Kaya Kinondo Community Bank: a successful mechanism for empowering people

melckzedeck osore
Published: 26 January 2021
Last edited: 18 February 2021
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Kaya Kinondo Community Financial Services Association (KKCFSA) was established in 2003. It has over 2,000 members of which more than 25% are women. The Association has previously conducted community outreach on banking services supported by World Wildlife Fund for nature (WWF), National Bank of Kenya and Base Titanium Mining Company.  It provides loans at subsidized interest rates to community groups to undertake initiatives that protect the environment and improve livelihoods.


KKCFSA constructed a modern bank to improve effectiveness of providing timely micro credits. The Bank is enabling the community to access favourable loans hence encouraging them to reduce their financial dependency. It is also nurturing community's culture to save profits obtained from their economic activities. In 2016, KKCSA gave out loans of KES 18 million (USD 180,000) to 358 members. It is transforming Kinondoni Village into a modern self-sustaining economy.


East and South Africa
Scale of implementation
Buildings and facilities
Coastal forest
Marine and coastal ecosystems
Urban ecosystem and build environment
Access and benefit sharing
Ecosystem services
Fisheries and aquaculture
Forest Management
Gender mainstreaming
Habitat fragmentation and degradation
Indigenous people
Infrastructure maintenance
Local actors
Sustainable financing
Sustainable livelihoods
Traditional knowledge
Other theme
Community service
Land and Forest degradation
Loss of Biodiversity
Ecosystem loss
Unsustainable harvesting incl. Overfishing
Inefficient management of financial resources
Infrastructure development
Lack of access to long-term funding
Lack of alternative income opportunities
Lack of technical capacity
Lack of infrastructure
Unemployment / poverty
Sustainable development goals
SDG 1 – No poverty
SDG 5 – Gender equality
SDG 8 – Decent work and economic growth
SDG 9 – Industry, innovation and infrastructure
SDG 14 – Life below water
SDG 15 – Life on land
SDG 17 – Partnerships for the goals
Other targets
Aichi Targets: 1 Biodiversity sustainability
4 Sustainable production and comnsumption4
5 Degrdation of habitats
6 Sustainable fishing
14 Ecosystem Services
16 Women livelihoods
18 Participatory
Sendai Framework
Target 2: Reduce the number of affected people globally by 2030
Target 3: Reduce direct disaster economic loss in relation to GDP by 2030
Target 4: Reduce disaster damage to critical infrastructure and disruption of basic services, among them health and educational facilities, including through developing their resilience by 2030
Business engagement approach
Direct engagement with associations
Indirect through financial institutions
Indirect through government
Indirect through legal actors


Kinondo, Kwale, Kenya


  • Unsustainable use of natural resources due to financial dependency on fishing and hand-outs, and the lack of a clearly defined culture of saving profits.
  • Limited access to documentation on local environmental resources and their sound management – leading to environmental degradation.
  • Initially, high illiteracy rates among the members of the Association and community in general, impeded communication among them, and with partners.
  • Instability aggravated by lack of food security due to limited alternative livelihood opportunities.
  • Unreliable means of livelihood meant that local people survived from hand to mouth and could therefore not cultivate the culture of saving for a rainy day.
  • High interest rates of over 14% by commercial banks prevent local people from accessing loans.
  • Raising 10% cash, which was the conditional requirement for all applicants prior to receiving 90% grants from the World Bank fund through the Kenya Coastal Development Project (KCDP).


  • Individuals benefiting from loans.
  • Community based organizations, Women and Youth Groups.
  • Vulnerable and Marginalised Groups and Persons living with disabilities.
  • Traders, fishers, farmers, employees in various sectors.
  • Community run schools.

How do the building blocks interact?

Collaboration between community and partner organizations e.g. KMFRI, WWF, NBK, Base Titanium, Kwale County and National Government, has been key to ensure KKCSA works like a conventional bank, yet low on interest rates, affordable to all villagers. Above all, the ground was healthy to build on, since leaders have demonstrated the way for the common good, with respect to principles of transparency and rotating board members.


KMFRI has involved the Kinondo community in routine marine and coastal research especially on mangrove and fisheries. WWF has continually offered advice and built staff capacity on various aspects. Base Titanium arranges exchange visits and outreaches activities for KKCSA members to smoothly implement projects by traders, fishers, farmers and others. Members were initially taught banking procedures by NBK. Following devolution of Government, KKCSA now receives direct support from the Kwale County. More financial support comes from improved value chain (selling home made seaweeds products), income from tourism, paid visits by students, grants and from NGOs. Through National Government, it was possible for KCDP to provide HMP grant to construct and furnish the bank.


  • The financial independence has enhanced the resilience of the local people in times of crises e.g. during drought, the COVID-19 pandemic. The bank is diversifying services by offering loans to purchase bicycles and motorbikes in the thriving transport sector.
  • Livelihood of the local community is thriving because people can reliably obtain soft loans to invest in fishing, agriculture, tourism, co-management of forests and cultural sites.
  • Enhanced saving culture of the people and improved infrastructure in Kinondo and the wider Msambweni Ward adjacent areas.
  • Defaulting loan repayment is drastically minimised because issuance is usually through groups of shareholders who guarantee one another. Therefore, group members comes to the rescue of another to avoid defaulting.
  • Literacy rates have risen drastically due to the improved livelihood of the community enabling them to secure affordable loans for paying school fees timely and regularly.
  • Youth are gaining practical experience and knowledge in the banking sector. Plans are also underway to diversify clients by targeting the youth.
  • Empowerment of the people of Kinondo and its environs.
  • Plans are underway to replicate the bank in the neighbouring sub-county of Lungalunga.
  • Through partnership with BaseTitanium, an Memorandum of Undertanding (MoU) has been developed to target farmers in order to increase diversity of membership base


Joining modern knowledge from the youth with experience from elders


The community of Kaya Kinondo Village had a dream to progress in life and live a better, more fulfilling existence than their ancestors. Located within the touristic south coast area of Kenya, village people mainly obtain their livelihood from fishing, small scale farming, guiding tourists on the beach, trading, cutting mangroves and entertaining tourists in the beach hotels. They used to meet every evening under a tree to pool together their daily earnings. Once in a while, a member would borrow from the savings and repay when convenient. They realised that meeting under a tree was risky and unsustainable. So, they saved enough money to build a small house, which they called their Village Bank. Although the savings improved, this situation was still unsafe, and members had to carry home the collected money each evening.


In 2014, they heard about the Kenya Coastal Development Project (KCDP) funded by the World Bank and Government of Kenya. KCDP had a component known as Hazina ya Maendeleo ya Pwani (HMP), which funded community projects. They approached HMP with a proposal for a lasting solution - to build a modern village bank that would serve them and all community projects operating in the Kinondo Village and, eventually, the entire Kwale County. The youth, with their contemporary knowledge acquired from school and the elderly members with long term personal experience from their various occupations produced a proposal to build a self-sustaining modern village bank. The bank is transforming Kinondoni into a modern self-sustaining economy, which in 2016 gave loans of KES 18 million (USD 180,000) to 358 members. The youth have assisted in developing a strategic plan that aims to upgrade the bank into a Savings and Credit Cooperation Organization (SACCO).


This illustrates how a village economy upgraded from the shed of a tree, into a house then eventually to a modern bank, with the hope to transform into a SACCO.

Contributed by

Melckzedeck Osore Kenya Marine and Fisheries Research Institute (KMFRI)

Other contributors

Pwani University, Kwale, Kenya
Kisii University