KADET currently applies two methodologies, unique to Micro finance institutions, in its bid to offer economic and social solutions to mostly rural micro-entrepreneurs.
This entails the formation of groups by people with a common purpose of accessing financial services. It is a minimalist approach of providing credit and financial services to the small and micro entrepreneurs. For KADET, a group consists of 15 to 30 entrepreneurs. Upon establishing the possibility of working with the group based on the set criteria, e.g. their cohesiveness, commitment to group rules and KADET rules, they are trained for eight weeks after which they are eligible for individual loans within the group under the co-guarantee mechanism.
A methodology is designed for individual clients who want to access specific products such as the asset acquisition (Jenga Mali) and Water for the Community (Maji Kwa Jamii). The loan is guaranteed by the asset acquired.
The Solidarity Lending Methodology
This entails the formation of groups by people with a common purpose of accessing financial services. It is a minimalist approach of providing credit and financial services to the small and micro entrepreneurs. For KADET, a group consists of 15 to 30 entrepreneurs. Upon establishing the possibility of working with the group based on the set criteria, e.g. their cohesiveness, commitment to group rules and KADET rules, they are trained for eight weeks after which they are eligible for individual loans within the group under the co-guarantee mechanism.
The Individual Lending Methodology
This methodology is designed for individual clients who want to access specific products such as the asset acquisition (Jenga Mali) and Water for the Community (Maji Kwa Jamii). The loan is guaranteed by the asset acquired.
MPESA DISBURSEMENT
This is the disbursement of loans to clients through the Safaricom MPESA platform. This mode of loan disbursement has the following benefits:-
- Security: M-PESA provides unbanked mobile phone users with a secure platform to store their money. Both the banked as well as unbanked customers of M-PESA use it because it is easily accessible. With M-PESA, there is no need to carry cash and hence the risk of the cash getting lost or stolen is minimized.
- Convenience: The M-PESA service is accessible 24X7 and money can be sent any time, anywhere. It is also a speedy way of sending money.
- Cost cutting: Mobile technology can lower the cost of remittances as it removes the need for physical points of presence and ensures a timely and secure method of transaction. There are many more agents of M-Pesa than banks which means that the customers need not travel long distances to withdraw cash.
KADET has the following micro finance loans:
Agricultural Loan “Mkopo Shambani”
Mkopo Shambani is a loan product designed for farmers who trade in small-scale agricultural produce. The farmers include those in horticulture and in subsistence farming who have a ready market for their produce. KADET has designed a lending structure that accommodates balloon payments upon disbursements. This approach allows time for the farm produce cycle to end. The customer repays the entire loan upon the sale of his/her produce.
Business Assets Acquisition loan (Jenga Mali)
KADET recognizes the need amongst micro entrepreneurs to acquire business assets i.e. deep freezers, weighing machines, business pay-phones etc. With this product therefore, KADET offers an opportunity to the customers to acquire essential business assets in an easy way saving them the trouble of looking for other financiers. For KADET, the asset acquired by the customer becomes a viable security for the loan.
Mkopo Biashara (Business Loan)
This loan product targets business people seeking additional business capital to inject into their businesses for expansion or diversification. Key beneficiaries of this product are businesses that have been in existence for a minimum of 6 months and are able to repay monthly installments based on cash flow.
School Fees Loan “Somesha Loan”
This loan product is designed for existing customers. This product provides solutions to the school fees need prevalent in many families The product is thus meant to create more value to KADET customers since it is given in addition to the customers’ existing loans.