Juhudi Kilimo: Changing the way smallholder farmers do business
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Juhudi Kilimo is changing the way farmers do business. Our clients are smallholder farmers in very rural communities across Kenya, in dire need of services but overlooked by traditional microfinance. We finance productive, income-producing agricultural assets, from high-yield dairy cows and other livestock to irrigation equipment and greenhouses. We target assets that can produce income for farmers, food for the family, and local inputs and employment for the community.
Building on farmers' strengths, we provide market-driven services that give farmers access to the tools they need to scale up and succeed. We maximize our impact through partnerships, extensive business and agricultural training, insurance products, and existing farming groups that co-guarantee and support eachother.
About You
About You
First Name
Nat
Last Name
Robinson
http://twitter.com/#!/juhudikilimo
Facebook Profile
About Your Organization
Organization Name
Juhudi Kilimo
Organization Website
Organization Phone
+254 715 446614
Organization Address
Mucai Road
Organization Country
Kenya, NA
Country where this project is creating social impact
Kenya, NA
Is your organization a
For‐profit
How long has your organization been operating?
More than 5 years
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Innovation
Entry Form title
Juhudi Kilimo: Changing the way smallholder farmers do business
What change do you want to bring to the world?
Juhudi Kilimo is changing the way farmers do business. Our clients are smallholder farmers in very rural communities across Kenya, in dire need of services but overlooked by traditional microfinance. We finance productive, income-producing agricultural assets, from high-yield dairy cows and other livestock to irrigation equipment and greenhouses. We target assets that can produce income for farmers, food for the family, and local inputs and employment for the community.
Building on farmers' strengths, we provide market-driven services that give farmers access to the tools they need to scale up and succeed. We maximize our impact through partnerships, extensive business and agricultural training, insurance products, and existing farming groups that co-guarantee and support eachother.
What are the primary activities of your project?
Juhudi Kilimo’s approach to alleviating poverty and driving rural economies is direct and comprehensive. We finance specific agricultural assets that offer sustainable income for smallholder farmers and create local engines of…. The majority of our loans have been for high-yield dairy cows and goats but we also finance other livestock, agro-processing and irrigation equipment, greenhouses, and transport for agricultural goods. The size and duration of a loan is adjusted for each client. The type of asset is determined by the client’s business goals and in response to local markets.
Prior to each loan, microfinance officers visit the client’s farm to assess the business and advise on improvements. The first meetings of a new group are then devoted to training clients on basic finance and business. After a loan is approved officers give continued support, working with partners and local government ministries to offer targeted technical assistance on assets.
Juhudi’s clients support each other through solidarity loan groups, and co-guarantee their loans through a Watano, a sub-section of five members of the group. Led by client representatives, groups are independent but get strong support and oversight from loan officers. Loan groups serve many purposes: a central meeting place for farmers to share ideas and encouragement, a place to learn about new products and services, and a forum to organize for access to better pricing and markets.
To further protect clients, Juhudi provides business insurance for many assets and credit life insurance is required. All our insurance products, including an optional medical aid plan, can be financed along with the asset so that the impact to the client is optimal.
What is innovative about your initiative? How is it a new contribution to the field?
Traditional microfinance has had limited impact on smallholder farmers in Kenya. Collateral requirements, generalized products and services, and sheer distance significantly limit its reach. Our primary innovation has been to adapt financial services to specifically serve our clients, these smallholder farmers.
Through partnerships and financing, we provide access to assets that create income and also improve agricultural efficiency. This leads not only to increased living standards but provides for loan repayment and collateral in case of default. To further protect farmers and allow for business growth, we worked with an insurance provider to develop livestock and other insurance products that had not been previously available.
Most of the assets we finance also provide supplemental food for family consumption and both inputs and employment within the community. A farmer with a high-yield dairy cow producing over 20 liters a day, for example, can reserve several liters for home use and then sell the remainder locally to generate enough income for loan repayments and other household expenses.
What stage is your project in?
Operating for more than 5 years
Tell us about the community that you engage? eg. economic conditions, political structures, norms and values, demographic trends, history, and experience with engagement efforts.
Juhudi Kilimo focuses on very rural areas. A majority of these farmers (63%) and their families live below the poverty line and 76% subsist on less than 330 Kshs ($4) a day. Farmers are the backbone of the Kenyan economy but their families often live without adequate food or then income needed to cover educational and medical costs.
Agricultural production in Kenya overall is mostly geared for export, similarly depriving communities of the local economy and outputs need to grow. Equipped with the right tools though, these farms can be scaled to succeed as businesses.
Kenya's unemployment rate stands at 40%, most of whom are youths who constitute 60% of Kenya's estimated population of 40 million. Young Kenyans face such limited opportunity in rural areas that they often shift in large numbers to urban centers.
