How Is Are Small Businesses Affected from the Credit Crisis

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					Draft Report


Sunita Kapila
September 2008.
1.0     Introduction
The post-election violence (PEV) that affected the country from January to March 2008,
caused widespread destruction of lives and property. A March 2008 Government of
Kenya Report stated that the worst violence was in Nyanza, Rift Valley, Coast, Western
and Nairobi Provinces and that it led to the loss of 1200 lives and the “dislocation of
about 350,000 people….heightened ethnic hatred and general disruption of social and
economic life”1 . Those whose livelihoods were affected are among the most vulnerable
and the poorest; many of these earned their daily incomes from informal micro
enterprises, often unregistered as businesses. The report estimates that the MSEs “lost
about 90 billion shillings in the form of destroyed property and capital”.

The exact measure of destruction of the assets and enterprises remains largely uncharted.
Visual accounts noted the widespread burning and looting of small business premises and
kiosks as well as of transportation vehicles but data on numbers affected has so far not
been systematically collected or collated.

Anecdotal accounts and estimates captured in the reports are summarized in this review.
The reports available are however on the situation between January to April 2008. There
is little documented follow up since then and the main sources of information for this
assessment on the status of recovery have been conversations with over 35 entrepreneurs,
representatives of national and local business support institutions (in Nairobi, Kisumu
and Eldoret) and donor supported NGOs as well as donors. Sometimes where there was
data which had been collected, it was not shared as it was considered specific to
particular projects and institutions.

1.1 Scope of This Desk Review and Definitions

In an effort to assess what the parameters of the damage to MSEs were and whether the
setting up of an MSE Recovery Fund would be an appropriate response, the Donor
Coordinating Unit (DCU) of the Private Sector Donor Group commissioned a desk
review of all the assessments made during the months of this national crisis and since, in
order to assist the Group in making a decision as to whether there was need to establish
the special Fund. The study was to also outline any mechanisms that have been
established for supporting MSEs affected by PEV and assess whether increased funding
to these would be an appropriate alternative to the establishment of a special Fund.

Although the TORs for this assessment had expected the assessment to be based on a
desk review of reports of damage and recovery, the only reports available were those
drawn up mostly at the height of the crisis (January a nd February 2008) and in its
immediate aftermath ( March and April 2008). There is very little systematically
collected and collated data available on responses to the crisis and the recovery process.

 Govern ment of Kenya, Report of the National Accord Implementation Committee on National
Reconciliationand Emergency Social and Economic Recovery Strategy, Nairobi, March 2008

In view of this gap, anecdotal information on how MSEs are/are not being supported
since April was gathered through face to face and phone interviews with a broad range of
stakeholders in the MSE sector. The conclusions and recommendations in this report are
based therefore on both the reports from the crisis period and these interviews.

Definition of what a micro enterprise or what a small business is varies from country to
country and among institutions. The Donor Coordinating Unit of the Private Sector
Donors Group in Kenya has used the number of employees as the main criteria to define
the term “MSE” as used in this review. MSEs to be considered are those which have
fewer than 15 employees but can be formal or informal, rural off- farm or urban. This
means that farms are not to be considered to be “enterprises” for the purpose of this
report. The MSEs considered include value adders to agricultural produce such as
processors and traders as well as small scale manufacturing and service providers. The
Terms of Reference for this assessment also suggest a focus on the “Jua Kali” portion of
the MSE subsector affected by the PEV.

The first step in this review and assessment was an overview of reports about the post
election violence (PEV) where references were made to effects on MSEs. Section 2 of
this report presents this with examples drawn from a few of the affected economic sub-
sectors. Section 3 presents a synopsis of some of current responses to the effect on MSEs.
Section 4 addresses conclusions and recommendations with regard to the setting up of an
MSE Business Recovery Fund.

1.2 The National Reconciliation and Eme rgency Social and Economic Recovery
Strategy Target for Business Recovery

The Report of the National Accord Committee outlines the Government’s reconciliation
and peace building strategy. Among its targets is an allocation of K.Shs 10 billion “to
assist the business community rebuild premises and access working capital for businesses
not insured and to re-stock”2 . As far as available data suggests, no allocation has as yet
been made to affected MSEs although cash allowances have been given to the Internally
Displaced Persons ( IDPs) to support them to rebuild shelters and livelihoods and to

The IDP camps have for the most part been dismantled but several still exist. The
“resettlement” through the “Rudi Nyumbani” campaign has meant the relocation/
resettlement of thousands of IDPs.Media reports show many IDPs still demanding
support through cash grants. Status of IDPs in terms of exact numbers and location is not
clear as the following quote from a July 2008 report shows 3 :

          The Kenya Red Cross Society reported that there were 22,538 IDPs in 46 IDP camps as of 25
          July. Interagency assessments …..have recorded a total of 98,223 IDPs in 132 transit sites.

    GoK, Report of the National Accord Implementation Committee.
 Office of the United Nations Humanitarian Coordinator in Kenya , HUMANITARIAN UPDATE
vol. July 2008.

 1. 2 Early Recovery Needs Assessment (ERNA)

 In April this year, UNDP and the Inter agency Steering Committee commissioned
 an Early Recovery Needs Assessment (ERNA) in order to contribute to the efforts on
 recovery and restoration of normalcy in areas affected by the recent post election
 violence. The description of the impact of the crisis on sampled districts was offered as
 information to guide the Government’s recovery strategy and donors’ plans 4 . ERNA’s
 recommendation with regard to livelihoods and MSEs was as follows :

     Early recovery initiatives targeting revival of livelihoods should therefore target to rebuild
     community institutions and networks; support farm and non-farm productive systems; seek to
     improve the natural resource base through environment related activities for the affected
     communities, the vulnerable, and women; and providing them with income earning
     opportunities (cash transfer) through skill development and the establishment of micro-
     enterprises; and rebuild new and improved infrastructure such as farm roads, re-establishment
     of broken market chains etc..

As the review of other reports relating to livelihoods and MSEs in the following sections
will describe, the above is the broad trend of recommendations of other reports as well.i.e.
that support be geared towards institutional, infrastructural and capacity enhancement so
that normal market dynamics be restored .Other ERNA recommendations pertaining to
trauma healing and peacebuilding training also been underlined by the other reports.

ERNA’s observations on disaster mitigation and risk reduction are particularly relevant to
MSEs and the issue of “compensation”. These are :

         Kenya currently does not have a disaster compensation policy or guidelines and yet the
         government has already begun distributing forms to people who lost their property to
         complete. The existing policy on disaster management needs to be enacted and to also
         incorporate compensation.

