Serving Smallholder Farmers

JULY, 2011 - Given its strong interest in extending financial services in rural areas and its significant experience in Management Information Systems (MIS) and Mobile-banking (M-banking), Triple Jump Advisory Services entered into a partnership with the Kenyan microfinance institute (MFI) Juhudi Kilimo in early 2011 to prepare the foundations for Juhudi’s expansion.

Unlike many MFIs in Kenya that focus on urban markets, Juhudi Kilimo Company Limited was created to meet the financial needs of rural smallholder farmers and enterprises. Using innovative, agriculture-based, micro-asset loan products, the MFI helps over 8400 rural clients acquire productive assets such as dairy cows, chickens and irrigation equipment. It has a unique focus on the entire agribusiness value chain, from the production of raw materials to the processing and delivery of finished products. Juhudi Kilimo was initially a part of K-Rep Development Network (KDN) and was spun off into a separate company in April 2009.

Juhudi Kilimo has a dynamic leadership and a proven track record with their agricultural loan products, which are easily replicable. As of June 2011, Juhudi Kilimo had a gross loan portfolio of over US $ 1,35 million, a network of 7 rural branches, and is poised to have over 10,000 active clients by the end of year, with a PAR>30 of 2%.

With a strong focus on agricultural lending, hardly any competition in much of rural Kenya and a high unmet demand for agricultural finance, Juhudi is positioned to rapidly expand its operations and become a leading model microfinance institution in lending to smallholder agribusinesses. Recent technological developments in Kenya – a new nation-wide fiber optic cable that is revolutionizing connectivity and the unprecedented success of Mpesa, the mobile money transfer system – offer a remarkable opportunity for Juhudi to enhance its efficiency and financial sustainability, provide greater value to its clients and boost client numbers.

Triple Jump Advisory Services is helping to lay the groundwork for Juhudi’s expansion. As a first step, Triple Jump Advisory Services brought in an experienced consultant to evaluate the MFI’s current MIS, explore possible M-banking integration, and determine the institution’s future MIS needs. The evaluation included recommendations on how to improve customer service and operational efficiency as a first step to moving into the next phase of offering a mobile banking channel. Other areas of attention were: enhancing the web interface to enable branches to access more functions, and customizing and implementing mobile payment interfaces to support repayments and disbursements through M-banking. Juhudi Kilimo has to venture into the high demand, convenient and rapidly expanding mobile finance service so it can provide rapid and convenient services to clients residing in rural and peri-urban areas, who spend enormous amounts of money and time travelling to and from Juhudi’s offices for loan repayment or disbursements. M-banking has already demonstrated the positive impact it has on people’s lives, especially among rural populations.

Triple Jump Advisory Services looks forward to supporting Juhudi Kilimo in implementing the recommendations from our first grant, namely focusing on completing the MIS customization, launching an M-banking channel, and creating a strategic IT plan – all with the aim of helping Juhudi Kilimo attain their goal of improving the lives of nearly 125,000 Kenyans in rural areas by 2015.