Where Sh10 is not too little to save

When Mr Martin Wachira and his five friends sat together in September 2013 to brainstorm on a proposal to form a Savings and Credit Co-operative (Sacco) targeting low-income earners, few gave it a chance of survival. Many thought the idea was impossible and unsustainable and would soon flounder.

The pessimists saw the Sh10 minimum daily deposit Mr Wachira was proposing as too little to cater for office expenses let alone amount to any investment. The naysayers were of the view that it would take the institution ages to raise enough money to advance credit to the members.

Indeed it was no easy road this group had chosen and only the strong-willed would go along with what seemingly was a wild dream. Eventually, three of them left, but with determination and confidence, Mr Wachira soldiered on with his idea, and soon Kumisa Savings and Credit Co-operative (Sacco) was registered.

Mr Wachira offered to pay the office rent, salaries and donated his only vehicle to be used to run the sacco’s operations which included mobilising for membership, which he also fully took part in. He was determined to see his vision become a reality and put cynics in their place.

“They (initial partners) thought that the money we were planning to collect from our potential members was too little to run a financial institution,” he says.

“Some left but I never turned back because I knew I had a plan and strategy to ensure the Sacco would succeed, and would be instrumental in the growth of the small and medium enterprises.”

One month after the Sacco was registered, Mr Wachira who is the chairman, says members had raised Sh90,000 and one year later, the figure hit Sh2 million.

“We embarked on a vigorous campaign to market the Sacco, and mostly we were targeting youth and women group as well as individuals,” Mr Wachira says.

Hard to convince people

“We experienced challenges because it was hard to convince people to join a new Sacco considering the bad reputation some of the existing ones have. But luckily a good number of people agreed to give us a chance.”

Only two years and a few months in place, the institution which has been serving people from Riabai ward only has a membership of 3,000 people and deposit of Sh12 million.  Recently, the company issued a total of Sh660,000 dividend to the members.

The Sacco which has its offices at Kirigiti Trading Centre in Kiambu recently amended its rules to accommodate members from other regions in a bid to boost deposits and membership. It is targeting at least 10,000 people by the end of this financial year.

To join the Sacco, one is required to pay Sh200 registration fee and start depositing at least Sh10 daily which translates to Sh300 per month.
Members also have a chance to own the Sacco by buying shares which are sold at Sh10 each.

“If we have a membership of 10,000 people, and with each saving at least Sh10 per day, we will save Sh100,000 daily, Sh3 million per month and Sh36 million per year,” Mr Wachira says.

The members are not required to visit the Sacco offices to make their deposits, as they can use mobile money transfer.

The idea of setting a daily deposit of Sh10, Mr Wachira said was informed by the need to accommodate low-income earners.

“People join Saccos to save and borrow money, and mama mboga, egg hawkers, shoe shiners and other small businesses may find it difficult to raise Sh500-Sh1,000 to join a Sacco but can save between Sh10-Sh100 on a daily basis ,” he said.

The Sacco has enabled hundreds of people to buy boda bodas, taxis, start and expand businesses as well as pay school fees.
The management is now working on meeting the Sacco Societies Regulatory Authority (SASRA) requirements with a focus of opening a front office.