With regard to MSEs, ERNA drew upon the reports which are reviewed in this paper in
Section 2. It highlighted the fact that the PEV had the effect of slowing down the deepening
of the microfinance industry. It noted that “Most of the violence happened in the poor rural
areas where the majority of the microfinance borrowers live. According to the Association
of Microfinance Institutions of Kenya (AMFI), in January, the default rate was highest at
80%, although it has now gone down to 50%”. It also illustrated the effect on MSEs
through this account of Kisumu’s losses:

         The Kisumu branch Chamber of Commerce estimates that small and medium business
         owners suffered Sh.50 million loss in revenue due to missed business opportunities and
         destruction of property. Close to 80% of the small and medium enterprises (SMEs) were
         affected by the violence. An estimated 5,000 jobs were lost. Apart from the loss in

  The Districts visited by the ERNA mission were Trans Nzo ia, Uasin Gishu, Kip kelion, Naivasha, Lugari,
 Kakamega, Kisumu East, Kisii, Nyamira, Sotik, Borabu, Kericho, Nakuru, Molo, Narok, Mt. Elgon,
 Nyando and Bomet

        revenue, most of the SMEs have outstanding loans to service. In Narok and Nakuru,
        there was significant decline in group solidarity in terms of borrowing. There have been
        significant declines in trust at group level. This has especially been observed in groups
        which are cross tribal.

The need for special targeting of “vulnerable households especially those supporting
displaced families” is underlined and distinctions in impact on men and women are also
drawn. Impact on women made worse through threat and occurrence of sexual violence
and the loss of domestic materials and equipment such as food and water storage
containers. Women’s incomes were also affected by the effect on grain milling facilities,
trading facilities and the availability of small livestock like chicken usually kept by

2.0 Reference to MSEs in PEV Related Reports January –April 2008
In an April 2008 paper, the World Bank estimated that as a result of the post election
crisis, the “ ….combination of output and employment losses and sharply rising inflation
had a direct impact on poverty”5 . It estimated that, on a preliminary basis, poverty
headcount has increased by 22 percent and a measure of severe poverty has gone up by
38 percent”. It outlined some of the key problems as
    (i)      damage to physical assets,
    (ii)     the displacement of thousands of people
    (iii)    the loss of confidence among investors and tourists and
    (iv)     damage to social capital.

The momentum of the inflationary effect of the PEV period has been compounded by
rising fuel and food prices and the poor rains have added, as expected in the World Bank
paper, to the slowdown in private consumption.

2.1 Business Services and Agricultural Value Adding MSEs

Over the past five years, three donor supported projects ( the USAID supported Kenya
BDS, the DFID supported Business Services Markets Development Project or BSMDP
and the World Bank’s MSME Competitiveness Project) have contributed to important
developments and innovations in Kenya in the design and delivery of BDS. At the same
time there has been a recognition that the poor do not engage very actively in demanding
or supplying BDS; they have recently been encouraged to do so through subsidized
demonstration and market stimulation. Innovations in service provision by private
providers have suffered as demand at the MSE level has fallen because of rising prices
and business expenses. The undermining of inter-ethnic producer groups has also affected
both the demand and supply of business services.

 The World Bank, “Kenya: Economic Impact of the Polit ical Crisis in Kenya 2008 and Beyond”, a
Working Draft, April 2008.

Business development services (BDS) refers to non- financial services such as
   - training, technical and management advice;
   - development and promotion of new technologies;
   - assessment of markets and market information delivery;
   - marketing support and provision of physical infrastructure;
   - organizational and advocacy capacity development.

Previously, BDS was usually a public extension function or delivered through NGOs. In
the last decade as the market based approach has taken root in donor policies and
programs, the focus in thinking and support has moved to developing BDS markets i.e.
stimulating the demand for and supply of BDS from MSEs. BDS as technical support to
enterprise development and performance is now perceived as being best placed in the
market and not in a public sector agency.

In a March 2008 meeting of the BDS Donor Coordination Group, preliminary
assessments of loss (in estimates of million shilling sums) were made for four value
chains in which BDS activity is being stimulated: dairy, tourism, horticulture and fish.
MSE components related mainly to the status of input suppliers such as agro-vets and
service providers such as transporters, traders and the processors/ value adders.
Processing sites were looted, destroyed or closed, exporters relocated and fuel was
difficult to get or very expensive. In the different projects’ reports 6 , there was no detailed
breakdown of numbers of MSEs affected or their losses but there was discussion on the
responses to be designed.

The BDS Donor Group insisted that commercial principles in service delivery be
observed and not be compromised. These principles could serve also as guidelines for
any potential recovery fund. These are:
 distort market mechanisms as little as possible
 be guided by “commercial reasoning” and lead to quick income gains for the most
   affected businesses
 mainstream peace and reconciliation messages and interventions

The Agriculture Development Donors Group highlighted the problem of a great deal of
animosity between communities and urged that the deep rooted land related issues be
addressed. The Group’s report referred to the existence of a voucher system through the
Ministry of Agriculture to get inputs to farmers. 7 The benefit of this scheme has been
confirmed by farmers and small businesses in conversations with the author.

A March 2008 presentation on CNFA/AGMARK Kenya’s Agrodealer Recovery Program
in Western Kenya made an observation which the Country Director has recently again
reiterated. This was that some agro dealers left their previous areas of operation and have
since chosen not to return.

 These are summarized in the BDS Donor Group Post Elect ion Violence Assessment ,
 Agriculture / Rural Develop ment Donor Group Meeting Sector Assessments – Post Election Vio lence
Impact , Nairobi, 4 March 2008,Co mpiled by Antony Mbandi – GTZ PSDA.

The Example of Dairy MSEs

Examples from the dairy sector show the extent of effect on MSEs and service providers
in one value chain. Table 1 illustrates estimates and categories of value chain players. 8

Table 1: Summary of losses incurred across the dairy value chain

Stakeholders                                    Loss in Kshs
Farmer loss of Dairy cows                       4.20 b
Farmers loss of milk sales                      450 m
AI Service Providers                            24.5m
Agro-Chemicals                                  85.7m
SME dairy enterprises                           157.1m
Dairy Processors                                170m
Consumer loss (income effect on price increase) 2.05 b
Total                                           7.137 b

The NGO Fit Resources who were undertaking a radio program Mali Shambani under
the BSMDP commissioned a quick market survey with Research International of a
sample of retailers of milk, agro- vets and input and Artificial Inseminators to see what
the PEV impact had been in North and South Rift and Western Kenya especially in the
dairy and maize sub-sectors 9 . Sample interviewed included veterinarians and input
suppliers. The main problems cited were
     Access to customers, brokers, transport and inputs ( for milk retailers, the
        problem was getting the milk)
     Access to “emergency” services especially to vets
     Availability of stocks ( stockists had problems re-stocking goods out of stock,
        hence reducing availability of goods )
     All supplies increased in price
     Processing plant closures
     Costs of a range of products and services went up

Farmers/ MSEs wanted :
          o Responses to transport / transport cost issues
          o Restoration of market linkages between farmers and bulk buyers /
            processing plants/retailers
          o Greater access to credit for inputs
          o Lower priced inputs
          o Access to temporary “emergency” services (vet, dawa, dip, AI)
          o Provision of necessary input stocks to input suppliers

    Mburu B., “Impact of Post Election Violence on the Kenyan Dairy Industry ”, Nairobi, February 2008
    Research International and Fit Resources Reconstruction of The Agricultural Sector, April 2008.

