Key Metrics
18,340
SACCO members
KES 224m
in savings
4.7%
current SACCO loan default rate
Impact
Through our Financial Services program, we are significantly increasing financial inclusion in Kenya’s informal settlements, enabling people to save for school fees, business startups and growth, and personal emergencies.
The SHOFCO SACCO is the only savings and credit institution in Kenya serving communities in informal settlements across the country, including Kibera (HQ), Mathare, Kawangware, Kariobangi, Mombasa, and Kakamega. We focus on serving marginalized groups including women, young people, Persons with Disabilities (PWDs) and refugees, who represent the most disadvantaged individuals when it comes to financial inclusivity. By December 2023, the SACCO had grown to over 19,000 members and disbursed more than KES 1 billion in loans.
Situation
Residents of informal settlements in Kenya lack access to fair markets, public services, and civic representation, trapping them in survival mode. Income inequality is also extreme, particularly affecting women. Traditional banks and financial institutions have barriers to access, such as high fees and prohibitive loan requirements, further exacerbating the financial hardships that marginalized communities face.
Strategies
Our Financial Services program was established in 2015, motivated by a vision for sustainable development in Kibera and a desire to reduce community dependency on SHOFCO. The SHOFCO SACCO officially began operations in March 2016 in Kibera’s Gatwekera village. In 2018, its by-laws were amended to expand membership, allowing community members from the informal settlements to join and benefit from the initiative. Today, we are focused on three key strategies:
- We provide a variety of financial products, with a specific focus on women and young people, through SHOFCO SACCO, the first community-based savings and credit institution aimed at supporting the informal economy.
- SHOFCO SACCO’s products are tailored to meet the unique needs of marginalized communities in informal settlements, including women, young people, Persons with Disabilities (PWDs), and refugees, as well as Shariah-compliant products targeting Islamic youth. The products tailored for young people come with competitive rates and a shortened waiting period and require limited collateral or guarantor requirements.
- Youth members of SHOFCO SACCO have the option to enroll in a 6-week Financial Literacy Course. The course provides guidance on how to open accounts, save with the SACCO, and meet eligibility requirements to access youth loan products.
- We provide financial support and capacity-building training to scale climate-focused community-based organizations.
Outcomes
- Access to essential financial services is expanded, breaking the cycle of poverty in informal settlements.
- Individuals and communities are empowered to achieve economic stability and independence through sustainable financial solutions.
- Financial inclusion is increased, ensuring that financial services are accessible and sustainable.
What the Future Holds
We are focused on expanding our offering of youth-friendly products and services with competitive offerings and incentives to attract young people to increase their loan uptake and grow their businesses exponentially.
