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Kenya ICT board learns tough lessons from digital villages project

Rebecca Wanjiku | April 30, 2013
Six years ago, the World Bank teamed up with the Kenyan government to launch an ambitious digital villages project, commonly known as "Pasha."

CW: What is going to be different next time the funds are available?

VK: The new digital villages model we want to adopt is not the generic model but the entrepreneurial model; whereby you actually borrow money and put it in business. We have entered into an arrangement with Family Bank as the financial intermediary to provide the loans at 10 percent interest rate, which is lower than current market rates of 18 percent. Then the entrepreneur is expected to come up with a bouquet of services depending on the area of operation and its uniqueness.

Previously, the model was generic and assumed what works in one area will work in another. This time we will be offering training in entrepreneurship, marketing, book keeping and a bit of technology. We are going to work with partners to facilitate this. In the digital villages we need two things; a consultant to run it, and a tender and a financial Institution to administer the funds, in the normal way that you go to the bank, get a loan and you have to repay.

CW: For the Pashas that seem to be working, what are they doing different?

VK: The entrepreneurs who provide IT services combined with non-IT services seem to be doing very well. For instance, there is a Pasha in Ruiru town (30 kilometers out of Nairobi) that provides IT services as well as agency banking services, where they provide services on behalf of Equity bank. This brings in foot traffic that can also take advantage of other services provided. The variety of services has allowed the business owner to make more money; instead of someone spending ten shillings, they can spend 20 or 30 shillings depending on services provided and the efficiency. For the businesses that provide tech support and maintenance, they are able to make more money because they can stay in business longer hours and can serve more clients. For instance, the last time I visited a cyber cafe in Kangudo in Eastern Province, I found that out of eight machines only three were working and upon further scrutiny, we found that part of the problem is simple things like dust, viruses, routine support and maintenance.

CW: What are some of the lessons that the board has learned?

VK: One of the positive lessons we learned was that businesses led by women were more sustainable because women were more conscious of commitments and expectations. For instance, the women-ran businesses in Kitengela (40 km from Nairobi) and Laikipia (in the Rift Valley province) are some of the best-performing and they have given the right information compared to other cases, mainly male-led businesses, where we have received misleading information and the commitment to repay isn't there.


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