The effect on dairy sector was also described in a study undertaken by the NGO Land o
Lakes o Lakes 10 . Most of the data collected and quantified related to the dairy farmers’
losses ; the reference to MSEs related to the informal milk traders in urban slums such as
Kibera and Kayole. The dairy study noted that
                     Many business premises were burnt or vandalized
                     Most informal traders could not collect their debts.
                     The volume of milk that the traders were handling fell to almost
                         half of the pre-election period.
Subsequently milk prices soared. There were over three price increments for consumers
over two months with “some ethnic groups being charged upto Kshs 1/litre risk
premium” in the Nairobi slums. The issue of conflict and damage to social capital
therefore reached down to the poorest consumers of milk and possibly other consumable
commodities as well. The study also delineated share of revenue of players along the
value chain – the largest share occurs at the processing and packaging stage and here the
prices had risen by about 25%. The question of course is what the situation is six months
later in terms of effects on the processors, traders and pack aging businesses.

 In February this year, the loss calculated from the impact of two months of market
disruptions stood at a total of K.Shs. 157 million for the MSEs in the dairy sector. In
addition, many of those who provide the AI services can be considered
microentrepreneurs while most of the dairy processors are small businesses. How these
enterprises have fared since February, has not yet been documented but a survey is

2.2 MSEs supported by Touris m

Many of the community-based tourism operations have been undermined affecting
negatively thousands of MSEs in some of the main tourist areas: the Coast, the Rift
Valley and Nyanza. Tourism is one of the key economic drivers under the Vision 2030.
In 2007, the tourism sector saw unprecedented growth reaching the highest levels the
industry had seen in the past decade. In 2007, it earned earned Ksh 65.4 Billion, an
increase of 15.4% over 2006. Of this the international source share was estimated at 73%
.In the first half of the year 2008, the tourism industry went through a catastrophic period
due to the post election violence. To date, holiday arrivals into Kenya show a 60%
decline. 11

Community based tourist focussed activities were negatively affected in all tourist
destinations. Nyanza Province, the Maasai Mara Game Reserve and the Coastal Region
have all seen reduced tourist numbers. This has automatically impacted on MSEs who
catered to the tourists. In case of handicrafts, the tourist connection also expanded export
markets for crafts.

  Mburu B., op cit.
  The Touris m Trust Fund, “Report on the Impact of Post Elect ion Violence on TTF Funded Co mmunity
Based Programmes”, September 2008, Nairobi.

Other examples cited in a Tourism Trust Fund report on the impact of PEV refer to the
MSEs which offered minibus and boat tours at the Coast and Camp Projects such as the
community managed Sekenani Camp Project whose continued expansion and activities
stalled because the camp lost in excess of Kshs.7,000,000 in early 2008. Construction
also stalled due to unrest in Naivasha, Mai Maihu and Narok and has not resumed.
Increased prices of construction material and relocation of skilled artisans ( also MSEs in
their own right) have affected many of the community based tourism activities.

Box B. Cultural Touris m and Handicraft Makers Affected

Kitui Integrated Creative Arts & Business Appraisal (KICABA) is an umbrella community based
organization serving communities in Arid and Semi-arid areas that seek to better the lives of its
members. The association runs a creative arts facility of which the majority of members are women
and the youth. KICABA has currently twelve (12) groups specializing in weaving, bead work, carving
and music.
The post election violence has caused a drop in the project revenues as the curios sold locally at the
stalls and sent to the Masaai Market in Nairobi have seen reduced demand. Competition is now rife as
larger more established business with better marketing skills are able to reach the fewer tourists.

Source : The Tourism Trust Fund, “Report on the Impact of Post Election Vio lence on TTF Funded
Co mmunity Based Programmes”, September 2008, Nairob i.

2.3 Urban Jua Kali Artisans and Traders

The Jua Kali sector was a target in all the urban areas hit by PEV mainly Nairobi,
Mombasa, Naivasha, Nakuru, Eldoret, Kisumu. There is no data available on the numbers
affected. The National Federation of Jua Kali Associations (KNFJKA) estimates that in
Nairobi alone its member associations suffered losses amounting to K.Shs 50 million.
Nationally, the data is still in the process of collection and collation.

Across the country and especially in the outskirts of cities in the Rift Valley and Nyanza,
marketplaces were razed to the ground. The fear that ensued kept micro entrepreneurs
away from these market sites until quite recently when some reconstruction of stalls and
reconciliation efforts has encouraged people to return (but only if they are able to feel
assured about personal security). Others have not returned, are waiting to be “resettled”
and to establish their livelihoods, living off donations in the interim.

At the same time, there are stories told of remarkable recovery as entrepreneurs re-
generate capital through friends and family and whichever community institutions offer
support and set up businesses again. These might be in their original locations and many
times in areas to which they opted to or were forced to relocate. The worst and
continuing casualties were/are the IDPs who lost homes and business premises (and often
these were rented ) and have no assets left to restart. These are the thousands that still
need active support to rebuild their homes, enterprises and lives. In the environs of
Eldoret alone, 50,000 persons were still living in camps in early September. The Rudi
Nyumbani campaign of earlier this year has meant that thousands opted to move to areas

of ethnic origin and how they have fared there in terms of entrepreneurial start-up is not

A crucial factor to note in the devastation of MSEs is their lack of insurance given their
informal status and when formally registered, their small size and profit margins. This
need for insurance had been highlighted previously as well but has been accentuated by
recent losses.

2.4 The Microfinance Industry

This excerpt from the K-Rep Development Agency’s report describes effect of PEV on
the savings which support MSEs business cycles in the urban slums 12 :

      The first economic impact of the post-election crisis includes damage and destruction of
      business assets. These include losses from burnt and damaged business premises of clients
      (however humble such premises may be); damage and destruction of equipment used in
      business….a total of 190 clients out of 14,882 clients have reported that their business
      premises were burnt down mostly in Kibera and Huruma slum areas in Nairobi. The second
      economic impact is loss of trading stock due to looting. A total of 386 clients’ businesses
      were looted. The clients lost all their trading stock. Some clients have had to withdraw their
      savings to replace some of their stock that was looted. They have had to utilise financial
      assets and resources that would otherwise have been used productively in investment and
      business expansion.

This depletion and diversion of savings to deal with personal emergencies during PEV is
mirrored at the level of the smallest of financial institutions (the Rotating Savings and
Credit Organizations or ROSCAs). Here the effects of PEV are still palpable. The credit
and savings merry-go-rounds is especially popular with women’s groups and many of
these groups have now disintegrated. For example, the Catholic Diocese of Eldoret’s
Microfinance Officer spoke of the interruption of the self- sustaining cycles of saving and
lending of women’s ROSCAs and how injection of new capital from an outside source is
now required.

