Rosemary Kantai and Lucy Nguru are passionate about micro finance and although modest about their careers they have left an indelible mark on the industry.
They both spent over a decade of their working lives helping to build the Kenya Women Finance Trust (KWFT), into one of the largest microfinance institutions with a country wide network and in the process improved the lives of thousands of women.
Even after leaving salaried employment the two women are still deeply involved in micro finance through the Mwangaza Business Development Services, a consultancy they founded with two other partners.
Ms Nguru says what drives them is a mission to change other people's lives and the tangible results they see every day.
"The best moments are when a when a women tells me 'I didn't know I could take and repay a loan'," she says. "You start out thinking that Sh2,000 is a little money until you lend it out and someone does so much and changes so much in their life."
Ms Kantai, who worked her way up the career ladder at KWFT from credit manager to general manager operations ten years later, says that a career in microfinance though rewarding requires tremendous commitment and sacrifice.
"Microfinance is addictive and draining. If you don't love it you won't succeed," she says.
At KWFT, Ms Kantai was instrumental in rebuilding the institution, introducing new products, designing operational manuals and staff development. By the time she left in June 2006, the institution had over 100,000 clients and posting net surpluses of over Sh100 million with a presence in nearly all parts of the country.
Today, the microfinance industry in Kenya has come of age with more than 50 players offering mainly loans and savings. Two of the largest institutions - Equity and K-Rep - have since transformed into commercial banks with the rest operating as MFIs, Trusts or NGOs.
In addition to K-Rep and Equity, the other large players with country wide operations are KWFT, Faulu and SMEP.
MFIs provide financial services to the largest segment of the Kenyan market consisting of individuals, groups and micro businesses.
These small enterprises constitute 96 per cent of all businesses in the country - approximately 1.6 million enterprises according to data from the Ministry of Trade and Industry. They collectively employ three quarters of the labour force - 5.1 million people - and contribute 20 per cent of Kenya's gross domestic product (GDP).
But despite the large pool of clients, growth of MFIs is being hindered by lack of training and the legal and regulatory environment which does not allow them to take deposits for onward lending. Because of their focus on savings MFIs have accumulated huge funds which they are forced to park in commercial banks and source funds for lending from the same commercial banks or donors, making their loans more expensive.
"This has created a big debate about whether the existing policies are shifting resources from the poor to the rich and undermining the very reasons for the existence of MFIs which is to uplift the poor who don't not have access to other sources of finance," says Ms Kantai.
The present predicament that MFIs are facing has its roots in the history of the industry.
"In the 1980s the focus was on small enterprise development where loans were given together with free training. But come the 1990s there was a shift as MFIs began to think of sustainability and the cost of every shilling lent out. It then became purely savings and credit and if a client wanted training, now they had to pay for it," she says.
MFIs also began to redesign their systems to achieve outreach and expand their client base because lending to just a few thousand people is very expensive.
"Accountability became a key issue and MFIs decentralised their operations to make them cheaper by going to the countryside where the bulk of customers were.
Group lending also helped to reduce defaults on loans because of peer pressure. MFIs also trained their staff to shift the previous mindset that clients were charity cases. It became all about running businesses profitably," says Ms Nguru.
The results are visible today in the huge savings that MFIs have been able to mobilise but without a policy allowing them to use deposits effectively for members' benefits while commercial banks where these funds are often kept use them to generate profits for themselves.
This situation peaked around year 2000 and also coincided with the inability of donors to meet the MFIs demand for credit leading to the entry of second tier financiers like Jitegemee to try and bridge the gap. It is against this background that the industry sought legal reforms leading to the enactment of the Microfinance Bill which would among other things allow MFIs to take deposits.
"The Act has been passed but it's not operational yet because prudential guidelines have not been finalised," says Ms Kantai.
When this happens MFIs will be poised to compete with commercial banks by retaining clients who graduate from micro businesses to SME level and who because of higher capital requirements are often forced to seek money from banks.
"This is where competition will be highest because banks will want to recruit them as clients and MFIs will want to hold onto them," says Ms Kantai.
But even with banks increasingly encroaching onto the traditional turf of MFIs, Ms Nguru says the latter's service record will prevail.
"Banks are unlikely to emulate the personalised service offered by MFIs. Even with a large branch network, banks still expect clients to come to them whereas MFIs learnt long ago to take their services to clients including their homes. For banks to change would require a complete cultural shift," says Ms Nguru.