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As a result of post-election violence (PEV), a large number of small-scale farming households in the Endebess area of Kwanza District were displaced. In the process of displacement and violence, households lost key productive assets and structures as well as savings and access to income.
This report presents the results of a pilot of the nascent EMMA approach with two main purposes: better understanding critical market systems for the population directly and indirectly affected by PEV, and gaining experience that could be used to improve the toolkit itself. The study examined the impact of the crisis on the area's microfinance market system in order to evaluate the appropriateness of a cash-based response to support poor, small-scale farming households and to identify any necessary additional market support interventions. Target groups of this study include poor small-scale farmers who were driven deeper into debt as a result of the PEV.
In Endebess, credit is frequently taken to support small-scale agricultural production. In the formal credit market system, most households borrow in groups from Kenya Faulu and Kenya Women’s Finance Trust. Generally, loans are repaid within a year. Interest payments are paid weekly or monthly, and the lump sum borrowed is repaid at the end of the loan period. Many households also rely on informal credit in the form of merry-go-rounds and table banking. Both credit systems involve rely frequent gatherings during which participating households contribute a sum of money.
After the PEV, some households are ready to restart their businesses, and others are waiting until they get home and resettled. The amount required to restart a business depends on the activity and where the goods have to be purchased, with an average of 30-50,000 Ksh. If such loan were provided, it would take about two months for the business to pick up and six months for it to stabilize.
This assessment recommends the implementation of Cash-for-Work programs for poor, small-scale farming households and cash grants for business re-startup for poor households who are excluded from the government debt relief programs, accompanied by advocacy to government and microfinance institutions.