In the microfinance sector, the effect on some of the institutions was more serious than
others. Those who were most affected were the ones whose retailers operated mainly in
Rift Valley and Nyanza and in the periurban areas of Nairobi and Mombasa i.e. in the
“corridors of war” as described graphically by one respondent during the course of this

A Rapid Review of the Initial Impact of the Post Election Crisis in Kenya on the
Microfinance Industry in Kenya was done in January 2008 by Microsave and AMFI, the
Association of Microfinance Industries. Its observations were made at a time of great
uncertainty and the damage reported at that time does not entirely hold at this time, seven
months later. However, it is useful to re-visit the conclusions and recommendations on
the way forward in order to assess whether/ how these pertain to the present situation.
     K-Rep Develop ment Agency, “Impact of The Post Election Chaos on KDA Clients”, Nairobi, undated.

The main areas of impact were 13 :

     1. Clients: Areas particularly affected included Kisumu, Eldoret, North rift valley,
        and in Nairobi – Kibera and Mathare. Trust between members of different
        communities was significantly affected. There were higher prices for inputs and
        supplies and lower demand for outputs.

     2. Loss and liquidity: There was an immediate and widely reported impact on cash
        flow in affected areas, programmes with a regional focus are especially hard hit.
        In terms of financial exposure or risk of loss, the group based, and rural
        microfinance appeared to be particularly affected. 14 (Estimates of financial impact
        an institution by institution basis were drawn up at the height of the turbulence in
        January 2008; the accuracy of these estimates has not been established but in
        many cases institutions in affected areas appear to have overestimated). MFIs
        estimated the impact through calculations of client deaths ( as a result of PEV),
        clients displaced, businesses destroyed, impact on cash-flow and number of
        groups not contactable. Organisations with proximity to clients, and verification
        through phone calls to clients wherever possible, reported lower impacts.
        Continued verification exercises since April have corroborated this.

     3. Impact on Kenya’s SACCOs was moderate to low : While there are no figures
        for SACCOs, conversations with cooperative bank at the time of the unrest and in
        August 2008 suggest that impact appears to have low except in the sectors worst
        hit by the PEV such as tourism and some of the agricultural sub-sectors such as

     4. Impact on staff was and continues to be significant, especially in conflict
        areas. MFIs and staff working across “tribal boundaries” appeared to be the most
        affected. Most MFIs reported and continue to report the need for counselling
        services both at the staff and client level. Staff –client professional relationships
        have also been severely affected due to sensitivities related to ethnicity. 15

   Cracknell D., “A Rapid Review of the Initial Impact of the Post Election Crisis in Kenya on the
Microfinance Industry in Kenya and Potential Responses”, Microsave in collaborat ion with AMFI and
FSD, February 2008, Nairobi.
   There is as yet no available calculation of actual, substantiated losses incurred by the MFIs.
   Cracknell D.,op cit.

   5. Group solidarity: This was an immediate effect on the solidarity groups with
      significant decline in trust at group level. This undermining of the social capital

           Box C. Impact on Group Solidarity

           “Other impacts include the disintegration of group solidarity with groups which
           are cross tribal being particularly affected. We are watching this carefully, but
           there are already indications that we will have to reorganise groups. It is clear
           that we need to re-examine how we reform groups and that we will need to have
           sessions targeted at building group solidarity”.
                                                                An MFI leader.

       base of microfinance continues to be the major challenge in the MFI sector six
       months after the PEV. The need for peace messages and dialogue was obvious
       during the PEV period. Deep distrust still exists.

Overall, it would appear that the fact that the pre-PEV microfinance industry was starting
to be robust, market driven and in period of positive transformation helped the larger
players weather this disruption reasonably well. There were losses, loan readjustments
and extended grace periods, but the liquidity problem did not grow into a lasting problem
for the larger of the MFIs.

Nonetheless, the PEV situation also served to point out that the industry structures,
investors, or the support industry such as capacity development facilitators were not
established with any anticipation of the need to ever having to respond to a crisis such as
the PEV. It pointed out also how difficult the process of deciding on the best responses
and setting up the responses can be. For example, in view of the immediate cash flow
problems reported in the first two months, a liquidity fund to support the most vulnerable
MFIs was thought an important mechanism to set up. There was a USAID mission in
February 2008 to review the potential for the creation of a guarantee mechanism. The
fund is only just being set up in September 2008.

3.0 Recovery Initiatives by Donors and MSE Support Institutions

Given the desk-based nature of the study, there was no field work as such but
conversations took place with a sample of donors, entrepreneurs, and MSE networks and
support institutions to ascertain the kind of recovery support being offered and the extent
to which it was meeting needs.

The European Commission has recently committed € 7.00.000 to a new Assistance to
Small and Micro Enterprise Programme (ASMEP). Implementation of this programme is
commencing in the coming months and this will be the main vehicle of EC support to the
MSE sector recovery. USAID has supported the recovery through the Guarantee Fund

described below in Section 3.1 and its additional budgeting of projects in the worst
affected sub-sectors. Therefore the completion date of two of its national programs due
for closure the Kenya Horticultural development Program (KHDP) and the Kenya Maize
Development Program (KMDP) has been extended by 6 months and USD 2 million
injected into these projects to help responses to the market disruptions. DFID has added
2.5 million sterling to its grant to the Financial Services Deepening Trust ( FSD ) to help
FSD mitigate adverse impacts on the micro finance sector. DANIDA is continuing to add
to its financial support to the Micro Enterprise Support Program Trust in order to
facilitate tailoring of products and processes to respond to the PEV affected.

The general conclusion is that donors and NGOs have chosen to adjust their budgets,
geographical emphasis ( for example GTZ’s Private Sector Development Assistance
Program shifted its attention form Eastern and Central Kenya to Western, Nyanza and
Rift Valley Provinces) and programming to incorporate (i) peace and reconciliation
messages and client training in post-conflict management (ii) entrepreneurs who have re-
established contact with their MFIs or technical assistance organizations are being
adequately supported. This however leaves out thousands who have relocated or who
have been entirely “displaced” in terms of total loss of homes and assets. These would
comprise the “very hard to reach” MSEs whose location and status is not known. The
challenge is how to configure support which can assist their recovery.

3.1 Rural MSEs

Interviews with donors and the donor supported MSME project personnel suggests that
response to the crisis was delivered through adjustments to project schedules and budgets
and additional financial assistance of varying amounts. Peacebuilding messages have
been incorporated into ongoing activities. Reconstruction of market stalls and
infrastructure remains a huge challenge with the damage done only partially ameliorated.

On the other hand, the small agro-product shops are doing good business despite high
prices of fertilizers and other inputs. An example of the kind of support some of them
have received is that offered by the newly established Alliance for a Green Revolution in
Africa (AGRA) to AGMARK/CNFA an NGO which in turn has supported some of the
worst affected MFIs to extend credit to agrodealers. They also set up a Grant Fund to
assist in the purchase of equipment such as weighing scales, refrigerators, AI tanks and
costs relating to business relocation.

