Microfinance
Microfinance
Microfinance has been proven to be an effective tool to reduce poverty in the developing countries like Kenya. However, many institutions have struggled to balance between social aspect and their sustainability.
Hazina believes economic development begins with community development and is only sustainable if it comes from and is supported by the members of these communities, we form a group of 10 to 20 individuals. Upon establishing the possibility of working with the group, based on their cohesiveness, commitment to group constitution and our policies, we proceed to prepare the group over a period of minimum 4 weeks before they can access loans. Upon completion of the orientation training period, Hazina lends to the individuals within the group under the co-guaranteed mechanism
We operate on an Islamic Shariah based model where we give our loans in line with the principles of the Shariah using the joint liability group methodology and thus we do not collect any conventional collateral other than the group guarantee. These members must be well known to each other, to avoid instances of default by a member and, must have a common purpose to access financial services. This methodology derives from the meaning of the word ‘solidarity’ where members unite under a common purpose and for a group. It is a minimalist approach to providing credit and financial services to the small and micro entrepreneurs.
