The Bank of Lalmba

Moses Okech Awino is a happy man! And why shouldn't he be? He has an enviable life!  In spite of living in one of the poorest parts of Kenya, he has a healthy family with 3 thriving children who are all in school,  he is a successful businessman, and he owns a nice home built from the profits of his small business.  

Moses started his business in 2008 with a $500 microfinance loan from Lalmba. Initially, he opened a shop selling basic automotive parts (oil filters, inner tubes, etc.) mainly for motor bikes, a very popular and cheap form of transportation in Kenya. Now, 5 years later, he sells a wide array of useful things from padlocks, to batteries, to shock absorbers and timing chains, and is even planning to grow his enterprise to become the first motorcycle distributor in town!  Moses is a success story.   He's among a growing number of Lalmba's microloan recipients who have pulled themselves out of poverty.  It's amazing what one can accomplish with a very small loan and a good idea.  After all, isn't that just how Lalmba started 50 years ago? 

Remember that Lalmba is a very small organization, serving the poor in the most remote communities, communities that even behemoth NGOs and GOs rarely reach. Note also that for the past 50 years Lalmba's primary focus has been providing quality health care for the poor, especially for orphan children who have no one else to care for them.  It is only since 1998 that we expanded our services  into the realm of microfinance. We've started slowly, but the evidence is clear that microloans can change people's lives in the most dramatic of ways. 

Ready to be surprised?  Listen to these numbers and tell me that microfinance isn't the most economical way to end poverty in the developing world!

Here are the facts:  In 15 years, Lalmba has invested a minuscule $8,000 in microfinance! And with that money, 338 people have received loans, an average of 23 people per year, with loans ranging from $100 to $500 per person. What's astounding is that every one of the loan recipients has repaid 100% of his or her loan! Seriously, we've had not a single loan defaulter.  Why not, you ask? Well, there are a number of factors, the main one being that we carefully select entrepeneurs with sound ideas who know the needs of their community. We also work with community leaders and other small business owners to provide classes on starting and running a business.  Lastly, there is a lot of community support (and pressure) for the loans to be repaid, because the people know that when the loan is repaid, that money can be reloaned out to someone else.  This is why our microfinance budget has remained so low. It's really $8000 per year, but it's same $8000 per year that was initially invested 15 years ago!

Meet more of the successful entrepreneurs from Matoso, Kenya. Here's Joseph Odhiambo.

For $235, Joseph, a trained tailor, bought a sewing machine and fabrics and started his business making custom clothes, specializing in men's suits.   3 years into his business, he now has 3 machines and 2 full-time employees, and in the evening he uses his shop as a school to train more people in the craft of tailoring. Several of his former students have even opened their own businesses in nearby towns. Oh, and he also has two cows! 

And then there's Jane Adhiambo Kausi.  As you can see, Jane has a produce stand selling fresh fruits and vegetables.

What you can't see is that she also has a taxi service. With her $350 loan from Lalmba, she bought her first supply of produce, and also put a down payment on a motorcycle, commonly used to taxi people from place to place. 

Motorcycles are very popular here because many of the roads are impassable to large vehicles, and the ubiquitous "piki-piki" can go anywhere. Where do you think Jane goes when she needs a new part for her motorcycle? You guessed it, she sees Moses! You see how this works. 

Matoso, Kenya - Taxi drivers waiting for patients at the Lalmba clinic. 

Sadly, Jane is also a widow caring for 6 young children, but she's making ends meet because of her 2 small businesses. 

She shares the profits from her taxi service with her hired motorcycle driver,  and with her small savings she has repaid her Lalmba loan.  In the future she plans to buy another piki-piki to grow her taxi service.  

Samuel Ojunju, a carpenter, received his loan in 2002. With it he bought lumber and all the hand tools necessary to start a business. Today, he has a successful furniture-making business and he employs 3 apprentices to learn the skill of carpentry. Just recently he built a workshop, which allows him to work inside year-round. Before then his work was done under a tree in front of his house, and during the rainy season he was often hampered by rain buffeting down on his work. He hopes someday to buy a generator and electric tools, which will allow him to increase his production.

Stay with me, I have just a couple more people I want you to meet!  Their faces are so kind and illustrate such pure happiness, that I cannot end this post until you meet them.

Here's Jacob Okech -- can you guess his trade? Yup, he's a welder, and a darn good one. See those green metal doors in the background? He made them and the rest of the building as well! He also makes security windows and horse-drawn carts, and anything else that needs building or mending. But when he received his loan from Lalmba, it was not for welding tools. His goal was to start a business simply recharging car batteries . . . for people who don't even own cars!  I know, you're wondering how a battery recharging business could be lucrative, and why would we make such a foolish loan. Well, in this area most houses don't have access to electricity, and most people can't afford a small generator or the fuel it takes to run it. So to run their lights, radios, televisions, etc. they buy a car battery and when fully charged it can provide several days' worth of electricity for people who would otherwise be living in the dark.
As you can see, Jacob's business justification made perfect sense, and soon it became profitable. This allowed him to expand into the arena of welding, which is now his main business. The demand for his products have become so high that he has hired 2 full-time employees to keep up with the work.

Lastly, Fred Nyakwa's business idea is a noble one. He has 14 employees who have the honor and challenge of enriching the minds of 241 secondary students. Fred is the headmaster and owner of the Othura Academy, a private school, and a profit-seeking endeavor. Fred built the school with money saved from working as a teacher in the government school system for many years. During his tenure as a teacher, he had dreams of opening his own school so that he could boost the standards of education and better prepare his students for the critical examinations they are required to take each year. Students need to pass these exams in order to advance to the next grade level.  Fred unfortunately ran out of money before construction of the school was complete, but he qualified for a small Lalmba loan, which allowed him to put the final touches on the buildings, and add desks and chairs for every child.  3 years later, his classrooms are full, and there is a demand from the community that he expand the school to add more students.   What a testimony to the quality of education Fred and the Othura teachers are providing!

That's only 6 of the 338 people that the Bank of Lalmba has helped. But it's not enough! There are well over 100,000 people living below the poverty line in the areas we serve.  Not all of them are going to be entrepreneurs, but we've seen how microloans can empower not only the recipient, but those he or she employs.

Our microloan program is just getting started. Our health care and orphan programs are a vital part of our mission and our purpose in Africa, but they are costly programs and consume the majority of our budget.   With our microfinance program, even relatively small donations can help us extend an opportunity to another bright, poor person with big dreams...all with a little loan and a good idea.