Making institutional cookstoves an affordable option for Kenyan schools | Source: by Rehema Kahurananga, GVEP International, (Includes video) 10 Sep 2012.
While many schools would like the opportunity to use improved institutional cookstoves, paying the initial cost can be prohibitive. GVEP is working on changing the situation in Kenya
The premise behind Kartech Agencies Limited is threefold: to ease the financial burden on Kenyan pockets, help preserve the environment and operate a successful business. “If a customer can be able to save at least half of their fuel budget, then that’s good business.” This is the opinion of Boniface Kario, Kartech’s founder and proprietor.
Since beginning this venture 11 years ago, Boniface has experienced a range of peaks and challenges operating as an individual player in the improved stoves market. However, the fact that this entrepreneur – a mechanical engineer by profession – has managed to stay in business this long indicates that his team are doing some things right. Boniface also attributes his connection with GVEP International as a valuable benefit to running his enterprise, particularly in being able to tap into additional institutional clients made possible through GVEP’s Loan Guarantee Fund.
Boniface, a 1995 graduate from the University of Nairobi, opted to start Kartech Agencies after gaining practical experience in a welding and metal works company. With personal savings of Ksh60, 000 (US$~750) he began his business with just one employee. Kartech now employs a staff of 17, including an accountant, a marketing manager and skilled labourers and produces cookstoves for institutional and domestic use. The enterprise is based in Umoja, a busy location in the outskirts of Nairobi common to many metal-works businesses. Boniface believes it is their commitment to quality that has kept them operational through the years. “We employ specialised artisans,” he explains. “If a part of the process has not been done right, it gets redone. We also offer a five-year warranty on our cookers.” They also offer periodic maintenance as a follow-up service and to ensure clients are satisfied.
Kartech is not a large operation and its humble appearance can be easily dismissed. However it fits within a critical sector of the Kenyan economy called jua kali, an informal industry made up mainly of micro SMEs that provide employment and contribute over 15% to the country’s GDP. Though considered the region’s powerhouse, Kenya is considered a developing country that is grappling with the challenges of becoming an industrialised nation which is why businesses such as Kartech play a vital role: they provide a source of livelihood and solutions to millions.
GVEP began to engage with Kartech as a supplier in 2011 with the aim of providing a way to help schools purchase institutional cookstoves through its Loan Guarantee Fund. At prices ranging from KSh65,000 for a 40 litre (~US$750) to KSh 230,000 (~US$2,700) for a 300 litre capacity cookstove, the upfront cost can be prohibitive for schools. With this in mind, GVEP has partnered with Unaitas SACCO (formerly known as Muramatti SACCO) a financial institution, Kartech and three other cookstove enterprises to help ease the burden of schools in purchasing stoves. Through this model each of the cookstove suppliers, Kartech included, can identify schools that wish to buy institutional stoves. Once appraised by Unaitas SACCO, the approved learning institution is then required to become a member of the SACCO and put a 30% deposit after which the funds for the total loan are disbursed to the supplier in two instalments. The school then repays Unaitas SACCO with GVEP covering part of the credit risk. After delivery a school has up to two years to make repayments which are followed up by Unaitas SACCO.
Mrs Muthoni is in the administration of Outspan Medical Training College located in the town of Nyeri in Central Kenya. Prior to buying institutional stoves, the college used inefficient three-stone fires for cooking and heating and occasionally electricity. “As you know the price of electricity is so expensive,” notes Muthoni who came across Kartech while visiting a local hotel and admired the way their stoves were efficient and neat and the kitchen staff could work with ease.
“Previously we were using six trucks-worth of firewood in four months. Now we use three trucks for our four cookstoves [600, 300 and two 100 litre capacity] and a water boiler also made by Kartech,” Mrs Muthoni explains, adding that it now amounts to KSh 18,000 (~US$220) for firewood. Located near Mount Kenya and known for its very cold temperatures, heating in Nyeri is necessary. Before purchasing the water boiler, students had to bathe with cold water with some catching pneumonia. With the boiler, she explains that one log of wood is enough to keep water for all the students heated and sickness has reduced considerably. “I would recommend Kartech’s stoves. We are very happy and do not regret it. We were able to work on a payment plan and they have since come to service our stoves – to clean out the soot and make sure it is working well.”
Westgate School, also in Central Kenya is one of Kartech’s newest customers through the partnership with GVEP, with an order of three stoves (two 75-litre and one 200-litre). Principal Mrs Gathii says they found out about Kartech’s stoves by word-of-mouth. She states, “We had a different institutional stove that was supposed to be improved but it was smoking all the time and the wood we used did not decrease.
I got to see the stoves made by Kartech and they even allowed us to test the stoves before purchasing. During that time we saw that it used half the wood we had allocated that day and there was no smoke.” With a student body of 320, Mrs Gathii adds that the financing available through Unaitas was ideal for them because it eased their ability to afford the stoves. “We were constructing a new building at the school and would not have otherwise been able to manage buying the jikos at one go. Currently we are repaying our loan with KSh 21,000 (~US$ 250 per month).”
It is hoped that through this partnership example more learning institutions will be able to access good-quality stoves for their energy needs, which in turn helps to strengthen micro and small energy enterprises.
“It is difficult for many schools to make upfront payments for institutional cookstoves,” says GVEP’s Loan Guarantee Fund manager, Phyllis Kariuki. “This initiative can help schools purchase fuel efficient cookstoves, reducing the wood they use and also positively impacting their budgets. In addition, the two-year loan repayment duration makes it an attractive and affordable option for learning institutions.”