25 May 2007: ISS Today: Kenya: Human Rights Via Bank Loans?

25 May 2007: Kenya: Human Rights Via Bank Loans?

 

A report early this month in the East African Standard dealt with a recent decision by Kenya’s Equity Bank to launch a KShs3 billion (US$42.8 million) project to fund the building of kiosks in Nairobi. It is impossible to live in that city for any length of time without witnessing a raid on these small shops by the City Council’s rungu-wielding askaris, whose goal is to demolish these structures, which are very often illegally constructed on road reserves, footpaths or any open space close to a residential neighborhood. 

 

The city’s beautification programme drives this campaign of destruction, but the askari’s bulldozer crashing into the kiosk’s planks of timber and corrugated iron sheets is also one of the better maintained colonial legacies.  A decades-long lack of property rights, and onerous, politically motivated zoning regulations, under the colonial and postcolonial regimes has forced modestly capitalised entrepreneurs to set up businesses illegally.  But their quest for prosperity has mostly been met by the weight of the rungu on unprotected backs.  In the rare occasion when such incidents make it to the evening news broadcast, Kenya’s human rights groups reliably provide the necessary outraged sound-bite on the need for city authorities to observe the rights of the kiosk owners.  Yet never in the history of the bulldozer`s uneven victory over the kiosk has this noble appeal succeeded.  Now, however, the country’s fastest growing bank’s decision to supply loans to finance as much as seventy-five percent of the construction and stocking of kiosks may be a turning point.  The only collateral needed will be a licence from the City Council, which also regards the loan programme as a way of reducing demolitions.  This is part of a trend in which informal businesses are being embraced by a banking sector that has ceased being a lender solely to the government treasury and now ardently seeks private customers to maintain profitability.  

 

This latest move by Equity Bank is part of an increasing awareness that the majority of Kenyans receive few services from the corporate sector. Until recently, the corporate strategist has regarded eighty percent of the country to have little demand except perhaps for agricultural goods and foodstuffs.  Yet when Equity decided to serve this majority, it soon had the largest number of depositors and among the highest profit margins in the industry.  The ‘poor’, it appears, are not the mass of indistinguishable misery and want that the many poverty entrepreneurs among the aid and development set utilises in its funding campaigns.  Businesses that have embraced Kenyans of modest means have reaped large profits and helped transform the lives of their customers.  Mobile telephones for example, which have been a prominent part of this trend, have been central to strengthening democratic participation and in transforming the lot of the small farmer and business person. 

 

The kiosk owners will not need telling how important they are; it is the formal sector that is playing catch up.  The little kiosk with its single cigarettes and bars of soap, where you can get credit till month’s end and that collects messages for you, moves seventy-five percent of retail goods in the country.  The askari’s rungu will now be a lot more hesitant to land on the back of an Equity customer.

 

Martin Kimani, ISS/ICPAT, Addis Ababa