IRIS (1998) correspondent investigated whether the rural women in western Kenya
had a boon or bane and whether charitable organizations were fleecing the poor
through exorbitant interest rates. The correspondent reported on women’s woes with
Women Enterprise Development Company Limited (WEDCO) in Siaya district.
WEDCO’s initial aim was to improve women’s living standards through economic
empowerment. The company was to give registered WGs soft loans through the village
banking approach method, which entail lending money by the groups to their members
to promote their businesses. The investigation revealed that Sega Town Women Group
(WG) who had repaid the loan they borrowed in two instalments had vowed that they
would never take another loan from WEDCO due to unfair terms. They argued that
WEDCO charged high interest rates that led borrowers to default. They also indicated
that WEDCO’s grace period was too short. Ukwala Urban WG considered WEDCO’s
scheme retrogressive since they were forced to sell their property to repay the loans. A
part from the above shortcomings, the borrowers from WEDCO complained about the
restrictions on what they were to invest in. For example, they were not allowed to
invest in the second hand clothes business. They argued that the seven weeks training
on revolving loan fund management, leadership and governance before loan
disbursement was inadequate. Other stringent conditions they were not happy with
included insurance and prosecution in case one defaults.