By Kioko Nyamasyo

In 2020, 21% of small businesses in Kenya had shut down due to ravages of COVID-19. The remaining 79% were operating on varying degree depending on the impact of COVID-19 to their area and type of business, according to a report by MicroSave Consulting.

Most affected small businesses were located in Nairobi and Mombasa as government had imposed total lockdown as well as dusk to dawn curfew. Schools were also closed at that time and rural areas that had institutions of higher learning were affected. One of the areas is Kitere where Rongo University is located.

“The institution has over 7,000 students and staff and this has greatly helped us grow economically as a community. Almost every business in this area depends on the availability of students,” Michael Owiti, a business owner in Kitere said.

“I own hostels which I rent to students and when the institution is closed the rooms become vacant.”

However, the situation worsened last year, he says, adding: ‘No one was prepared for Corona we woke up one day to the news that the president had closed schools, all my hostels became vacant and it was a real struggle for months because I was servicing loans,’ he explains further.

Owiti is among many residents of Kitere who continue experiencing the effects of COVID-19. Almost every household in Kitere depends on Rongo University either directly or indirectly. There are residents who work at the institution. Some residents are farmers and sell their produce to the university or students living at hostels. The community has also built rentals for Rongo staff members and the students as well as small businesses where they sell goods and services to Rongo University fraternity.

Last year, many local banks were wary of giving out loans to people. Even those who got the loans it was a challenge to repay back the loans on time.

“Before COVID-19, there were some local banks who could advance us loans to boost our small businesses, but at the start of pandemic the banks started demanding conditions we could not meet,”Jackline Atieno says.

“I had been taking loan from a local bank for five years but last year when I went to apply for a new loan, they said I should provide a payslip.”

As she was not formally employed, she was not able to get a loan to finance her business. “Those who had existing loans were affected the most, with the university closed, every business literally came to a standstill,” she says.

“The banks did not understand the situation and some auctioned our properties, they could even come and take away your roof.”

Some members of Kinda Gi Tich Table Banking Group

It was due to those hardships that Jackline and other community members started table banking. “We decided to start our own table banking group so we can help each other rebuild during and post pandemic,” she says.

They started Kinda Gi Tich table banking group. She explains, “We as women were most affected by the closure of the university since most of us are not formally employed. We wanted a table banking group for women but then realized we would be excluding other people just like the banks had excluded us. For that reason, we opened our membership to anyone over 18 years old.”

The table banking group currently has 16 active members and they meet monthly. “Each member contributes between KSh 330 and KSh 2500 every month, the money you contribute determines how much you can borrow,” Jackline says.

“You can borrow up to triple your savings, for example, if you have contributed KSh 10,000 in total then you can borrow up to KSh 30,000.’

Unlike banks, the members can easily access the loans from the table banking group. As long as the member is saving monthly, they automatically qualify for a loan.

Charles Odhiambo Okeyo, a member, says, “I lost my job during COVID-19 but this table banking group saved me. I was able to take a loan of KSh 20,000 and start chicken farming which is really doing well and I am now planning to take another loan to build a house.”

Geoffrey Okuku together with Esther Chege from FODEP

Hellen Adhiambo also praises the group by saying, “I could not qualify for a bank loan before but with our own table banking group, I can access short term loans to boost my business.”

In agreement, Mary Aoko adds, “The good thing about this table banking group is that you can get emergency funds without a lot of paperwork. When my children are sent home for school fees I can come to our group and get a loan for them to pay school fees.”


Hellen Adhiambo

The table banking group has also revived businesses that had closed down because of the pandemic, Geoffrey Okuku, cooking gas seller, is such a beneficiary.

“While most students buy cooking gas on cash, most community members buy on credit,” he says. “It is easier to stay afloat when the university is open but when the institution was momentarily shut down, I was left without any operating capital.”

He adds that banks could not give him advance credit and were it not for the table banking group, he would have closed his business permanently.

However challenges remain. Jackline notes that at times, about ten memberfs can request for Kshs 20,000 loan each yet they have only contributed Ksh 330 each as members.

‘To help on that we have partnered with a microfinance called Fostering Development Empowerment Programme (FODEP),’ Atieno explains.

FODEP gives them loans based on their savings which should be repaid in a period between 12 months and 16 months at an interest rate of 8.5%. The microfinance also advances them short term loans repayable in three months at the same interest rate.

Members follow proceedings of table banking

Okuku is optimistic that their table banking group will grow and, in a few years, will not be dependent on a microfinance. According to him, this will greatly reduce risks and interest rates.

While 8.5% rate seems reasonable, it is not calculated for the whole repayment period but rather monthly. For example, if you take a loan of KSh 20,000 to be repaid in three months, you will pay an interest rate of Ksh 1500 every month. In total you will pay back KSh 24,500 which is a 22.5% interest rate.

Charles Okeyo on the high interest rate says, ‘the interest rates are quite high than those offered by banks but the repayment time is flexible and you do not live-in fear that someone will come and take away your roof.’

High interest rate is not the only challenge that affects Kinda Gi Tich banking group, Atieno explains, “When someone takes a loan from our partner FODEP, every member becomes a guarantor and if that person does not pay, we all have to contribute to repay the loan. We started the table banking group because of our limited finances and when you have to repay someone else’s loan it becomes very challenging.”