Juhudi has targeted very rural areas to create real opportunities for business growth and employment. In each new region into which we've expanded, we have begun by targeting areas that are removed from urban centers and have a sufficient concentration of small-scale farmers who lack access to other financial services. We then work very closely, with area chiefs and other local leaders to build relationships within the community, and with self-help groups and local suppliers. New staff speak local dialects and are recruited both locally and from the head office.
Share the story of the founder and what inspired the founder to start this project
Over the last two decades, Aleke Dondo has worked to develop programs to aid Kenya’s rural smallholder farmers and micro-entrepreneurs. His concentration has been to launch and manage rural microfinance organizations and develop small enterprises. Added to this has been an academic perspective derived from over 30 major studies and ten published research papers in the fields of small enterprise and microfinance development.
Through those experiences, he saw in Juhudi Kilimo and its model of asset financing tremendous potential for wide impact. The majority of Kenyans are engaged in agriculture yet productivity is low and less than 10% of the national budget is directed towards it. Kenya is not feeding itself and we face recurrent draught and other weather issues. He saw that targeted agricultural assets and training could increase incomes and food production. He also recognized the need within microfinance. Rural smallholder farmers were in dire need of financial services and were not being reached. Juhudi’s model answered both these challenges in a way that could be work throughout Kenya and eventually East Africa as a whole.
In addition to Juhudi Kilimo, Aleke has been integral in creating several social enterprises from the Fahida Project, which uses a microfinance model to empower low-income people affected by HIV/AIDS, to Makao Mashinani, which provides financing for low-income people to acquire decent housing. He holds a Master’s Degree in economics from York University in Toronto
Social Impact
This Entry is about (Issues)
Please describe how your project has been successful and how that success is measured
Juhudi has financed over 7,000 smallholder farmers to attain productive assets and currently has 3,609 active borrowers. Many are clients could not have accessed financial services elsewhere. Half of our clients are women, who specifically benefit from our loan requirements. Many smallholder farmers don’t own their land or other major assets, which are often required for financing, and this is especially true of our women clients. We require only a 15% refundable deposit and a commitment to the group to co-guarantee each other’s loans. Our most recent most repayment rate was 97%, well above the average in East Africa and a significant indicator of our success at preventing over-indebtedness.
Most of the assets we finance not only produce an income but also supplemental food for family consumption and inputs and employment within the community. A farmer with a high-yield dairy cow producing over 20 liters a day, for example, can reserve several liters for home use and then sell the remainder locally. This added milk consumption has an important impact on overall family health but particularly for children.
In 2010, Juhudi financed 1834 cows that together produce an average total of 36,680 liters per day. At an average price of 20 Kshs per liter, these farmers are earning an added 22 million Kshs ($275,000) per month. These smallholder farmers are also generally able to provide employment as their businesses grow and improve overall market conditions with increased production of inputs.
Our close partners have aided us in further evaluating our impact. The Grassroots Business Fund assessed our Social Return on Investment at $47:$1: each dollar invested in Juhudi generates $47 in value for its beneficiaries. This was calculated by estimating the net income to the farmers generated from the financed assets, the productive life of that asset, and the number of borrowers.
A Cerise SPI evaluation, completed in cooperation with Kiva Microfunds, measured our overall social impact. Juhudi’s greatest strengths proved to be how we target the poor and excluded and adapt our services to meet their needs. We are currently in the process of completing the beta GIIRS assessment.
To broaden how we measure our social impact, we are beginning to collect more individual data on each client. A significant challenge for us, however, is physically reaching each farmer in remote rural areas. To address this, we’ve developed a tool to allow us to track food production and sales, complete the Grameen Foundation Progress Out Of Poverty Index assessment, and get feedback on our services directly via mobile phones. This will allow us to constantly evaluate our impact on farmers’ incomes and respond to their business needs.
How many people have been impacted by your project?
1,001- 10,000
How many people could be impacted by your project in the next three years?
More than 10,000
How will your project evolve over the next three years?
Over the next three years, Juhudi is expected to grow to 30-50,000 active clients and have a total impact on 250,000 Kenyans in the rural areas (based on average Kenyan family size). The goal of our expansion is to sustainably increase the incomes of smallholder farmers by changing the way they do business. Through this expansion, however, we expect to have a proportionate social impact that will fundamentally change the lives of our clients and their communities.
Our next step is to create a path for farmers to grow into next-stage agribusinesses and larger rural enterprises. By financing milk chilling plants and agricultural processing equipment, we’re building that path to profitable, sustainable commercial operations for Juhudi and its clients.
Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?
Even in its pilot phase, Juhudi Kilimo struggled to meet the demand for asset financing from Kenyan farmers and in turn to obtain the funding we needed to grow. The need for consistent funding and a desire to grow led Juhudi to transition from a non-profit organization to an independent for-profit company. To secure sufficient funding, we continue to be persistent, transparent, responsive, and willing to share information as much as possible.
As an agricultural organization, we always face the possibility of extreme weather, especially drought. Agricultural challenges have been met in partnership with insurance providers to develop livestock and other asset and business insurance products that protect Juhudi and our clients.
