Friendly Water for the World September 2021 newsletter

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Subject: Friendly Water for the World September 2021 newsletter

September 2021 Issue

Hi Friend,

People working together is our most important resource. When we do so, all kinds of things become possible. Without it, we lack resilience, capacity for problem-solving, and our common commitments may wane.

This is true where we live, and true where Friendly Water for the World’s partners across the world live. Communities working together can expand the range of possibilities. They can reduce waterborne illnesses, mitigate the ‘long walk to water', improve sanitation, fight poverty, expand employment, protect the environment, and radically improve community well-being.

But it requires taking full advantage of the skills and initiative of all of the community’s members. Problems may be experienced individually, but demand collective solutions. One of those collective solutions is the subject of our main article this month - table banking. It's an example of how groups of people can organize and pool their money to invest in their future.

Friendly Water for the World has a collection of proven technologies. But the most important technology is social technology – how we live, work, and celebrate together, how we solve problems together, how we, together, build a better world.

And how we build hope.

We invite you all to join us on our collective journey to hope.

Tutafanya miujiza! “Together, we will make miracles!” in Kiswahili,

David Albert

Friendly Water for the World Co-Founder

Table Banking

In Kenya, women comprise about 80% of the farm labor. That is the highest percentage of any country in the world. In what are usually smallholder farms and gardens, they plow fields, sow crops, weed, and harvest, all while juggling their other domestic duties. Yet these women only hold title deeds to about 5% of the land that they work.

Without title to land and few other physical assets, they can provide no collateral against which to take out traditional bank loans. Without access to loans, they have little opportunity to start their own business, buy land, invest in their children's education, or pay for health care and other family needs.

Women are not only excluded from bank loans, they are excluded from banking altogether. Over 20% of the population does not have a bank account, and more than 2/3 of them are women. Usually, women are unbanked because they don't feel like they have enough money for a bank account and that the system isn't set up for them.

The financial exclusion and inequality women face in Kenya have given rise to a new form of investing called table banking or Chama (from the Kiswahili word for "group" or "body"). Table banking is an informal cooperative social group that forms to pool and invest savings. To understand the benefits of table banking, it's useful to understand how it works.

How does table banking work?

The first thing to know is that there are a variety of forms of table banking. What they have in common is a shared desire for opportunity and security in an environment that often makes acquiring either a challenge. Most table banking starts by forming a group of people who are close in some way; they might know each other through church or be friends living in a similar part of town.

In the case of our partner, the Matsakha Development Group (MDG), table banking was sparked through the community engagement process we started with them last year and the income generated by our shared Good Hygiene program selling Meta soap. We didn't start the table banking program, but we did help create the conditions that made it possible.

Groups can start with just about any number of members, but the more you have, the more money there is to be shared - just like every donation we receive expands our impact. Once people connect, leaders are identified, and the whole group will often sign a charter or constitution that enumerates the table banking group rules and regulations.

One or more of the group leaders will then open a group bank account. Table banking is so widespread in Kenya that most banks now offer products specifically tailored to these informal groups. The new bank account information is then shared with the group members so they can start depositing money.

Contributions are usually regulated - group members must give a certain amount of money during a certain amount of time - 200 KSh or $1.82 U.S. once a month for instance (the average Kenyan salary is about $6.40/day). There are often upper and lower limits on the contributions to ensure everyone participates and no one exerts outsized influence.

Money is typically transferred through a mobile payment app and then processed at the bank. The bank sends the account holders a confirmation which they then mark and stamp in a passbook. The passbook tracks the amount of money or "shares" that each group member has contributed.

It takes more than just people and money to make table banking work. These days you need technology to bring them together. The technology most people in Kenya use is a mobile payment app like M-Pesa.

Apps like M-Pesa enable you to deposit cash with an M-Pesa representative and then digitally transfer money from your phone to a bank account. Mobile payment apps are estimated to have helped 2% of the Kenyan population move out of poverty. MDG members use these apps to transfer their personal money to the table bank account.

