KIBERA, 13 April 2010 (IRIN) - Josephine Awuor, 34, always looks forward to her turn to receive "merry-go-round" contributions from fellow members of Msingi Bora (Good Foundation), a micro-finance group she belongs to in Kibera, Nairobi's largest slum.

Meeting weekly, the 23 Msingi Bora members each contribute 50 shillings (60 US cents), which is pooled for members to take loans from. At each meeting, the members also contribute 20 shillings (26 US cents) each - to be given to one member in what they term their "merry-go-round" as they draw lots to determine the order of receiving the money.

"Numbers are written on small pieces of paper and folded and each member picks one; the number you get determines your position in the order of receiving the merry-go-round money," Awuor said. "Previously, supporting myself and my four children was really difficult; things like school fees, food and rent were hard to get but since I joined Msingi Bora, things are looking up," Josephine said.

Without a steady income - she mostly survives by doing casual labour in more affluent residential areas neighbouring Kibera - Awuor uses the merry-go-round money to buy food and other household items.

Loans from Msingi Bora, which range from 500 shillings ($6.5) upwards, have enabled Awuor, a single mother of four, to put her children in school. Her eldest child is due to sit the Kenya Certificate of Secondary Education this year and another one is in class eight, due to sit the Kenya Certificate of Primary Education at the end of the year.

"Unbanked"

With the vast majority of the hundreds of thousands of people who live in Kibera lacking any kind of formal banking facilities, micro-finance groups such as Msingi Bora fill the gap, providing members with credit they would otherwise not have access to.

While some groups are initiated and established by the slum dwellers on their own, some groups, such as Msingi Bora, have the backing of national and international organizations that provide training and psychosocial support.

CARE International, through a community-based organization known as the Kibera Slum Education Programme, supports Msingi Bora and dozens of other such groups by providing training, capacity-building, resource mobilization as well as sub-granting for projects such as the education and care of orphaned and vulnerable children.

"CARE has found that the answer is not necessarily to bring banks or microfinance institutions to the poor, but instead enable and empower poor women to set up informal saving and loan groups," Helene Gayle, the president and chief executive officer of CARE USA, said on 10 April during a visit to Kibera.

According to CARE, members of its Village Savings and Loan Associations receive intensive money management training before their groups begin transacting loan operations. Most members of these groups are women, often earning less than $2 a day.

Gayle said the savings and loans projects give women in slums economic options they often lack and enable them to afford health care, take their children to school and put food on the table.

"Although such village savings and loan programmes help to make a difference in the lives of women and children, there is room for improvement as more and more people should have access to such programmes in order to have an even greater impact," she said. "The projects in Kibera illustrate that we can really make a difference in peoples' lives."

CARE also supports economic empowerment self-help groups - comprising male and female members - such as the Haki Self Help Group that operates from the Kibera Hawkers Market, making ornaments from bones.

Turning waste into profit

"We have turned waste into profit by working with the bones discarded after meals; we work with cow, camel and goat bones to make a lot of beautiful ornaments such as necklaces and bangles," Charles Ogutu, head of the Haki Self Help Group, told IRIN on 10 April. "Our main challenge is the market for our produce; we have contacts with traders who come and buy from us and later resell on the tourist markets, but sometimes their orders are not enough."

Ogutu said the proceeds from the project are used for members' economic empowerment as well as the group's community projects, which include care-giving to orphaned and vulnerable children and a justice programme aimed at community reconciliation in the aftermath of the post-election violence that hit the slum in early 2008.

Lauren Hendricks, the executive director for CARE's Access Africa, told IRIN that since 1991, CARE has had savings and loans programmes in 21 countries, reaching 1.6 million people.

"Over this period, there has been significant improvement in household economy for those involved in the savings and loan programmes," Hendricks said. "As you know, one of the underlying causes of poor maternal health is lack of income for many women; we can combine group savings and loan programmes with others such as education so that we use resources more efficiently."