Poor infrastructure is a challenge and political instability could be again. Juhudi, however, withstood the political violence after the elections in 2008, which caused the displacement of clients and staff and a degree of general default. We found that our groups became a resource for reconciliation and restructuring. To further reduce the potential risk to
Juhudi and our clients, in future we are working with our insurance provider to offer political violence coverage.
To reduce the burden of travel on our officers and clients in these very remote areas with limited infrastructure, Juhudi is implementing mobile technology to collect payments and feedback. Innovative technology also helps us attract and retain quality staff.
Tell us about your partnerships
Partnership has been integral to Juhudi's success and ability to serve our clients. K-Rep Development Agency (KDA) piloted the Juhudi as a project and continues to be a close partner for new ideas, support, staff, and product development. K-Rep Bank and The K-Rep Group are the primary owners of Juhudi Kilimo. The Acumen Fund, along with Grameen Foundation, recently made a substantial investment in Juhudi's growth. Kiva Microfunds has likewise provided significant funding through person-to-person lending.
The Grassroots Business Fund was an early funder and capacity-building grant provider. Swiss Contact provides capacity building grants and training. BrazAfric is an agricultural technology distributor for some of the assets Juhudi finances and a source of innovative new products. Our insurance partner CIC has worked with us to develop and provide agricultural insurance and a credit life and medical aid program.
Current annual budget of project, in US dollars
$500,001‐1 million
Explain your selections
Juhudi’s source of income is loan interest and application fees from clients, which cover our operating expenses. We are able to grow and scale our services through funding from social and commercial investors and occasional capacity building grants.
How do you plan to strengthen your project in the next three years?
Juhudi Kilimo is well-poised to scale to other regions within Kenya and across East Africa. Though a much larger market exists, Juhudi has expanded in a measured and systematic manner. Along with new funding in 2011, Juhudi will now first expand within existing Juhudi loan groups and regions. There is great potential to grow organically based on current demand. Beyond increasing our depth in Rift Valley, Central District, and Nyanza, we plan to then open regional offices in other areas of Kenya.
Throughout the last year, we diversified the types of assets we fund and through partnerships we are always introducing new products to expand opportunities for our clients. Our close partnership with the K-Rep Development Agency further allows us to link Juhudi clients and groups into the agro-business value chain as a whole, from milk chilling plants to larger-scale agro-processing.
Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.
PRIMARY
Lack of visibility and investment
SECONDARY
Lack of skills/training
TERTIARY
Restricted access to new markets
Please describe how your innovation specifically tackles the barriers listed above.
The primary barrier we address is a need for targeted financing for smallholder farmers who can create employment for themselves along with others in the community as they scale their business. Business and agricultural training ensures sustainable and productive use of financed assets. Groups are then able to work together, in partnership with Juhudi, to gain access to new markets and better pricing and further develop from small farms to larger agri-businesses.
Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.
PRIMARY
Grown geographic reach: Within host country
SECONDARY
Enhanced existing impact through addition of complementary services
TERTIARY
Leveraged technology
Please describe which of your growth activities are current or planned for the immediate future.
Juhudi is expected to double its portfolio in 2011 and scale to 50,000-100,000 clients in the next five years. Our primary growth will be within each loan group and region in which we already operate and then throughout other regions of Kenya. Our model applies equally well throughout East Africa and offers best practices for smallholder farmers around the world.
As we grow our portfolio we also continue to diversify the assets we finance and scale our services to include financing for farming enterprises to grow into larger agri-businesses and provide links to new markets from small farms.
We are also exploring new technology, for farmers and also for our staff, to increase their impact and efficiency.
Do you collaborate with any of the following: (Check all that apply)
Government, Technology providers, NGOs/Nonprofits, For profit companies.
If yes, how have these collaborations helped your innovation to succeed?
- KDA and K-Rep Bank originated the Juhudi model and continue to be a source of support and partnership.
- The Ministries of Livestock and Agriculture, along with various NGOs, have provided training on agricultural assets.
- SwissContact and Grassroots Business Fund have supported Juhudi to grow from its non-profit pilot phase through its transition to a for-profit enterprise.
- mSwali is a technology company that has partnered with Juhudi to provide SMS and voice based client communication and analytics.
 | 38 weeks agoRavi Saxena said: Hi Nat, I saw a similar program going on in India that entered into this competition, thought you might want to check it out and maybe ... about this Competition Entry. - read more > |
| 49 weeks agoNat Robinson said: Thank you so much for taking the time to review our entry, Abdoul. We're passionate about our business and we're always looking for new ... about this Competition Entry. - read more > |
| 49 weeks agoNat Robinson updated this Competition Entry. |
| 50 weeks agoAbdoul sy said: very good project backed up by solid data that proves it is on the way of success. the inovation is there as well with the financing of ... about this Competition Entry. - read more > |
| 54 weeks agoNat Robinson updated this Competition Entry. |
| 60 weeks agoNat Robinson submitted this idea. |
