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Financier Banks on the Poor

Fadumo Alin’s organisation is grounded on provision of credit to low-income women and youths


Fadumo Alin is an agent of change; a transformative leader with a mission to transform the lives of ordinary Somali. She provides the much needed financial assistance to a lot that has virtually been forgotten. The chairwoman and pioneer of Kaaba Micro-finance epitomises the enduring spirit of vision led leadership that is clearly required to move the larger Somalia nation from war into social and economic prosperity And she is truly a busy woman; one who is in demand. When we first met, she had a conference to attend at Safari Park Hotel in Nairobi for half a day, then a meeting with prospective investors in the afternoon.

The next day, she was on a flight to Mogadishu then to Somaliland. All her schedules were about how to provide access to capital and support to vulnerable groups. That was the basis for the formation of Kaaba Microfinance. She explains: “Kaaba Micro-finance was started in 1997 as Doses of Hope Foundation (DHF). We started Doses of Hope Foundation in the Netherlands.”

The idea, she says, was born out of the initiative of a group of Somali women living in the Netherlands. Oneyear later, a local group incorporated an office in Somaliland. This new office had its separate board of directors, but took up the name Doses of Hope. Come 1999, Kaaba Micro-finance was established as a financial service provider, whose aim was to strengthen the economic base of the poor, low-income women and youth in Somaliland through loans and savings services.

The financial situation of most low income earners in Somaliland in 1999 was precarious. Job opportunities were nearly non-existent and business opportunities were out of reach for them.

From then until this day, Kaaba has offered and increased access to financial services to over 14,000 people who would otherwise witness difficulty in obtaining credit. When Kaaba started off, it was a micro-credit project (not institution) with 150 clients.

Operating with the vision of seeing women and the youth enjoying financial independence, the Kaaba Micro-finance has offered business loans, personal loans and business advice.

The organisation does not just give the loans; it gets involved at a near personal level with the clients and their businesses.

“If we realise that there is little or no growth in the business of a person we financed, we take it upon us to find out exactly what is wrong with the product or service of the client,” says Fadumo.

This intimate knowledge of its clients, its resilience and its determination, saw the micro-credit project rise and transform to become the microfinance institution that it is today. The organisation is clear about its targeted clientele. “The services that we offer as a micro-finance institution have positively changed the lives of farmers, livestock keepers, fishermen, young men, young women, and women who own SMEs. These are our main clients and targeted groups. We are here for low income earners who for one reason or the other, do not have access to formal banking services.” What makes micro-finances like Kaaba important is that majority of people have no access to banking services, and even where they have information about banking services, the conditions for lending and engaging with the banks is too tedious and frustrating.

Kaaba Micro-finance Institution grew from a 150-client project to a fully fledged micro-finance institution in about eight years.

After 2007, the institution (after becoming a fully fledged microfinance) changed its vision to that of becoming a bank in 8-10 years or if possible, in a shorter period. With a current repayment rate of 98 per cent, the goal of turning into a bank is easily attainable.

The impact of the institution can be felt at business centres in Somaliland and in households. From 2010 to 2014 alone, the institution has advanced loans to 5,558 clients. Out of this number, 80 per cent were women.

Fadumo considers support to women as the greatest feat of Kaaba.

“Finance given to women, however little, creates virtuous spirals of economic empowerment that can cover the homefront and business end,” she notes. According to her, channeling credit to households through women increases the chances of family investment and improves the welfare of the family, while at the same time reducing their vulnerability. Fadumo wants to see her organisation supporting more women to meet their vision of empowering women and giving them a voice with the family and the society. With Fadumo at the helm, the organisation has taken important steps towards realising that vision.

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