For a group that started as a merry-go-round in 2008, opening doors for microfinance services in January next year is a dream come true. "When we began, we did not think we would do much more than a merry-go-round where each member would benefit with some savings at a time. But now, our vision is indeed big, and we hope to even open a bank," says Irene Wangui , former chair of Hope and Vision Youth SACCO. The team bagged the best youth-run SACCO award in Kenya last year. Its vice-chair Gibson Weru is impressed with the progress which he attributes to their partnership with Balloon Kenya, a charity organisation. So far, the deal has seen them loan Sh1.5 million to 50 new startups, and other entrepreneurs to expand businesses. Hannah Wanjiru , who sells jackets in Nakuru town agrees. "My business was really suffering. Punitive repayment conditions in other saccos cost me over Sh15,000 in defaults." In October, she signed Sh20,000 loan from Hope and Vision SACCO, a cash boost which has rejuvenated her business. "In one-and-a-half months, I have managed to buy seven bales of clothes and sold them. I have also started venturing into different towns such as Kabarnet and Marigat." That is not all, Ms Wanjiru owes her success to an eight-week training and mentorship by British experts, thanks to Balloon Kenya and the youth-run SACCO. HOW IT STARTED To start, the team put down the rules of operation in black and white. Intoxicated persons would not be allowed to open business. Disorderliness, use of abusive language and smoking at the premises were unacceptable. Harassing shoppers, diverting customers from a competitor's stall would invite punishment. Such is part of the code the members most of whom between 20 and 35 years follow. Older persons are also welcome. "Any business person is welcome to be part of the group. It doesn't mean that you must be trading within Nakuru town. We are opening up to those with income-generating activities from other parts of the county, too," says Ms Wangui. SACCO members contribute Sh1,500 per month, and one has the option of contributing daily or weekly until he/she meets the target amount. Tea vendors, barbers, curio dealers, shoe shiners, water sellers, book sellers and entrepreneurs in different fields make the long list of members. "We cannot accept a member who deals in illegal products such as poaching, or drugs. And this we shall know during registration because they must provide their personal and business details." The registration fee is Sh2,600 for new members. CREATING A CULTURE The group's aim is to inculcate a savings culture, and offer loans which members can pay at fair interest rates. "We realised that unless we come together to help one another, our businesses may not grow, and also we cannot approach other financial institutions for loan products because they may need sureties and other documents which we do not have," says credit officer James Kimani . The SACCO offers different types of loans, says Mr Kimani . Each product comes with its own repayment interest — the highest being Mbuzi loan at 15 per cent interest rate. The loan is meant to finance a member during festivities such as Christmas, and is repayable within four months. Others are business development products where members borrow up to two times their savings. The importance of insurance has also come in handy in the running of the sacco. Already, members pay Sh3,000 per year towards health cover of up to Sh20,000 when one is admitted in hospital. The British organisation Balloon Kenya brings in volunteers to work with young entrepreneurs to refine their business ideas into working enterprises. Balloon then offers grants to launch the best business ideas, along with follow-up checks. Balloon Kenya plans to use the Nakuru small businesses model to guide successful startups in other parts of the world. SO FAR SO GOOD And so far, things are looking good. Their plans to raise minimum requirements for starting micro-lending services include their aggressive savings plan through ploughing back all profits into the SACCO. Their newly revamped medical insurance product for our members has eased their worries too. Members contribute only Sh3,000 per year towards the health cover, and are cushioned up to Sh20,000 when admitted in hospital.
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