Yet, ‘traditional’ financial services rarely reach small-scale rural agricultural enterprises as the costs of delivering financial services to fragmented small businesses are generally too high, reducing their access to credit and possibilities of investment.
Rafiki Microfinance Bank is a microfinance institution which widens financial access for low-income communities, becoming a key catalyser of their empowerment and progress out of poverty. The Kenyan bank provides lines of credit to businesses, supporting the country’s private sector to scale-up while generating new wealth opportunities and creating jobs.
Rafiki targets those operating in the gap between micro-enterprises and large or medium enterprises, called the “missing middle,” whose primary lending spread is between USD 1,000 and 350,000.
In order to address the difficulties farmers face in accessing credit, Rafiki Microfinance Bank is providing financial services to 54,000 smallholder dairy farmers, 40 percent of whom are women, through a value chain financing project.
Motivated by the benefits brought by collecting social impact data as a mechanism to both prove and attribute social and environmental impact, Rafiki Microfinance Bank was interested in gathering reliable data from its customers in order to align its product and service offerings to changing customer needs.
In light of the growing competition, Rafiki Microfinance Bank recognized the importance of creating market-driven financial products and services. Rafiki Microfinance Bank joined Business Call to Action’s Impact Champions Programme via BCtA’s Impact Lab, in order to equip staff with the necessary tools for monitoring and evaluating the impact of the bank’s initiatives, especially in the agribusiness space.
The Impact Lab provides an end-to-end impact management solution for inclusive businesses. It helps companies develop a Sustainable Development Goals (SGDs)-focused impact framework for data collection, analysis and reporting, and is designed to help companies drive business value while delivering impact by understanding, proving, and improving their contributions to the SDGs.
Selected BCtA member companies partake in the Impact Champions Programme to undertake impact measurement and management with an SDGs lens, where they are provided with training and hands-on support from BCtA.
As a result of partaking in the Impact Champions Programme, Rafiki’s staff got a deep understanding of impact creation, monitoring, measurement and evaluation processes associated with the microfinance bank’s initiatives. The staff recognized the impact of agribusiness products and partnerships with smallholder farmers, and how best to align products and services to customer needs. The data collected by the field survey provided insights and feedback in terms of customer preferences towards features of existing products and services. Several concerns were raised by customers in terms of product offerings and relevance to their needs. Moreover, insights from customers demonstrated that the company’s delivery channels need readjustment. These two issues will be considered by management and Rafiki’s product offerings will be adapted based on these customer inputs.
The study’s findings will be invaluable for determining service delivery channels, strategic operational decisions and customer engagement methods, states the organization.
Read about Rafiki Microfinance Bank's impact measurement and management journey by downloading the case study below.