Table banking is an economic loaning system derived from the principals of Muhammad Yunus‘s practice of microfinancing which was catalyzed in Bangladesh and is based primarily on trust.
In Kenya, table banking is a proven method for women to spearhead their finances and experience economic perks through organized and calculated means. The rise in popularity of table banking has contributed to over 400 table banking groups in Nairobi alone, according to Joyful Women Kenya. Cumulatively, table banking groups throughout the country circulate approximately 60-80 million Kenyan shillings (around $793,259.30 – 1,057,679.07 CAD).
As an international intern with MEDA, I work with the MSAWA project in Kenya, that is a short form of the Swahili term Maendeleo Sawa. The name translates to ‘equitable prosperity’ and partners with small and medium entrepreneurs that focus on agriculture, extractives and construction. As their Monitoring and Evaluation Intern, I I primarily assist with data collection and the cross cutting team which provides services across the organization in regards to their monitoring and impact measurement, environmentally sustainability and gender. During my internship, I have the pleasure of focusing my work on gender and support the integration and collection of gender data from our Customer Relationship Management (CRM) software into a platform called Power BI which helps us track and visualize our data. I have also worked with the Kenya team to assess private sector grants through business appraisal processes. Through this opportunity, I learned how table banking is utilized in the development field. After watching it in action, table banking stood out for me as an innovative system that is a drive for women’s economic empowerment.
While participating in field visits, I always found one common theme: table banking. Although MSAWA does not directly support table banking in their project objectives, I found it fascinating that women, county to county, are able to come together and participate in something that will better their lives and even indirectly benefit their partnership with MSAWA. Throughout my internship, I have found that understanding the whole picture of development means discovering the unseen steps towards major goals. With table banking, the women I’ve met while in the field participate in a social and economic activity that allow for growing room to thrive and be a part of MSAWA’s target goal of engaging 20,000 SMEs to off take produce.
The practice of Table Banking forefronts women as leaders of their own groups; men cannot hold leadership positions. Overall, the participation rate of Table Banking in Kenya is 70% female. The process allows women to participate in accessing and contributing to the distribution of loans without having to qualify for loans by the agency of established banking associations. This is an essential incentive for women in Table Banking as many members live in rural areas or would be unable to qualify for loans by means of banking associations.
Each group establishes its own rules, constitution and how much money will be saved per month. A short term loan consists of borrowing up to 2x the individuals’ savings with a 10% interest rate. With a long-term Loan individuals can borrow up to 3x their savings and have 12-14 months to repay their loans. Quarterly, members are given a bonus that is inserted directly into their savings account and dividends are given annually. Now, most women who participate in table banking have their own secure bank accounts and, most notably, direct access to their own money. Women can also mitigate risk by receiving trainings on securing money straight from their phones using the popular Kenyan innovation MPESA, instead of carrying physical cash.
Table banking has been a catalyst for innovation. When engaged in table banking, women are provided with tools and trainings to learn financial literacy that can support them in becoming a small entrepreneur in the skillsets and value chains of their choosing. As a result, table banking supports women’s economic empowerment through agribusiness and technological innovation.
Through my engagement with MEDA, I have had the opportunity to witness the significance of table banking for women around Kenya. While living in Kenya and participating in business appraisal processes of MSAWA, I have seen firsthand how table banking has positively impacted the lives of Kenyan women economically and socially. Table banking is a way for women to participate in trainings to invest their money in different agricultural value chains such as chili farming, acacia gum and fish farming.
Women are provided with a medium through which they can invest in the futures of themselves and their families, allowing them to pay for assets like school fees for their children. Through table banking, women can gain skills to invest in their own agribusiness and value chains to ultimately achieve equitable prosperity.