CNFA/AGMARK initiated the recovery plan to support the affected agrodealers in
March 2008 when the violence had subsided. This was done with a sense of urgency as it
was important to get the agrodealers restocked so that inputs would be available to
farmers at the beginning of the long rains in March-April. The recovery program
activities have included the following:

      Seven workshops organized in western Kenya with agrodealers and input supply
       companies (maize seed and fertilizer companies). The objective was to bring the
       companies and agrodealers together to discuss ways in which the supply chains

         would be reopened. (Many companies had suspended distrib ution of inputs to
         most parts of western Kenya). Issues of joint ordering were also discussed.
     CNFA coordinated the joint procurement of fertilizer and seed. More than a 100
         agrodealers benefited from the joint ordering system.
     CNFA initiated an agrodealer loan scheme with SAGA. These are loans targeting
         affected agrodealers. CNFA placed a fixed deposit of $56,000 with SAGA for this
         purpose and as of August 2008, 18 loans valued at $ 28,000 have been advanced
         to agrodealers.
The dairy sector has recovered up to 60% of the production losses at the height of PEV
but prices remain high. A 24 month cycle is necessary for full recovery as feeding and
lactation periods were interrupted with its effect on the entire chain including the
veterinary service providers, processors, bulkers, traders, transporters etc.. USAID has a
dairy development program with the NGO Land o Lakes which has adjusted as other
programs have to incorporate the recovery effort. Of particular concern are areas which
border between traditional ethnic boundaries here recovery is more difficult. SITE, and
NGO which has been instrumental in designing and scaling up Kenya Dairy Board
certification for MSEs in the dairy sector are undertaking a systematic data collection
exercise on the impact of PEV on these enterprises and how they can be best supported to
re-establish themselves.

Much of the humanitarian assistance to those affected has targeted IDPs and farmers. For
example the European Community’s Humanitarian Office (ECHO) started a voucher
scheme in July to help farmers 16 . These vouchers are being given out over a 12 month
period through six international for seeds, farm implements and fertilizer. Similarly, in
September, the Catholic Relief Services partnered with USAID to implement a livelihood
recovery project using a voucher scheme approach. About 6000 families in the Rift
Valley (vetted as deserving by village elders and segmented according to certain selection
criteria) will receive vouchers for about 25000 shillings each to buy inputs for their farms
and/or off farm businesses using suppliers listed under the scheme.

The Ministry of Agriculture together with the World Food Program and the Food and
Agriculture Organization has also been of considerable help to both farmers and the
agribusinesses as their cash grants and vouchers for farm inputs have helped restore some
businesses and farming activities. This was apparent in conversations with agribusiness in
the Rift Valley.

3.2 Urban Jua Kalis

Of those that left their original worksites in fear, there are still thousands who are unable
to go back to these because either they have been taken over by others or they are too
afraid and traumatized to return. Where these dislocated entrepreneurs now are is not

     ECHO Post Election Violence Early Recovery intervention, April 2008 to April 2009

known. The present status of the Jua Kali sector can only be alluded to through the
sampling of accounts of NGOs and networks which are actively supporting this sector.
Here three examples are given.

An NGO that has targeted its response to the construction of destroyed worksites and
market stalls is the Kenya Gatsby Trust (KGT). With funding from the Ford Foundation,
it has already initiated work at Kisumu’s Kebuye Market in the restoration and in fact, the
upgrading of market stalls. Similar initiatives are planned for Nakuru and Busia under
KGT’s Healing Kenya through Trade project. Also planned is the construction of
workspaces ….(which) will mainly target skilled youth and women involved in
processing and value addition that require use of tools and equipment in a secure place to
work and store. About 100 entrepreneurs in each town would be targeted to benefit from
these structures each employing a minimum of 2 additional people”. 17 As part of
Corporate Social Responsibility, a Kenyan corporation has also approached KGT for
creating and monitoring job creation opportunities for unemployed youth such as car
wash facilities, garbage collection points and cleaning contracts for the youth in Kisumu
rendered unemployed both by the automation of the bus park and the post election

A street traders network called the Kenya National Alliance of Street Traders and
Informal Vendors (KENASVIT), an association of hawkers in seven towns, has been
working on peace and reconciliation messages and dialogue in the worst hit towns. They
have been supported in this by the Unitarian Universality Service Committee (UUSC) of
the USA. UUSC have also extended this month ( September 2008) another grant to
continue this work and to set up a Revolving Fund to extend credit to its members to
restock and to rebuild microenterprises destroyed during PEV.

According to a report from the Kenya National Federation of Jua Kali Associations
(KNFJKA), the Federation had been in negotiation with the Provincial Administration
and the Ministry of Local Authorities for allocation of land within urban areas for setting
up worksites. In a September 2008 conversation, a KNFJKA representative states that
this negotiation has now picked up new momentum and 55 sites nationally are in the
process of being identified and allocated. The Kenya Hawkers Association are a member
of the Kenya National Federation of Jua Kali Associations (KNFJKA) and have reiterated
that the Associations are making good progress in setting up SACCOs which can lend to
them at the rates the informal traders can manage (1 per cent per month) and are
successfully negotiating with one of the local authorities (Bungoma) for land to set up

To insure against future calamities, the CIC Insurance Company is in negotiation with the
Jua Kali sector representatives to design a product which will be accessible and
affordable to most MSEs. Details are not yet available but according to the KNFJKA
representative, this design process had already been underway since last year.

  Kenya Gatsby Trust, “Rebuilding Enterprises through Workspaces and Market Infrastructure
Develop ment” Update, Nairobi, August 2008.

3.3 MFI Recovery Measures

In the immediate aftermath of the post-election crisis, financial institutions at all levels
set up “grace periods” for their clients so that loan repayment schedules were
restructured. Losses of several billion were incurred by banks and the larger MFIs but for
the most part, there has been no serious liquidity problem with banks or the larger MFIs
all of which did allow grace periods for their clients’ repayments. For the wholesalers in
the MFI sector, the donors who previously extended grants to develop capacities, became
the main source of support at the time of crisis. Therefore MFIs such as the Micro
Enterprise Support Trust have found that their development partners have been their main
support in bringing and keeping operations at acceptable levels of commercial efficiency.
This reliance by the larger MFIs on support from their “traditional” development partners
has been a popular route taken; this in turn has allowed continued delivery to retail
clients. Although the larger MFIs have weathered the storm better than the smaller ones,
they are nonetheless affected to the extent that their cash reflows are not as they were pre-
PEV. There has been a loss of momentum and shrinkage in terms of demand. This is
perhaps reflective of the overall impact of PEV on the economy.

According to a 2006 survey on access to financial services in Kenya, MFIs are used only
by 3% of Kenyans 18 . Majority of Kenyans ( over 70 per cent ) source credit from family,
friends, suppliers or shops. Given these sources, MSEs relying on these diverse sources
are likely to have been hit very hard by the effects of PEV especially if they were located
in the geographical areas of heightened conflict. It is therefore probable that measures for
financial support undertaken so far and described below in sub-sections 3.3.1 and 3.3.2,
will not reach the smallest of the entrepreneurs, many of whom work in the Jua Kali
sector and use informal sources to access credit.

Key areas highlighted in the February 2008 overview of the effect of the PEV on MFIs as
important for recovery were:

          restoration of liquidity (since cash reflows at the height of the crisis were almost
           impossible in the conflict zones) through a Guarantee Facility since weaker and
           more affected institutions carry higher levels of risks which may make it more
           difficult to attract local commercial funds. Therefore the involvement of a
          a recapitalization facility for the institutions most severely affected
          the mainstreaming of counseling and peace building to alleviate the trauma and
           threats suffered by staff, clients and communities.

