MICROCAPITAL BRIEF: Kenyan Microfinance Institutions Struggle After Drought, Economic Crisis and 2008 Post-Election Violence

Kenyan microfinance institutions (MFI) are struggling to recover from a two-year slump caused by severe drought, the global financial crisis and post-election violence.

“Most of MFIs’ members are in the rural areas where their main economic activity is farming which was hit hard by the drought,” said Ms Lydiah Koros, Chairperson of the Association of Microfinance Institutions (AMFI), an umbrella body for Kenyan MFIs. Due to the drought and post-election violence, many Kenyan MFIs have been faced with mass default and forced to write off significant portions of their loan portfolios.

Moreover, the global financial crisis has decreased the flow of donor funding, forcing MFIs to obtain loans from commercial banks at higher rates.

By: Stefanie Rubin, Research Assistant

About the Association of Microfinance Institutions (AMFI):

AMFI presently has 41 member institutions serving more than 4,000,000 poor and middle class families with financial services throughout Kenya. AMFI is an umbrella organization for Kenyan microfinance institutions (MFIs), which was established in 1999 in order to strengthen Kenyan MFIs’ lobbying efforts with respect to government policy formation and to aid local MFIs in networking with other local and international organizations.

Additional Resources:

Source Article: Business Daily Africa: “MFIs Still Reeling From the Effects of Post-Election Violence, Drought” http://www.businessdailyafrica.com/-/539552/853096/-/item/0/-/hiits0/-/index.html

MicroCapital Universe: AMFI: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Association+of+Microfinance+Institutions+of+Kenya+%28AMFIK%29

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