Under Kenya’s Vision 2030, the country aims at transforming into an industrialised middle-income economy offering high-quality life to its citizens in a clean and secure environment.
One way of achieving this is through Savings and Credit Cooperatives (Saccos).
Kenya has one of Africa’s vibrant Sacco movements with the unions enabling millions across all economic sectors to save, invest, pay school fees, and even buy land and build homes.
There are over 22,000 Saccos in the country with membership being drawn from different groups including farmers, workers, and small or medium business persons. Industry data shows that Saccos have mobilised domestic savings worth over Sh400 billion, accounting for 33 per cent of the national savings.
In Nakuru City, a group of motorcycle taxis popularly known as boda-boda riders have come together to start their own Sacco known as the Discovery Community Boda Boda.
The Sacco is meant to uplift the riders’ livelihood by buying them lands, motorcycles, and the capacity to build them with knowledge and skills on investment and savings. It started as a community-based organisation (CBO) in 2020 and has since grown to be a Sacco with a membership of over 15,000.
John Masinde, the chairman and the founder of the Sacco, told Enterprise that the idea developed after he and others noticed that boda boda riders had challenges when it comes to saving and investments.
“There was mistrust between boda bodas and traditional lenders forcing us to want to start something we can own as boda boda riders,” said Masinde.
Being in the industry for the past 15 years has made him understand his colleagues with his dream being to restore sanity in the sector.
Starting, was a challenge, he says as the riders had difficulty in saving Sh50 a day which has since changed and now contribute Sh300 daily.
With financial training from experts, the riders have learned the importance of saving, cohesion, and abiding by the law, among others.
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“I understand this industry well, a genuine bodaboda rider doesn’t default on loans and is trustworthy. The problem comes in when the lender fails to understand them and issues threats,” added Masinde.
To curb that Masinde sees no reason for the member to place collateral while borrowing instead keeping the log book of the rider.
“We keep the log book as a security, but for land and school fees we don’t need any security because, because we interact with the riders every day, they are now changing their attitude,” he added. The Sacco has grown to be valued at about Sh23 million.
“First it was meant for boda boda riders but due to the noble idea they had, members of the community joined in and the group shifted from being a welfare group to an investment and projects one attracting members outside the transport sector,” said Muriithi Njihia, the Sacco treasurer.
In 2020, Masinde with other founders started the group as boda boda welfare, then changed at the end of 2021 when Sh6.8 million was stolen forcing the group to regroup. With the challenge, Njihia said that they started a self-help group with some of the members pulling out of the group.
To overcome the problem, the group changed the leadership contracting counselors, and investors such as banks to provide counseling services and also bring hope to the members.
To help membes buy land, they have partnered with some investors who would finance the Sacco members after raising 35 percent of the initial amount.
“After spotting a piece of land, we advice our members who are qualified. Those who have savings are encouraged to add little money to qualify for the loan, then, the land is subdivided, and so far we have completed about seven acres of land,” said Njihia.
Once one gets land, the members are allowed to develop it even as they pay the remaining loan for a period of four years.
The Sacco also has been involved in purchasing motorcycles for members with over 150 sold at a friendly interest rates. This is after realising that banks and companies were extorting when offering loans to motorbike operators.
“We are among the cheapest compared with other lenders, we want to unshackle our members from the burden of slavery where they end up paying triple the amount of the buying price. This will make them finish the loan within a shorter period of two years,” he added.
Yona Wanjala, the Sacco’s operations manager, explained that Sacco has a milk plant project which will be launched this week at Narok.
Having members across Nakuru County has attracted the neighboring counties, with Narok being the latest.
The milk plant project he said will help in supporting farmers to sell and market their milk.
“Farmers in Narok have been straining when it comes to marketing their milk. “
This week, we will launch a Sh2 million milk plant with pasteurisation which will benefit over 300 registered members. We are targeting over 5,000 members in the area” he added.
Wanjala explains that farmers have been exploited for long and continue dealing with issues such as low farm gate prices, poor market access and payment delays.
The Sacco has since signed an agreement with farmers to contribute 20 liters, with five liters of the milk payment remitted to their savings, with the remaining 15 litres paid weekly.
Also approaching or marketing to someone about a Sacco remains a task owing to collapsed unions in the recent past which has created scepticism.
The Sacco has been looking for investors to help in supporting the Sacco to thrive as they uplift the lives of boda boda riders.
James Chiteli, the secretary general notes that one of the challenges has been other well-capitalised financiers “hijacking” projects pitched by their members.
“Some of the financiers have been hijacking some of the projects and ideas we pitch to them, which has since affected our work,” said Chiteli.
Chiteli believes that the country should change its attitude towards boda boda business and instead see the impact it has had on millions of livelihoods.