KAZOZA Financial Guarantee Fund

KAZOZA has put in place a Revolving Fund with an objective to improve access to credit for the least privileged entrepreneurs in Burundi. This improved access to credit will spur business and job creation.

Unemployment remains a major challenge in Burundi especially among the young population. Over the years, the Burundian economy has failed to create opportunities for the increasing number of job-seekers emerging from the expanding education system and for people living in rural areas. Additionally, it is extremely difficult for young entrepreneurs to access credit as a means of starting or expanding a business venture. Youth works against them as they are often unable to provide the heavy collateral required by local financial institutions to secure a loan.

Kazoza Revolving Fund intends to address this issue and effectively alleviate a serious obstacle to credit by providing the least advantaged entrepreneurs with loan guarantees.

Implementation of the KAZOZA Revolving Fund

Currently, the KAZOZA Revolving Fund is implemented through the services provided by KIVA.

KIVA is a non-profit organization based in California whose mission is to connect people through lending to alleviate poverty. Leveraging the Internet and a worldwide network of microfinance institutions, KIVA lets individuals lend funds to help create opportunities around the world. 

In Burundi, TURAME Community Finance is the official local partner of KIVA in charge of accepting loan applications, conducting credit analysis and disbursement of funds.

Groups currently financed by KAZOZA

Currently, $31,575 has been lent to 42 different groups comprised of more than 800 people. Members of these groups are involved in different business activities ranging from retail to construction material as well as agriculture.

The process...
  1. Applications are submitted to TURAME Community Finance by borrowers wishing to obtain a loan. TURAME conducts the credit analysis and determines the eligible borrowers.
  2. Details of approved loan application, such as, description of the activities, loan amount, repayment schedule, are posted by TURAME on KIVA website (www.kiva.org).
  3. KAZOZA conducts an analysis of the posted loan applications and decides which group to finance using a KAZOZA designed evaluation tool and decision process.
  4. Once a decision has been reached, KAZOZA disburse the monies to KIVA, which forward the funds to TURAME.
  5. At the end of the loan term or the agreed repayment schedule, the borrowers repay their loan to TURAME, which forward the funds to KIVA and then credited back to KAZOZA.
Benefits of KAZOZA Revolving Fund

The financial guarantee provided through the KAZOZA Revolving Fund allows borrowers to access funding in order to launch revenue generating activities and projects or to increase their capital.
Increasing their capital allows higher returns from new investment. The increased revenue supports borrowers’ families, pays school for children, health care for the family and enables savings.

For example:
Adidja is a part of one of the groups funded through KAZOZA Revolving Fund. She lives in Bujumbura. She is 29 and married to Libère, a cook. They have 4 children together between the ages of 4 and 12, three of whom attend school. She has one more child she cares for who attends school. She has been selling palm oil for 10 years.
With the loan she secured, she is going to increase her capital and buy a large quantity of palm oil to resell to earn a profit.
In the coming years, she would like to build her own house on her own plot of land and send her children to school until completion.