Responses to these three areas are described in the following three sub-sections.

     FSD Kenya, Financial Access in Kenya: Results of the 2006 National Survey, Nairobi, Oct. 2007.

3.3.1 The Liquidity Fund

USAID and DFID are supporting a Decentralised Credit Authority (DCA) to help the
more fargiel MFIs which might be considered risky by commercial lenders to access
loans under a guarantee mechanism. (500,000 USD) for loans of up to 10 M USD
through OIKO Credit and Equity Bank. The Financial Services Deepening Trust is
facilitating the setting up. FSD describes the rationale and the lending mechanism of the
liquidity facility as follows 19 :

           The initial analysis pointed to the need for liquidity support among a number of the
           smaller institutions with significant portfolio concentration within the most affected
           areas. It was clear that the largest nationwide MFIs and low-income market oriented
           banks were able to handle the financial impact within existing resources and established
           financial relationships. Given the availability of considerable liquidity in the Kenyan
           financial system the emphasis has been not to seek new sources of funding but finding
           ways to direct the available liquidity to the institutions needing it. While there are already
           a number of wholesale institutions addressing the MFI and SACCO market in Kenya,
           lending to institutions who were worst affected entails accepting a greater degree of risk
           than would normally be faced. Two existing wholesale providers, Equity Bank and
           Oikocredit, working in partnership with AMFI, US Agency for International
           Development and FSD Kenya, will be expanding their lending to MFIs and SACCOs.
           The facility put in place will enable Equity and Oiko to finance institutions whose risk
           profile has worsened as a result of the post-election chaos.

3.3.2 Re-capitalisation

For some MFIs, the capital base was also undermined due to the higher level of non-
performing loans. In order to facilitate fresh capital injection, FSD Kenya is providing the
Jitegemee Trust Limited (JTL), a wholesale finance institution which offers equity or
quasi-equity finance for MFIs and SACCOs, with additional financial resources. This
allows strong institutions which have suffered capital depletion to obtain new capital.

However, the re-capitalisation that is requires at much lower levels for example at the
level of the Rotating Savings and Credit Associations continues to pose challenges at the
community level. Here the core capital of community based lending and savings groups
for example in areas such as the Rift Valley and the Coast has been depleted given the
severe losses suffered. Those affected are in some cases able to mobilize through help
from whichever source is identified and in many other cases are still hoping for assistance
in the form of grants or soft loans.

3.3.3 Peace building

Supported by USAID, AMFI has been promoting peace and reconciliation in affected
communities aimed specifically at re-building trust within groups across ethnic divisions.
This is vital to future operational effectiveness of MFIs. A report commissioned by based
AMFI called “Development of Microfinance Industry Peacebuilding Initiative” (dated

     Financial Services Deepening Trust , FSD News, August 2008, Nairobi.

August 2008) charts out a role for AMFI in peacebuilding and reconciliation.. According
to this report, “peace messages are packaged in such a way that they can be delivered
throughout the year during staff client business meetings, leaders’ training sessions and in
community platforms”. A curriculum for MFIs to engage in peacebuilding has been
developed and a Training of Trainers course has just been launched.

MFIs are also being supported to develop products that include other forms of credit
delivery to supplement the solidarity system. This is in light of the undermining in the
conflict zones of inter-ethnic groups as the trauma of PEV continues to affect group
relations. MFIs will need skills in Conflict Prevention, Management and Resolution
(CPMR) and the development of internal structures within institutions to support this
work. MFIs interviewed also reported trauma counseling for their staff and considerable
time being spent in community level dialogue on the need for peace in order to restore
economic activities and efficient credit and savings systems.

4.0 MSE Recovery Fund ?
Given the degree of displacement of people and destruction of MSEs during PEV, there
are still many micro entrepreneurs that have not managed to recover from the effects of
the crisis, despite all the initiatives described above. This is obvious from media reports
and the interviews held during the course of this brief assessment. Numbers of those who
are still struggling to get back into somewhat stable livelihood situation however cannot
be estimated since there is lack of documentation on names and numbers of MSEs
affected. It is this target group that the assessment’s conclusions and recommendations
pertain to.

4.1 Conclusions

Livelihood recovery mainly targeting farmers and based in humanitarian support

While there is no targeted effort for MSE recovery, there have been a number of
initiatives by humanitarian agencies and individual governments to extend grants or
vouchers to IDPs and farmers affected by PEV. UNDP’s Early Recovery and Food
Security Team is also proposing a “Return and Recovery Fund” for which it is currently
looking for funds. It is hoped that the Fund if set up could be implemented in partnership
with the Ministry of State for Special Programmes for projects in areas identified through
the Early Recovery and Food Security Cluster of the UNDP. The target beneficiaries
might well include MSEs but the approach taken is a project approach for support to
agriculture, fish farming, youth employment , rehabilitation of schools, hospitals etc..
This is a proposal that is apparently under active discussion with a donor.

     Box D. IDPs take the Initiative in Restarting their Business Lives

     In Nakuru, a group of IDPs informed UNHCR that 166 families from the Nakuru
     ASK Showground IDP camp have collectively bought a 2.5 acre plot of land at
     Maimahiu, Naivasha district where they plan to settle. The group consists mainly of
     businessmen and women who claim they could not return to their predisplacement
     areas insecurity. Some individuals have already settled on the land and are appealing
     to humanitarian agencies for support with shelter materials and funding to enable
     them resume their business activities.

     Source: HUMANITARIAN UPDATE vol. July 2008,Office of the United Nations
     Humanitarian Coordinator in Kenya

However, none of the above “livelihood recovery” measures are placing interventions
within a clear framework of strengthening MSEs as market players, which would be
presumably be the approach espoused by the Private Sector Donors’ Group.

Financial Services Innovation for the Micro level of Enterprise and for Disaster
Preparedness requires attention

Many of those interviewed in the course of this assessment said that in their estimation,
there are still thousands of Kenyans who lost their business assets who cannot find the
capital to repurchase/reconstruct what was lost or burnt. MSEs which relied on their
solidarity groups to offer the small amounts of credit required for both welfare and
enterprise are not always able to access reconstituted groups or funds as group savings
were depleted/diverted during the PEV period. The smaller MFIs are trying to find
cheaper source of lending capital and investing more of their scarce resources than
previously in leadership training in order to be catalytic to the necessary reconciliation at
the group and community levels. The development of institutions closer to the micro
entrepreneurs such as the Jua Kali SACCOs ( Savings and Credit Cooperative
Organisations) and loan products with repayment schedules and interest rates viable for
the smallest MSEs still needs attention.

The experience of the Microfinance Industry as one of the sources of financial support to
MSEs has also shown that its systems need to pay greater attention to disaster
preparedness. The design of systems which have better loan and client tracking capability
was also apparent during the PEV. The acute need at all levels of MSEs for affordable
insurance and insurance covers which address the kind of activities that PEV brought and
the challenge for financial institutions to design these, is also apparent.

