villagefinance

Layaway plan from Chuka, Kenya, Feb 17, 2012

A shopkeeper shows us his informal yet careful bookkeeping for his customers.  After selecting the product or device they wish to purchase, they come to an agreement with the shop’s owner for a layaway plan that suits their need for flexibility and control over the amount paid each time and frequency of said payments.  Once the total amount is cleared they are free to collect the device and take it home, sometimes taking as long as 2 or 3 years to reach their goal. Since they have selected the product already and the shop has put their name on it, there is an intangible sense of ownership that incentivizes their efforts to complete the transaction as rapidly as they are able.

The sticker seen is used to mark the specific product as an indicator of having been “Sold”, while a ledger kept on the service desk is where the transactions are recorded. Trust is critical in the informal economy and in small market towns where everyone knows everyone else and reputations can be built or lost through word of mouth, the shop owner knows that he cannot afford to ‘confuse’ his customers. In Kenya, literacy is high, and most people tend to complete their 8th grade primary schooling.

Shopkeepers rarely offer credit but layaway plans are common for such big ticket items. Customers who frequent the market towns on weekly market days may come around to see if their chosen purchase is still sitting there.