Kenya : Uniting resources, transforming lives and amplifying dreams through community-built financing mechanism

Solidarity Funds for Development (SOFDEV) is a unique community-based microfinance model that promotes local savings, credit access, and self-managed financial services. INADES-Formation Kenya supports six SOFDEV that is Kathama in Machakos County, Kauma, Musengo and Yatta Kwa Vonza in Kitui County and Ngaamba and Yikivomwe in Makueni County.

One of the shining examples is Kauma SOFDEV, which stands out as a leading unit among the six supported by INADES-Formation Kenya, showing steady growth and strong community impact.

Empowering local communities through local financing solutions

In the quiet village of Kauma, Kitui County, a community-led journey toward financial inclusion began in 2009. The goal was simple yet powerful: to create a trustworthy, accessible, and locally governed financial system that responds to the unique needs of the people. The solution came in the form of SOFDEV — the Solidarity Fund for Development — introduced by INADES-Formation Kenya as a model for sustainable rural financing; tested and working model in seven African countries.

Laying the foundation : mobilizing the community

INADES-Formation Kenya launched the initiative by working closely with the local administration. A baraza (public forum) was held, bringing together residents and leaders to discuss the concept. The response was positive, and recruitment for membership began. Interested community members agreed to contribute 50 shillings as registration fee and 500 shillings as share capital. Out of 1,018 interested individuals, 354 fully committed, forming the core that would launch Kauma SOFDEV in 2012.

Building capacity : Equipping members for financial stewardship

INADES-Formation Kenya provided a series of capacity-building workshops focused on financial literacy, cooperative governance, loan management, and community accountability. These trainings ensured that both the leadership and membership of Kauma SOFDEV were prepared to manage funds responsibly and transparently. With improved skills and confidence, the group opened a bank account with Equity Bank in 2011 and piloted its first loan disbursement program. Under the guidance of Mr. Benard Kitonyi, then Managing Director of INADES-Formation Kenya, members accessed loans of up to Ksh. 20,000 at 1% interest per month. With full repayments and no major defaults, Kauma SOFDEV recorded its first profit of Ksh. 48,000.

Fostering trust and ownership through profit sharing

Following the initial success, Kauma SOFDEV declared dividends at Ksh. 20 per share, signaling transparency and building member trust. This move cemented a strong culture of ownership and commitment. Membership continued to grow steadily — from 354 in 2012, to 799 in 2022, and 906 active members by June 2025, an indication that trust and shared value can drive community prosperity.

Investing in infrastructure : a permanent work station to thrive and progress

In a bold, united decision, members agreed to redirect future dividends toward the construction of a permanent office block. Over three years, they raised Ksh. 1.6 million, and with support by INADES-Formation Kenya through cost sharing of iron sheets and doors. The completed structure now stands as a symbol of collective resilience, sacrifice, and long-term vision.

Ongoing support and strategic capacity development

INADES-Formation Kenya remained actively Involved in training and capacity building of members in marketing strategies which led to improved member retention and recruitment.

Further trainings in accounting and records management helped professionalizing operations which also led to the creation of a dedicated Education Committee, that continues to lead financial literacy efforts in the Community.

Expanding services to meet community needs

Today, Kauma SOFDEV provides a diverse portfolio of financial services, designed to address both individual and group needs :

• Current Savings :

these are the regular contributions made by members over time, which are kept safely and remain accessible when needed. These savings provide a flexible financial cushion for both planned expenses and unexpected emergencies. Members, including group affiliates, contribute regularly throughout the year and can access their current savings at their convenience, ensuring reliable support for both planned needs—like school fees and food—and unexpected emergencies.

• Fixed deposits for long-term goals :

Members enjoy a 0.5% annual return on funds saved under fixed terms — promoting discipline in financial planning.

• Loan access for economic empowerment :

Loans of up to Ksh. 150,000 per member are issued every first Friday of the month. In this financial year (2024-2025), total loans issued amounted to Ksh. 7,613,637   with total savings reaching Ksh. 5,952,905 million. To manage risks, the Education Committee works on loan follow-up, member counseling, and — if need be engaging local administration for dispute resolution.

Promoting transparent governance and member participation

Kauma SOFDEV is governed by a structured committee system that ensures transparency, fairness, and community representation:

• Coordination committee: Oversees strategic leadership (Chairperson and Secretary)
• Operations committee: Manages finances and transactions (Treasurer and two assistants)
• Education Committee: Drives member education and loan follow-up (Eleven or more members).
• Supervisory Committee: Provides oversight and audits (Two or more members) Elections are held every three years, reinforcing democratic governance. While the office operates physically every Friday, the introduction of Paybill services has added a layer of convenience — blending technology with grassroots service.

Transforming lives, one member at a time

Kauma SOFDEV has become more than a village bank. It is a pillar of financial resilience, a space for learning, and a platform for inclusive community development. Women’s groups have accessed capital for small businesses, families have secured school fees, and individuals now plan their futures with confidence. This is proof that community-driven models work — when people come together around shared values, the result is not just financial inclusion, but social transformation.

A good financial health

The study of financial information reveals that there has been a surplus in the last 5 years, and this is an indicator of the financial health of the entity. The unit has a good working capital. On liquidity and the ability to meet the loans requested, the committee confirmed that for the 6 years 2020 to 2025, they were able to meet all the loan demands. The committee noted that they vet the loan application monthly.

INADES-FORMATION Kenya