Conflict prevention and active peace building is everybody’s “core business”

In conversations held with entrepreneurs and representatives of institutions that support
MSEs, a point made over and over again was that in all the areas affected by the conflict
earlier this year, there is still a sense of unease. In the PEV affected areas, the aftermath
of ethnic distrust and a sense of unease about possibilities of reoccurrence of violence

remain. The NGOs, faith based institutions and the communities themselves through their
leaders are engaging in peace dialogues so that people divided through distrust can
become comfortable with and trusting of each other again. This is an ongoing process to
which donors and the public sector are contributing.

Many pre-PEV entrepreneurs in these areas have chosen not to return to their original
places of work. Businesses which belonged to those who were displaced, have not always
been revived. Reasons include the fact that often they operated from rented premises
which either do not exist anymore (they were either burnt or severely vandalized) or have
been taken over by individuals from ethnic groups who were opponents during the PEV.
Ethnic tensions continue to be articulated at community levels with the result that there is
considerable challenge in maintaining group solidarity for microfinance initiatives in
some districts. 20 The pre-conflict inter-ethnic amiability in rural and urban marketplaces
has been adversely affected.

The momentum is towards recovery

Even in the worst affected conflict zones such as the Rift Valley and Nyanza, there are
clear signs of recovery. Reconstruction of some business premises has taken p lace; there
is the bustle of trading and traffic and financial institutions are operating normally. But
although there is a sense of considerable recovery for business including small business,
the overall economic climate with an inflation rate of 27 + % and the escalating fuel and
input prices have added to the effects of the economic disruption caused by PEV. The
effect on MSEs of the PEV cannot be separated out very clearly from the effect of high
prices especially in the near absence of concrete data on the extent of damage and

What the effects of the PEV period have underlined is the precariousness which
underlines the existence of small and micro enterprises at all times. Often their sources of
credit and technical guidance and their market outreach tend to be entrenched in informal
networks. This limits their ability to tolerate strong fluctuations such as those brought
about by PEV and to sustain or improve productivity and incomes. Recommendations
which follow address this vulnerability as much as the consequences of PEV.

4.2 Recommendation

Livelihood recovery measures being done at present can be encapsulated under two main
approaches :

(i)ongoing support by donors to their Kenyan partners at the NGO or MSE network level
in order to rebuild business capacities either through surve ys, restocking , delayed
repayments, technical capacity boosts and peace and reconciliation mainstreaming into
core activities.

 Kona E.S. and Kantai R., “ Development of M icro Finance Peacebuilding In itiative:Reprot of Findings”,
AMFI, Nairobi, August 2008.

(ii) livelihood recovery initiatives which comprise of cash grants (such at the IDP
allowances or those being forwarded as humanitarian relief through NGOs) or voucher
systems for purchase of required essentials for personal welfare or entrepreneurial

Both of these are by their very nature quite limited in what they can achieve since they
are donor dependant and circumscribed in terms of one-time amounts. What the effects of
PEV have highlighted is the peripheral nature of most Kenyan MSEs to formal financial
and non- financial service markets since the smallest businesses are still looking to
informal sources of support just as always. The problems are old; the responses could be
more innovative than previously. This is the opportunity that a MSE Recovery Fund
could seize in order to craft a sustainable market based framework for recovery.

A MSE Recovery Fund targeted at the MSEs most affected by the PEV could serve as a
pilot for Goal 5 of the Private Sector Development Strategy. This Goal is to “support
entrepreneurship and MSE development’ with the result desired being “ a dynamic
integrated indigenous enterprise sector”. This the PSDS hopes to stimulate through the
following objectives :
     Improved coordination between MSE related initiatives
     Facilitation of MSE upgrading through worksites
     Facilitation of “private sector delivered BDS”
     Improved access to capital

In these aspirations, Goal 5 re-envisages what MSE support projects and programs have
been attempting for many years. Their success in achieving any of the above objectives
has varied; the two that have remained largely unmet relate to the worksites and the
coordination of initiatives. There is at present a readiness at the policy and corporate
levels to recognize the value that small business brings to the consumer and the
marketplace. There is therefore now a possibility that appropriate initiatives can further
harness this demonstrated goodwill.

Configuration of support might consider the following:

    Vulnerability to renewed conflict be taken as a factor to address in order to reduce
     it. Areas where this vulnerability still prevails be selected as the pilot areas for
     MSE recovery.
    Recognizing this vulnerability as a constraint in value chains, deliberate effort be
     made to choose value chains for attention where MSEs form a major base and
     different ethnic groups work together. This could be fish, dairy and grains (where
     MSEs do most of the processing and trading). Then the peace and reconciliation
     messages translate into cooperation for work in which different groups have equal
     stake and can move beyond the realm of dialogue into action.
    In urban centres where those worst hit included small scale artisans,
     manufacturers and traders, technical capacity restoration and enhancement and
     access to worksites and infrastructure are fundamental. If this process, as claimed

     by some Jua Kali sector officials, has already begun, then documentation and
     monitoring of the process for supplementing and scale up is needed.
    MSEs requirement for “cheaper” sources of credit at interest rates and under
     repayment schedules closer to their realities can dovetail well with the MFIs
     attention currently to design loan products and rebuild institutional capacities.
     Attention to product and institutional innovation, both in terms of financial and
     non- financial services, would be at the heart of an adequate response to the
     difficult time that Kenyan MSEs face at present.
    MSEs are private sector players and attention to them in the post-PEV period
     should be seen an opportunity to strengthen their capabilities so that their main
     constraints in terms of productivity, efficiency and sustained market presence are
     alleviated in a substantive and integrated manner.

Some elements that the Recovery Framework could consider could be:

   a. Data based planning

   All levels of conversation with stakeholders in the MSE sector observed the lack of
   data on specifics of the PEV effects on MSEs. Planning without clear parameters of a
   problem is clearly not feasible. Examples of initiatives to collect province-by-
   province and city-by-city baselines on the PEV effect on MSEs in particular
   subsectors are worth emulating. There is a survey underway currently on the damage
   to dairy related MSEs and their current needs. Another survey being is on the status in
   seven towns of the impact of PEV on informal traders. Kenya Maize Development
   Program is similarly researching PEV impact on the maize sub-sector including the
   effect on MSEs. Clear statistical information on which to base alleviation measures is
   important. To capture both the rural and urban MSEs most affected by the crisis, the
   geographical areas to be targeted for further inquiry could be the Rift Valley, Coast,
   Nyanza and Naivasha, Nakuru, Eldoret and Kisumu. This would however leave out
   however the areas where some of the displaced entrepreneurs have moved to but this
   data is difficult to capture.

   b. A sectoral or value chain based approach

   Planning for support to the recovery effort might work best at a sectoral level. The
   sectors in which the PEV impact on MSEs is particularly visible are tourism (60%
   decline in holiday arrivals has obvious effect on MSEs based on
   craft/ecotourism/hotel suppliers), agribusiness and value addition ( e.g. the posho
   mills for grains, dairy bulkers and processors). Trading as an entrepreneurial activity
   cuts across all sectors. One MFI in the Rift Valley has reported that 60% of its client
   was affected by PEV were traders.

