of the banks offering this amazing product and scoop the Women’s Fund today.
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