CBEC for Development

Owing to its significant strides in industrialization and the establishment of the Belt & Road initiative, China has demonstrated its ability and obligation to aid other developing nations, particularly small-scale farmers, in the realms of food security and poverty alleviation. Similarly, various international organizations harbor interests in these areas but often lack the efficient mechanisms and policies required to achieve their objectives. The microfinance model, initially launched in Bangladesh, has been shown to be a successful strategy in assisting small-scale farmers. Thus, it’s plausible to adopt similar mechanisms albeit with different lending institutions.

In 2013, a group of Chinese researchers had the opportunity to visit Kenya, facilitated by local liaison Mr. Wanjiku Kagira-Kargbo. Following this visit, the team allocated USD 800, which was distributed between two small-scale entrepreneurs for rabbit rearing and charcoal production. This sum was intended to be refundable, thereby allowing its reutilization by other community farmers. Management of this fund was entrusted to Ms. Wanjiku Kagira-Kargbo. However, due to the failure of one project and the rejection of another, the funds were not returned.

During a subsequent trip to the community in 2014, the team granted USD 1000 to a local farmer group known as Broad Vision, located in Kimandi, Gatanga sub-county, Kiambu County. This money was divided among eight members, with the expectation of its eventual refund. Ms. Josephine Maina, the daughter of the group leader, served as the local point of contact. Although all funded projects reportedly succeeded, the money was not reimbursed, attributed to the absence of a local manager. Further small amounts of money were later disbursed as per the community’s request. Despite these efforts, a significant challenge remained: the lack of a local manager to select beneficiaries, guide project selection and implementation, and oversee loan recovery, thus posing a threat to the sustainability of the microfinance initiative.

Addressing this issue, the team decided to collaborate with local researchers from Chuka University to carry out an experiment involving approximately USD 7100 of experimental funds. The local researchers were made responsible for selecting beneficiaries, choosing projects, and recovering loans. The funds were designated to finance a preliminary baseline survey to assess the utilization of small agricultural machinery in agricultural production. This survey was conducted among farmer groups in Chuka sub-county. The primary objective was to fund farmer groups to procure small agricultural machinery such as weeders, extractors, or processors, thereby enhancing efficiency and optimizing agricultural production. If successful, this experiment could potentially be scaled up with formal public funding. Should this model prove effective, the team may provide policy recommendations to the Chinese government and international organizations interested in promoting agriculture and reducing poverty in Africa.

Looking forward, to expand the scale of microfinance, it is suggested that the project could be financed by agricultural companies that produce agricultural inputs and machinery. This could potentially integrate the microfinance projects with the marketing of their products. Concurrently, it is essential for relevant governments to collaborate and facilitate these initiatives.