capability of reducing further degradation and enhancing sustainable financial services (Getanch, 2004).
4.4 The Main Socio-economic and Environmental Activities Supported by the CBMFOs
The CBMFOs in the rural areas of Ruiru Sub-County were vibrant organizations with social, economic and environmental undertakings. The study found out that the organizations facilitated rapid mobilization of people living in remote rural areas. This is through bringing the unorganized rural communities together. Thus, through regular meetings and financial transactions, enduring economic capital and social networks are created. Murali (2006) concurs that the ground-lending where the meetings took place encouraged people to meet frequently and at regular intervals creating cohesive bonds. The social capital that was generated within the group propelled the members to develop discipline of regular saving. The saving culture bred from regular saving which secured them a predictable source of income while enabling members the ability to rely on one another in times of need (Jeffrey, 2011). The social gains accrued from working in groups had enhanced interpersonal skills and fostered collective responsibilities. The members’ self-confidence and self-esteem had also improved.
4.4.1 Social Activities
The study gathered that the resources generated within the groups were used to support various social activities within the communities where members of CBMFOs were
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located. The social activities included MGRs and social support in times of needs. A MGR is a form of social network of mainly women who support one another. The network can be traced to the traditional SHGs of pooling resources together. The key activity was contribution of money to the members of the group on rotating system. Another form of social support among the members was contribution of money for support during weddings and initiation ceremonies, illness, funeral arrangements, and fundraising for school and college fees and hospital bills. The social activities strengthened the collective responsibilities of the group members.
Out of the sampled groups comprising 110 respondents (88 members and 22 officials), the study revealed that 91% engaged in MGR and a similar percentage in social support in times of need as shown in table 4.3. Such activities provided the members with a sense of cooperation and community feeling.
4.4.2 Economic Activities
The expansion of community based microfinance programs within the rural areas is viewed as an effective means of supporting various microenterprises. These efforts are geared towards rural development and poverty alleviation (WB 2013). Access of micro- finances by members of CBMFOs enabled them take up various economic activities. The loans were primarily, although not exclusively for IGAs such as inputs for microenterprises, purchase of seeds, fertilizers and livestock; and transport of goods to markets. Some loans covered the cost of social ceremonies such as weddings or religious festivals – events that were important in the life of community members. The smoothened
Table 4.3 Main Social Activities (Frequency Distribution) Members and Officials of CBSGs (N=110)
Responses Percent of Cases
Merry-Go-Round 100 91%
Support during initiation, weddings, illness and funerals
100 91%
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household incomes and the freedom of making economic decisions making had given the members a considerable measure of independence.
Access to microfinance services among the rural people of Kiambu County had enabled them invest in IGAs. Majority (90%) of the members indicated that their lives had changed. Some of them leased farms to engage in crop productions; some bought cows, goats and sheep; others started small shops selling food items and household items; better still, some were able to acquire motor bikes for operating as taxis. All these including casual employment in the farm lands were important IGAs that contributed to their livelihoods. These activities are indicated in Figure 4.4.
Farm activities are small-scale agricultural engagements of producing crops and livestock. Farming was the main source of income and livelihood for the respondents. It also provided much of the rural work. As the study area was characterized by low rainfall due to its semi-arid nature, respondents relied on rain-fed agriculture which determined the crops produced. Staple food covered most of the arable land. Maize was the main important crop for all the respondents. Other common crops included beans, sweet potatoes, cassava, kale, cabbage, amaranth, arrow roots and bananas. Mushrooms and
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coffee which are cash crops were least farmed. With limited rainfalls and low land productivity, community members struggled to meet their household subsistence needs. The study found out that 95% of the respondents produced crops.
Livestock production formed an important livelihood strategy for the respondents. Livestock enhanced the farmers’ subsistence under difficult situations. Animals owned by the respondents consisted of poultry, cattle, sheep and goats. These animals provided meat, milk, and eggs and were important sources of protein and micronutrients, especially for children. Goats were highly favored as they survived in regions characterized with low rainfall due to their browsing nature. Livestock plays an important role as a food source particularly in the arid and semi-arid regions where it is impossible to grow most crops (WRI, 2007). Out of the 110 respondents, 80% owned livestock.
Within the rural set-up, incomes from farm activities were just a small proportion due to small land holdings of less than half hectare and unsustainable agriculture activities (WRI, 2007). This made it less viable to earn a living only from crops with a low value per hectare. Non-farm activities provided the rural households with an alternative form of cash income. The most common was running small shops or road side kiosks that traded in cereals, groceries, household items, old and new clothes. The results indicated that 47% of the respondents ran small shops. Coffee plantations in the area provided most of the wage labour with 35% of the respondents engaging in it. Although the returns were low, it offered an alternative form of income for the low-income individuals besides farming. Respondents who ran boda boda taxis were 37%. The study gathered that boda boda taxis had become the common mode of transport in the rural areas due to its flexibility and affordability.
4.4.3 Environmental Activities
Most of the economic activities, particularly farm activities supported by CBMFOs took place within the confines of the natural environment. Environment is an important resource for the rural communities as they entirely rely on it for the provision of food,
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energy and fodder for livestock. According to Marion and Marek (2013), at least 80 per cent of the rural poor derive their needs from the natural resources. A sizeable proportion of agricultural activities occurred on fragile lands lacking appropriate soil and water conservation measures. Without managing the environmental problems emanating from the activities being carried out by the rural people, they risked threatening their livelihoods.
Sustainable agricultural practices are powerful tools to increase the incomes to the rural people. However, some farm activities impacted adversely on the environment. The manifestations of unsustainable agricultural activities were evident in the loss of soil fertility as reported by almost all the members of CBMFOs interviewed. Similarly, inappropriate use of chemicals and fertilizers, overgrazing and encroachment of forests and wetlands was evident among the communities sampled. Protecting the environment was important to the community members to help them escape the vicious cycle of low productivity. Although efforts to link CBMFOs activities with natural resource conservation were not enough, members engaged in some environmental conservation as they sought to maximize on the resource output. The importance of managing environmental risks is the benefits of triple bottom line; environmental, social and economic. Some of the environmental activities being carried out by members of CBMFOs are exemplified in Figure 4.5.
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To deal with issues of soil and water conservation problems, the respondents engaged in low-external input technologies. The study observed that CBMFOs provided rural finance services that were used for agricultural activities without necessarily addressing the impacts of these activities on the environment. The results above indicate the individual efforts of the sampled respondents. To administer conservation programs, the members engaged in the following activities: crop rotation (95%), soil conservation (27%), agro-forestry (9%), water harvesting (7%), use of manure and fertilizers (95%), use of compost and living mulch (18%), reforestation (45%), wetland management (9%) and/ control of pests and rodents (92%).
Evidently, the financial inclusion of the marginalized rural communities through CBMFOs was adding value in the incomes of the rural households. However, the institution of microfinance on its own was unlikely to lift the members out of poverty as also observed by Jeffrey (2011). The main challenge was the heavy dependence on a degraded natural resource base by the communities. This was a result of both the natural processes and human activities with the human activities being the main force behind environmental degradation. Unsustainable agricultural practices supported by the
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CBMFOs were the main contributors. This coupled with inadequate infrastructure such as roads and poor market structure limited the full benefits of financial inclusion. Overall, the main advantage of CBMFOs was the ready access to small loans which made life less difficult for the members.