Microloans

Partnering with Kithoka area business and community leaders who screen applicants and administer the program, MichiKen has established an innovative microloan program in Kithoka.  The target loan applicants are small businesses with the potential to grow over time and add employees.  MichiKen microloans vary in size from $US 500 (50,000 Kenyan Shillings) to $2,500 with the expectation that the loans will be repaid in two years at a 0% interest rate. Prevailing interest rates in the Meru area for business loans are 10% per month or higher, making it cost-prohibitive to take out business loans.  Our experience during the first five years of the microloan program has been very positive. Recycling money into the loan pool after it is repaid, through 2020 we have loaned over $30,000 with a default rate of less than 2%.

Our experience after the Covid years has not been as good. Covid has caused huge, lasting economic problems in Kenya, resulting in much job loss. As a result, many loan payments have been missed during 2022, 2023, and 2024. We have suspended further loaning until the situation stabilizes and the outstanding loans are repaid.