How is table banking used?

Savings and Loan

Each member becomes a shareholder in their table banking group and has a vested interest in how it works and develops. Over time, the account grows to a point where members may request to take a loan. These loans require no collateral and are paid back with interest. The account acts as one part safety net and one part seed capital.

Social bonding

In general, payback rates are high as the group members know each other well, and frankly discuss how the money is going to be used. That discussion helps promote friendship and bonds the group together. The charter often includes rules that mandate participation and incur penalties for missed meetings and other actions that may weaken the group.

Inclusion

Table banking promotes both social and financial inclusion. It provides an entry point into the financial system for the unbanked, gives them compounding benefits, and provides an opportunity to learn how banking works. The importance of that knowledge is reflected in the fact that financial inclusion is a necessary target for 8 out of the 17 United Nations 2030 Sustainable Development Goals.

Vehicle out of poverty

People take loans from their table banking group for many reasons. They may want to fund an idea like sewing new clothes or making food to sell at the market. Or, if they already have a business, they may want to purchase new tools or equipment to improve it. Table banking creates financial freedom and brings to life entrepreneurialism and good ideas. Perhaps just as importantly, it right-sizes problems.

Sometimes a group member may incur an unexpected health expense or find they need more money for their child's education. By borrowing from the group, they can address the immediate need before the expense grows into something overwhelming.

Table banking in action

MDG has already deposited 16,000 KSh or $145 U.S. in the first six months of their table banking program. The group has 24 members and more will probably join (new members have to catch up on payments to ensure equality). They have a goal to reach 50,000 KSh or $454 U.S. before starting to make loans to group members.

One special feature of this MDG program is that the money that members have invested into their shared account has come directly through programs that our supporters have funded. Almost 100% of group contributions have come from selling Meta soap launched through our Good Hygiene program, and by fabricating bricks through our Better Building program (and soon by constructing rainwater catchment tanks).

In the August Essential Resources newsletter, we talked about how our work follows a Community Investment process. The MDG table banking program is the fruit of that process and a real-world example of a community investing in its own future.

Impact

180,000 women in Kenya are part of a table banking group. And that number is rising. Among them are the 11 women who have so far joined MDG. Together, all of these women and their table banking peers control more than 2.1 billion KSh or $19 million U.S.

In Kenya, we invest in women to invest in the whole country. When even only one woman is empowered, the family is empowered. And if the family is empowered, then the whole nation is empowered. If we want to improve the lives of women and the whole economy, table banking is the best way.

Vasco Omoro

Women Enterprise Fund - Kakamega, Kenya

The impact of that money touches the family first. Studies show that when women are included in the financial system and manage their own money, more of that money stays in the home; and it lasts longer. Women also tend to be values investors - they make financial decisions that they believe will benefit their entire community.

The biggest impact undoubtedly comes from including women and all people in their local and national financial systems. The social, economic, and health benefits of building something together are realized in table banking groups all over Kenya and Africa today. When we engage with a group, we learn how we can empower each other.

In Brief

>> It's one thing to read about table banking. It's another to hear from the people in our monthly Chat who are actually using it like Getry Agizah and Vosca Omoro.

>> We have broken ground on our Water Security program to build 50 rainwater catchment tanks and over 1,000,000 liters of water capacity in Kakamega, Kenya.

>> If you appreciate our work, please let us know at https://greatnonprofits.org/. Your review helps promote the work we do together.

>> Listen as Soumya Ganapathy interviews Curt Andino, our Executive Director on her Revel Revel podcast.

>> MDG, our partners in the Matsakha Good Hygiene program, have just created new labels for their Meta soap just in time for their first store-based sales

>> Our next board meeting will be held on Tuesday, September 21st at 4:30. Register here.

>> Have a question or suggestion? Send an email to will@friendlywater.org.

Please share our work and invite others to join our mission.

FRIENDLY WATER FOR THE WORLD

https://friendlywater.org

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Subject: Friendly Water for the World September 2021 newsletter