K-REP Bank: Alleviating poverty through micro-finance
K-REP Bank, which started operations in 1999, is among the more successful microfinance institutions. It offers diverse products and services, including microcredit facilities to low-income people, individual loans, wholesale loans to microfinance providers, deposit facilities, letters of credit and bank guarantees. The microcredit loans, based on the Grameen Bank’s group-lending model, fall into three categories. A group progresses through the categories, towards readiness for commercial bank loans. K-REP disbursed 69,000 loans in 2005, reporting healthy financial performance and a return on equity between 4% and 12%. The case highlights the challenges of this model and K-REP Bank’s innovations to respond. It also spotlights on some typical K-REP customers.
Citation: Karugu, Winifred & Kanyagia, Diane N. "K-REP Bank: Alleviating Poverty through Micro-Finance." GIM Case Study No. A023. New York: United Nations Development Programme, 2008