As I will soon begin to assemble the consumer education manual, I have begun to meet with organizations dedicated to consumer education in Kenya to discuss what should and should not be included in the content. The goal of the manual is to create an easily understand and accessible education tool to contribute to the transparency of the microfinance industry, prevent predatory lending and reduce ill-informed financial decisions among the most vulnerable populations in Kenya.
At these meetings, I share with consumer organizations my ideas for the manual and then I ask for suggestions to improve the content in order to serve consumers with a practical and effective tool. Such collaboration is an important preparation for the manual as consumer organizations will be one of the primary users in efforts to educate Kenyan consumers through trainings, workshops or education initiatives.
The representatives from organizations interested in using the manual in their programs include Consumers Unity and Trust Society, MicroJustice4All, Consumers Federation of Kenya and the National Coalition for Informal Sector Society. I would like to thank each of these organizations for showing interest in my work and helping to improve upon it.
Through meetings with such organizations, I have created an updated outline for the upcoming manual.
Outline for the Upcoming Consumer Financial Education Manual:
-LOAN PRODUCTS: A list and description of the loan procedures, terms and requirements of microfinance programs in Kenya. Business loan products of Faulu Kenya Limited, Jamii Bora Bank, K-Rep Bank, Kenyan Women Finance Trust Limited, Opportunity Kenya, Rafiki Limited and Women Enterprise Fund will be featured to create transparency for borrowers often unsure of the terms of their lenders. Sample of loan contracts from several of these institutions will be included in the manual as well.
-RESOURCES: Resources that can assist microfinance clients with addressing their questions and grievances, specifically the regulation authorities in Kenya, legal aid clinics and consumer advocacy organizations.
-QUESTIONS: Questions that all borrowers should ask their lenders before applying for a loan.
-TERMS: Glossary of terminology used by the microfinance industry, specifically language used in loan agreements.
-RIGHTS: Summary of consumer rights in Kenya and legislation regulating activities of the Kenyan microfinance industry.
-CONSEQUENCES OF DEFAULT: Summary of the consequences that result if a borrower defaults, including the legal requirements for the repossession and auctioning of chattel (securities).
-EXPERIENCES: Over sixty microfinance borrowers have been interviewed to understand what information should be included in the manual, including what borrowers do and do not understand about their participation in microfinance. This will allow current borrowers the opportunity to contribute to the content and structure of the manual along with the education of their peers.
If a reader of this blog post has any suggestions for the manual, please feel free to contract me at hermanl [at] berkeley [dot] edu
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