How small business owners united to form vibrant self-help group

A lady shopper admires the generally vibrant shopping units providing a cross-section of products and services at the Kangonde Trading Centre made popular by the Platinum Shopping Mall

By Robert Nyagah

Kangonde Trading Centre, one of the most vibrant trading centres in Embu town situated at the Embu-Siakago-Kiritiri intersection, is a beehive of activities.

Several small scale female vegetable traders are busy packing produce for customers while a charcoal dealer negotiates the price of a tin of charcoal with a customer amid blaring music from two drinking joints and noise from the welding machines nearby.

A few meters away, two young men who clearly look intoxicated stagger out of a drinking joint and nearly step on Mitumba pairs of trousers and T-Shirts displayed for sale by an elderly lady who asks them to follow a different route.

As they head to a different route, the young men nearly fall into a pack of fruits displayed on a small low lying stand by a generally young looking female trader who is busy pealing and chopping different types of fruits into pieces and packing them in small tins for sale.

 Outside a butchery, another young woman struggles to avoid smoke billowing from a charcoal burner full of stuffed cow entrails, locally known as Mutura, being roasted and which produce a deep Nyama Choma aroma.

The aroma attracts customers to the stand and they start competing to have their cut of the chopped pieces of mutura.

A few metres from the business, several pick-ups are packed outside a large hardware shop. The trucks are loaded with sand, cement and building stones which should be transported to building sites in the outskirts of the trading centre.

A local can easily talk of how different the town is compared to three years ago. The centre was a dull stop over until some three years ago when a local land owner noticed a shortage of trading premises and grabbed the chance to fill the gap.

The innovative landlord fabricated a few cargo containers into small shop spaces complete with water and electricity supply as well as decent sanitation facilities. The demand slowly grew and today, there are several lanes of such units bringing huge vibrancy in trade and commerce.

The many businesses in the area have brought about a sense of togetherness and different business owners struggling for income have come together to mobilize savings and credits societies like the legally registered Kangonde Imani Self Help Group.

At least 400 traders each save Ksh 200 daily hence Ksh 2.4 million could be changing hands each month in savings.

The Group Chairman Samson Mugendi Muriithi said the group which was started in 2019 as merry go round group with a mere 13 members is expanding in bounds and is headed for greater things in the cooperative or bank industry.

He reveals that he realized that the money they generated through businesses and work could be increased through savings and loans and he started talking to people about the same.

“What started as table banking graduated to a merry go round group. Each member contributed Ksh 500 which could be lent at an interest of 20 per cent.  The members would then be given a few months to repay the borrowed money,” he adds.

Muriithi adds that a year after its inception, the group had grown to 26 members each contributing Ksh 2, 200.

“We realized that the amount of money we controlled was getting bigger hence we needed advice and guidance to register the group with the government and make it a legal entity,” he added.

The chairman revealed that they registered the group under the department of Social Services and that the group members are highly dedicated and disciplined in saving and repaying loans.

“We always consult experts and ensure their professional advice is incorporated in managing the group to avoid any crisis which might negatively affect operations,” he said.

After thorough scrutiny of the Group’s financial strengths and operations, the chairman explained that at the beginning of 2022, members unanimously agreed that loan interests should be reduced to 5 per cent.

“For the last few months, loan applicants having been getting funds under a 5 per cent interest rate, a member can qualify for up to Ksh 25,000” says Mr. Mugendi adding that presently members have increased their savings to Ksh 2,600.

The chairman added that owing to the Group’s recent interaction with experts from various financial institutions like Biashara Sacco, which the group is a member of, members can now borrow up to Ksh 35,000.

 He expressed confidence that due to the group’s good management systems, there has never been loss of funds, delayed loan repayment or loan default.

“The group’s financial resources are managed in a way that members are encouraged to make savings which are retained as a security towards the loans they borrow,” he adds.

He added that through the group, a good percent of small scale traders who started as hawkers under make-shift kibandas have expanded their stock and moved to permanent and secure premises where their operations have become efficient and profitable.

“We have members who started with stocks of even less that Ksh 2,000 and now control stocks of up to Ksh 50, 000 and more. Most are happy about the unity of purpose practiced by our group,” says Mr. Mugendi, who added that many other people have been seeking guidance on how to join the vibrant group.

He revealed that the group can expand to a Sacco or cooperative and that members are in agreement that they should go for a permanent capital intensive project like real estate.

 “We have been talking about buying land and building residential houses. Land is a valuable asset since it doesn’t depreciate in value,” argues Mr. Mugendi.

He added that as they prepare to renew their certificate and remain a legal entity, they are also discussing emerging challenges and sharing ideas on areas that need improvement on as well as reviewing laws and regulations to ensure their future operations are in tandem with present challenges in financial management.

Mr. Mugendi confessed that he is ready to relinquish the position of the chairman during the next AGM and allow fair competition for the same.

“Before then, I will continue to lead the group with humility and transparency.  As a chairman, I respect members’ advice and opinions and always pray to God to give me respect and wisdom to help me manage their money with transparency and accountability.” He concluded.  

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