   c. Intermediary facilitative capacity

   Intermediaries who can facilitate business linkages for restocking, purchase of
   equipment, marketing, credit etc. will be necessary. In the case of the Youth Fund,

   financial institutions have been designated as agents of the Fund but any MSE
   Recovery Fund would require deeper outreach, easier accessibility and more active
   facilitation of business and service linkages.

   d. Secure Physical Infrastructure

   According to the Department of Internal Trade in the Ministry of Trade, there is data
   available on the registered businesses in each Local Authority. Apparently, data has
   also been collected on the impact of PEV on business but is not yet collated. These
   two sources could contribute to a map status of MSEs within to Local Authorities
   (LAs) though it is unlikely to offer a full picture as informal enterprises might not be
   captured under registrations. These “maps” can guide the choice of LA s where
   worksites on public land can be set up complete with market and sanitation
   infrastructure. If such sites are indeed being set up ( as stated by the Federation of Jua
   Kali Associations) or are to be advocated for, then build ing on what is going on is the
   best approach.

In summary, the setting up of a Recovery Fund could be useful if it is done in a manner
facilitative of market transactions and broad targeted outreach. The Recovery Fund could
work on the basis of a clear baseline on the status of MSEs in selected economic sub-
sectors and geographical areas. This baseline in some instances is in the process of
compilation but entirely absent in other economic sub-sectors. If drawn up in consultation
with the key stakeholders in selected areas, such data would provide the basis upon which
to nuance the implementation modalities. An outreach methodology using local
leadership and credible institutions in different localities would be the more appropriate
route to take. Vetting procedures being used by humanitarian agencies co uld be applied
and supplemented as appropriate. A MSE Recovery Fund could pilot test support
modalities with the PEV affected MSEs and then closely monitor and document these for
scale up in order to increase productivity and market visibility of the smaller private
sector players.


Cracknell D., “A Rapid Review of the Initial Impact of the Post Election
Crisis in Kenya on the Microfinance Industry in Kenya and Potential
Responses”, MicroSave in collaboration with AMFI and FSD, February
2008, Nairobi.

ECHO, “Post Election Violence Early Recovery Intervention : April 2008 to
April 2009”, Nairobi.

FSD Kenya, Financial Access in Kenya: Results of the 2006 National
Survey, Nairobi, Oct. 2007.

Financial Services Deepening Trust , FSD News, August 2008, Nairobi.

Government of Kenya, Report of the National Accord Implementation
Committee on National Reconciliationand Emergency Social and Economic
Recovery Strategy, Nairobi, March 2008.

KENASVIT, “ The Impact of Post Election Violence on the Street Vendors
and Informal Traders in Kenya” , The Kenya Alliance of Street Traders and
Informal Traders”, Nairobi, undated.

K-Rep Development Agency, ”The Impact of the Post-Election Chaos on
KDA Clients”, Nairobi, undated.

Kenya ECLOF, “ Report on Effects of Post Election Violence”, Eldoret,

Kenya Gatsby Trust, “Rebuilding Enterprises through Workspaces and
Market Infrastructure Development” Update, Nairobi, August 2008.

Kona E.S. and Kantai R., “ Development of Micro Finance Peacebuilding
Initiative:Reprot of Findings”, AMFI, Nairobi, August 2008.

Mburu B., “Impact of Post Election Violence on the Kenyan Dairy
Industry”, Nairobi, February 2008

Mbandi A., Agriculture / Rural Development Donor Group Meeting Sector
Assessments – Post Election Violence Impact , Nairobi, 4 March 2008, GTZ

Ministry of Trade and Industry, Presentation on “Private Sector
Development Strategy and Post Election Emergency Business Recovery”,
March 2008.

Office of the United Nations Humanitarian Coordinator in Kenya,
HUMANITARIAN UPDATE vol. July 2008, Nairobi.

Private Sector Donor Group Kenya, “ Report on Post Election Crisis
Damage and Needs Assessments” , Draft, Nairobi, April 2008.

Research International and Fit Resources Reconstruction of The Agricultural
Sector, April 2008.

The Tourism Trust Fund, “Report on the Impact of Post Election Violence
on TTF Funded Community Based Programmes”, September 2008, Nairobi.

UNDP, “Return and Recovery: Concept Paper”, Nairobi, October 2008

World Bank, “Kenya: Economic Impact of the Political Crisis in Kenya
2008 and Beyond”, a Working Draft, April 2008.

INTERVIEWS (Face to Face and Over the Phone)

Raphael Mwai, PSDS, Ministry of Trade
Joseph Njeru, MSME Dept., Ministry of Trade
Samuel Otieno, Internal Trade, Ministry if Trade
Isaac Kamande, Ministry of Youth Affairs

Donors, MFIs and MSE Support NGOs

Pharesh Ratego, USAID
Susan Kaaria, Ford Foundation
Kim Kristmoen, Danish Embassy
Bernard Leflaive, Early Recovery and Food Security Cluster, UNDP

James Mutonyi, Country Coordinator, CNFA/AGMARK
Veronique Su, Regional Director, Swisscontact
David Knopp, Kenya Business Development Services
Julius Kitheka, World Bank and GoK MSME Project Manager
Mehrdad Ehsani, SNV South Rift Portfolio, Nairobi
Tito Arunga, SNV, Eldoret
Steve Collins, Maize Development Program,ACDI-VOCA
Harun Baiya, SITE
David Odongo, Land o Lakes
Eberhard Krain, GTZ-PSDA

Benjamin Nkungi, AMFI
David Cracknell, MicroSave
David Ferrand, Financial Services Deepening Trust
Ann Mutahi, Jitegemee Trust
Jeff Njagi, MESP Trust
James Mwangi and Esther Muriuri, Equity Bank
James Kimuyu, Cooperative Bank of Kenya
Aleke Dondo, K-Rep Development Agency , Nairobi
David Otieno, Africa Now, Kisumu
Tom Were and Constantine Kandie, Kenya Gatsby Trust
Sam Kuona, Consultant, Peace and Conflict Resolution

Humanitarian Agencies

Massimo Altimari, Catholic Relief Services, Nairobi and Eldoret
Father Charles Lukati and Pares Koech, Microfinance Officer,
Catholic Diocese of Eldoret
Sam Kuona, Consultant, Peace and Conflict Resolution

Private Sector Agencies and MSE Associations

Richard Muteti, Federation of Jua Kali Associations
John Kihiu, Kenya National Hawkers Association
Evalyne Wanyama, Kenya Alliance of Street Vendors and Informal Traders
Mary Agalo, Kibuye Market Womens Association, Kisumu

Machira Gichohi and Paul Cherono, Kenya Dairy Board
David Nyameino, Cereal Growers Association
Sam Mwaura , Kenya Private Sector Alliance, KEPSA


Description: How Is Are Small Businesses Affected from the Credit Crisis document sample