Po Alila

Informal Credit and Rural Small Enterprises Growth: A Local-level Perspective on Sustainable development in Vihiga, Western Kenya

The broad question addressed in this analysis is the role of small enterprises in rural sustainable development. The focus is on the contributions of informal credit in light of the dismal performance of formal credit to which the majority of rural dwellers, specifically small enterprise owners, do not have access. The data collected from Vihiga, Western Kenya, using the rural rapid assessment method, exposes an almost complete lack of interaction of small enterprise owners with formal institutions of credit such as commercial banks, nonbank financial institutions, co-operatives, etc. The only exception is a recent government special credit program, Rural Enterprise Fund, designed along the lines of cheap credit of the 1970s, but all the same significant in terms of filling the void. It is informal credit, from borrowing and lending between individuals and from groups, such as Rotating Savings and Credit Associations (ROSCAs), which has proved to be the determining factor in the origins and growth of small enterprises in the rural sector. The owners of these enterprises confirm that they have benefited both economically and socially. However, they report problems of inaccessible and insufficient credit that need to be addressed at policy level.

Book Reviews : Thomas Spear, Mountain Farmers: Moral Economies of Land and Agricultural Development in Arusha and Meru. (Berkeley: University of California Press, 1997), x + 262 pp. Cloth,

The thinking and approaches to development in Africa have undergone major revisions, especially in the last three decades. These changes in perceptions can be traced to the combined effect of revelations and subsequent recognition of African realities. The recognition has been due first to development practice lessons, and second to the accumulation of knowledge from indepth multi-disciplinary research. The book under review on moral economies of land and agricultural development of Arusha and Meru farmers, focusing on the role of culture in socio-economic change, is a good case in point. The broad perspective in the book of continuity and change subsumes the general trend of variations in ideas and practices. The book in a nutshell is about &dquo;the continuity of tradition and its transformation&dquo; (p. 2). The analysis is undertaken in a local context

48; Paperback

The broad question addressed in this analysis is the role of small enterprises in rural sustainable development. The focus is on the contributions of informal credit in light of the dismal performance of formal credit to which the majority of rural dwellers, specifically small enterprise owners, do not have access. The data collected from Vihiga, Western Kenya, using the rural rapid assessment method, exposes an almost complete lack of interaction of small enterprise owners with formal institutions of credit such as commercial banks, nonbank financial institutions, co-operatives, etc. The only exception is a recent government special credit program, Rural Enterprise Fund, designed along the lines of cheap credit of the 1970s, but all the same significant in terms of filling the void. It is informal credit, from borrowing and lending between individuals and from groups, such as Rotating Savings and Credit Associations (ROSCAs), which has proved to be the determining factor in the origins and growth of small enterprises in the rural sector. The owners of these enterprises confirm that they have benefited both economically and socially. However, they report problems of inaccessible and insufficient credit that need to be addressed at policy level.