WAJIR, Kenya - Hamara Hujale tries to keep an eye on two squirming children and a pot of simmering ugali – a white doughy dish – as she reaches for her buzzing phone.
After speaking a few words, she hangs up and scribbles in a wrinkled notebook.
"My driver has found another customer so won't be back for another 30 minutes," she says with a satisfied smile.
Hujale, who lives in the northeast Kenyan town of Wajir, used to make and sell kitchen utensils, "mostly to pastoralists who would use them as dowry for their daughters' weddings".
"But as they lost their animals to drought, they had no money left to buy my products. So I had to find an alternative," she said.
Last year she secured a loan of 370,000 Kenyan shillings (about $3,560) through Crescent Takaful Sacco, an Islamic finance institution, and used the money to buy a tuk-tuk and set up a taxi business in Wajir.
Access to credit is critical to help communities prepare for and cope with increasingly frequent climate shocks like droughts and floods, experts say.
But in this Kenyan region bordering Somalia, where over 90 percent of the population is Muslim, few banks or institutions offer financial services that comply with Islamic law, which bans gambling and speculation, including interest-bearing loans, said Diyad Hujale, a programme coordinator at Mercy Corps, a charity, and no relation to Hamara.
To remedy this, in 2016 a project helped set up the county's first private cooperative offering financial products in accordance with Islamic principles – such as interest-free loans, with no fees for late payment.
The initiative, which is part of the Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED) programme, is funded by the UK Department for International Development (DFID) and led by Mercy Corps.
Gladys Mutisya, manager of the Wajir sacco, said it targets "the unbanked: pastoralists – who make up half of our clients – farmers, and poorer communities in general."
"We're trying to fill a gap that banks and traditional institutions are not able or willing to fill."
Diyad Hujale explained that while Sharia-compliant financial services already exist in Nairobi, the capital, and elsewhere in the country, they are too far away and expensive for local residents to access – so the BRACED programme supported the sacco to hire and train staff in Wajir.
PREPARING FOR SHOCKS
The toughest challenge in this largely pastoralist county is prolonged drought, which Hamara Hujale said "affects everyone".
In addition to her kitchen utensil business, she used to herd over 100 goats - but drought has claimed many of them.
"I can't even remember how many have died," she said, bending to smell her pot of ugali.
Catherine Simonet of the Overseas Development Institute (ODI), a London-based think tank, said that families with little or no disposable income are most affected when drought hits.
Repeated droughts create "a vicious circle where they not only have no alternative income if they have lost their harvest, for example, (but) they are also made more vulnerable to the next shock", she said.
To avoid this situation, Mutisya said the sacco's clients tend to take out loans in "good times", such as the harvesting season, when they can most easily qualify for loans.
They then hold the cash as easily accessible savings, so that in dry periods they can buy food and fodder for their animals to survive.
BUSINESSES FOR RESILIENCE
While many clients use the sacco as a way to boost their cash on hand, others like Hamara Hujale take out larger loans to set up their own businesses.
That fills a key gap in the market that is not met by other banks or institutions, Diyad Hujale said.
"Wajir is vast and its residents earn very little, so to most investors they don't make 'business sense,'" he said.
Simonet concurred that the potential for pastoralists to launch businesses is often underestimated.
"We tend to only look at pastoralists for example as households, when they're also producers, businesses, and a hugely untapped source of investment," she said.
Key to the sacco's model is trust, said Mutisya. "We don't just blindly give out loans. We assess the viability of our clients' business ideas and we train them on issues like accounting."
To minimise risk, the financial institution often lends money to groups rather than individuals. "The group's cohesion and reputation acts as a guarantee for us," Mutisya said.
Hamara Hujale, who took out a loan on her own, now makes up to 2,000 shillings ($20) per day from her two businesses – nearly twice as much as when she only sold utensils.
"But I need the money to repay over 30,000 shillings per month to the sacco," she said. Her dream, once she has repaid the loan in full, is to "buy a bigger car to serve as a taxi in rural areas".
REACHING REMOTE AREAS
Since the sacco opened, about 500 accounts have been created, Diyad Hujale said.
But "we're only present in a 20km radius around the town, when the entire county needs us," he said.
He hopes mobile phone technology will allow the initiative to expand and reach more people through an online platform, without the need to physically meet with an agent.
"Currently the only way to get a loan outside of Wajir town is for our agents to travel to outside villages, so the operation is currently very costly," he explained.
Simonet said a mobile service would make particular sense for pastoralists.
"Pastoralists not only live in rural areas, they are also constantly on the move. So to them a physical branch or agents don't make sense," she said.