November 16, 2011
Microloan empowers Kenyan woman
At age 13, Karen was left to care for her siblings, with virtually no source of income. But a microfinance loan through World Vision enabled Karen to pursue her dream of opening her own used-clothing business.
“Growing up as a child was not smooth sailing,” recalls Karen Aluoch, Kenyan mother of two.
“My parents were extremely poor,” she says. “I remember mother selling kale by the roadside, and I would run up to her after school and help her tie five leaves together to make a bunch.”
Tragically, death took Karen’s mother away in 1994. A year later, her father followed.
“I was totally devastated. I was only 13,” she says, struggling to fight back tears.
With only $28, Karen, her siblings, and some extended relatives relocated to a one-room structure. But Karen would not settle for merely surviving hand-to-mouth. She wanted to start a small business.
However, with no savings, she lacked the start-up capital.
So she applied for and received a $130 microloan through World Vision, which she used to buy her first batch of second-hand clothes.
“I started small and devoted all my energy to the business,” says Karen.
Empowering people to work their way out of poverty
Microfinance provides financial services to entrepreneurs like Karen who struggle with poverty, and thus have no collateral, credit history, or access to traditional lending services. In many countries, women have a particularly hard time securing loans.
World Vision donors provide these peer-to-peer loans. As the entrepreneurs repay the loan, the original donation is recycled, and then another entrepreneur receives a loan for his or her business.
Loan amounts range from $25 to $5,000, and the average microfinance loan cycle is 3 to 12 months. Loans are repaid at stunning rate of 98.7 percent.
‘Without this loan, I would have had nothing’
Before long, Karen’s business was flourishing. She sells a variety of clothes and fabric items, including bed sheets, curtains, household items, baby clothes, and adult clothes. Her clients are generally women and re-sellers who travel as far 300 miles to her market, the third-largest second-hand clothing market in Kenya.
She paid off the original loan and has since secured almost $17,500 in additional loans, which she used to expand her business, build rental houses, and educate her siblings. She is no stranger to foreign countries like China and India, where she travels to restock her clothing store.
“Through this loan, I have built my two grandmothers and my uncle a decent house and installed water in their homes,” she says. “My siblings have all completed school; some are in institutions of higher learning, while others will soon be.”
Karen reflects on how her work — and World Vision’s assistance — has changed her. “Doing this business means a lot to me,” she says. “Without this loan, I would have had nothing.”
Read more about World Vision Micro, our global microfinance program.
Two ways you can help
Pray for families struggling to survive in tough economic times like these. Pray that microfinance programs would help many more hardworking people who simply need a helping hand to lift themselves out of poverty, like Karen.
Make a regular investment in hard-working entrepreneurs by becoming a MicroMonthly donor. Each month, you’ll be connected with a new entrepreneur so that you can follow their progress and watch their families thrive and grow with your help.