In Kenya, the microfinance sector has come of age. The industry has grown exponentially over the years with some microfinance institutions evolving into fully fledged banks. Demand for microfinance products remains strong especially among small and medium enterprises (SMEs) as well as majority of people at the base of the pyramid.
“Many people around the country remain unbanked, a gap that calls for a depth of financial services to address,” says Peter Macharia, managing director at Jijenge Credit Limited. Kenya has only 43 banks that are expected to serve 40 million people. With regard to that, Macharia feels there is a great opportunity to lend, the reason why Jijenge Credit was founded.
It is worth noting that many people remain locked out of accessing financial services due to lack of awareness. “In the financial sector, only a few Kenyans patronize their products.” Therefore industry players including microfinance institutions (MFIs), savings and credit cooperative societies (Saccos), insurance companies and banks should endevour to create awareness to ensure increased uptake of their products.
Headquartered in Nairobi, Kenya, Jijenge Credit Limited is a non-deposit taking microfinance lending institution. It was established in early 2014 with a focus of providing financial support to individuals and businesses on flexible terms.
Range of credit facilities
Jijenge offers a variety of credit facilities at competitive interest rates to its customers.
To start with is loan against logbooks. The product is designed to enable clients derive maximum value from their motor vehicles. The logbook acts as the collateral. “The loan is disbursed within one hour,” observes Macharia.
It also provides check off loans where a loan is given against your salary and deductions done directly. No securities, guarantors or account opening is required. Rates are negotiable and flexible depending on the risk profile of every client.
Additionally, Jijenge provides school fee emergency loan that is aimed at meeting all the school fees needs of its clients. The product also extends to other educational courses such as driving school and short courses.
Other credit facilities include import duty finance, LPO financing, issuance of performance bonds and bid bonds, loans against shares, cheque discounting, invoice discounting, loans against rental income.
Unique service delivery
What differentiates Jijenge from other financial institutions is that it has unique service delivery. “Our turnaround time is short as we are able to process some loans within one hour,” avers Macharia.
Besides, the company has different payment methods such as M-pesa cash and cheque. Most remarkably, it serves customers at the comfort of their offices by delivering cash to their bank accounts. “Our main focus is to offer unique and special services to our clients.”
So far, Jijenge has been able to serve customers outside Nairobi. “We have entered into different contractual agreements with various service providers who are able to service our customers in different parts of the country,” he reveals.
Having worked in the banking sector for over 20 years, the managing director has good knowledge of the industry, customer needs as well as expectations. He hires and trains graduates from local universities in order to equip them with the required skills to drive the organization.
Despite its successes, Macharia mentions that competition is a major challenge in the industry. While the microfinance sector has a lot of potential for growth, it is evident that the mainstream banks have moved to serve people who were initially served by the MFIs.
Currently, the company is developing a mobile banking system that will help serve customers at any part of the country. Today, mobile banking has made finance more accessible and quicker on a larger scale. That has been made possible by the massive uptake of mobile phones by people even at the bottom of the pyramid.
Commenting about interest rate capping, Macharia says the move is good for the country. Most MFIs borrow from banks thus they will be able to transfer the benefits to their customers.
Going forward, he plans to increase the company’s customer base and transform Jijenge into a fully fledged bank in the next 10 years.