June 7th, 2021

Letter from the CEO,

It is hard to believe it has been more than a year since the first COVID-19 case was confirmed in Kenya, forcing us to make many unanticipated adjustments about the way we worked.

Most significantly, we had to shift to remote working. One year down the line, I am immensely proud of our team for staying the course so far and maintaining our momentum despite the disruption of COVID-19.

Like many other organisations, we found our work greatly influenced by the pandemic. We have worked closely with partners and stakeholders over this last year to navigate the challenges of COVID-19 and generate research and data that could be shared with decision-makers to support their efforts towards inclusive economic recovery.

One of the first things we did was to conduct the ‘Kenya COVID-19 Diaries,’ a series of blogs and other outputs to help understand the impact of the pandemic on low-income Kenyans. We encountered numerous stories of heartbreak to say the least. The pandemic has decimated many micro, small and medium enterprises (MSMEs); many casual labourers no longer have work; education has faced interruptions; and tourism livelihoods have all but disappeared. Households shared stories of using their savings to store up food and supplies to help them deal with the risk and how the economic slowdown and loss of local remittances were hurting their ability to manage day today. Although some were able to access credit, many informal options like shopkeeper credit dried up. And although we knew that the pandemic would be hard on women, we did not anticipate just how gendered the impact would be.

To complement this more qualitative look at the pandemic, we also analysed market data to highlight the diverse impacts on the financial sector and broader economy. This data is contained in the ‘COVID-19 Econ Data portal’, which is accessible from our website. Another early initiative was to undertake a scenario-mapping process, not to predict, but to develop plausible scenarios of economic consequences of COVID-19. This was a helpful frame for considering the differentiated impacts of the pandemic, including on gender and the potentially growing digital divide. And in an effort to understand how Kenya is faring in comparison to other countries on the continent, we participated in a comparative ‘COVID-19 tracker survey’ across Kenya, Nigeria, Rwanda, South Africa and Uganda. In Northern Kenya, our building livelihoods’ project in Marsabit found ways to pivot the programme to serve the participants but also found that the project had already helped prepare the families to be more resilient in the face of the pandemic. Building on FSD Kenya’s long support for social safety nets in Kenya, we worked with public and private sector players to encourage cash transfer programmes to support households across the country during the pandemic, including a small pilot to deliver cash grants to parents of needy children and to youth microentrepreneurs. One experience that stands out to me was my August visit with the Gede Financial Service Association (FSA), which has struggled to restructure their one branch, their engagement with customers and the digitisation of their savings and loan collections. Their members have been very hard hit by the drop in tourism at the Coast and were only beginning to recover their businesses.

As we look back on this difficult year, we face the current reality and future with sobriety. As we focus on building back better, it is also important to build in ways that prepare for the next crisis and to apply approaches that ensure inclusiveness and resilience that are adaptable to future shocks when they do occur. There is also growing concern about how this pandemic could further exacerbate the divergence between the haves and the have-nots, leaving many struggling to survive, much less thrive. We must find ways to ensure that the most vulnerable – children, the elderly, people with disabilities, and women – do not fall through the cracks. Although the first vaccines have now arrived in Kenya, we are still a long way off from national coverage.

We believe that inclusive finance—which to us means having a financial system that delivers useful, affordable, and trustworthy financial solutions to low-income households and MSMEs in ways that help them manage day to day, deal with risk and invest in the future—will play a crucial role in the country’s inclusive economic recovery. At FSD Kenya, we are committed to running this marathon alongside others, building on lessons from the past year to seek ways for inclusive finance to be part of the solution to help see Kenya through this pandemic as well as future and longer-term crises such as climate change.

Tamara Cook
Chief Executive Officer

Download the FSD Kenya Annual Report 2020

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