By Anderson Ojwang
For decades, the loan fear factor in Nyanza has undermined the region’s economic growth and investment in business opportunities.
Residents have often likened securing bank or Sacco loans to boost their businesses to inviting auctioneers into their homes.
While other communities have risked and secured bank and Sacco loans to boost their businesses, Nyanza residents have for eons given a wide berth to the service.
This partly explains why most businesses in the region have been dominated by people from other regions while the residents have remained consumers.
But the practice is fast changing, with residents now opting for bank and Sacco loans to boost their businesses. This explains the increase in the number of businesses owned by local residents.
In Siaya County, Chaoba Sacco has been at the forefront of rewriting the story of the community in business and, in the last seven years after its inception, has success stories to be told and documented.
Currently, Chaoba Sacco has over 3,200 members drawn from all the sub-counties of Siaya, Gem, Bondo, Ugunja, Ugenya and Rarieda. The members are from different segments of the economy.
For Dorine Adhiambo, a businesswoman based at Uhuru Bar Agulu trading centre in Gem, joining the Sacco in 2021 came after a friend introduced her to the organisation.
“I wanted to expand my business and urgently respond to constant challenges I faced in my business such as low cash flow and unreliable transport services,” she says.
Dorine secured a motorbike loan from Chaoba Sacco, which she was able to repay within a year. This helped her improve her business by providing reliable transport.
That was just the beginning of her success story. She secured another Sh100,000 to boost her business and within a short span she graduated her loan uptake to Sh150,000, later Sh200,000 and now Sh500,000.
“Chaoba Sacco currently gives a maximum loan of Sh500,000 and that is where I am currently. When I look back nine years before I joined Chaoba Sacco, it is incomparable. The journey is worth the salt,” she said.
She said financial discipline and stringent planning are key to successful loan repayment and business growth.
“On the first day of every month, I repay my loan. Every single day, I save a certain amount for the loan and this makes it easier for me to repay my loan. I have followed the training and rules I was given by the Sacco management and I can’t complain,” she said.
Dorine has turned out to be one of the leading influential educators in the region and has introduced many of her business friends to Chaoba Sacco. They have benefited from the business loans to grow their businesses.
For Patrick Abiero, his entry into business coincided with the formation of Chaoba Sacco in 2019. The two have become like Siamese twins, which is why Abiero and Chaoba Sacco have become almost inseparable.
“I decided to try my hand in business. I started with a small business because I was cash-starved. I feared going to seek a bank loan because I didn’t have the securities and the conditions were tough.
But hope was not lost. I was introduced to Chaoba, which was starting its operations. I became one of the first members and I have no regrets for having joined the group,”he said.
Abiero was able to expand his business and also ventured into commercial farming, which has transformed his fortunes.
“I have been able to purchase several parcels of land. I am in commercial farming. I constructed a modern house and I drive. This is purely from the partnership with Chaoba Sacco. It has been a successful journey,” he said.
He explained that the interest rate for Sacco loans is lower compared to banks. For instance, if you secure a Sacco loan of Sh100,000, you repay it with an interest of Sh20,000 a year.
For Carolyne Atieno Onyango from Sega, her story is fulfilling and exciting. Through Sacco loans, she has been able to educate her children while at the same time running her business successfully.
“I started with a small loan of Sh10,000 and now I have graduated to Sh150,000. Currently, I have a loan of Sh100,000 which I am servicing. I have been able to educate my children through the loan,” she said.
The Chief Executive Officer of Chaoba Sacco, Veronicah Ndunge Munuve, said at first there was a fear factor among residents over securing loans due to what they termed auctioneer harassment.
“People feared that if they take loans and fail to repay, their homes and properties will be auctioned. Through training and capacity building, we were able to change the mindset and this explains the growth in membership,” she said.
Veronicah said the group recently held its seventh Annual General Meeting and has members drawn from all the sub-counties in Siaya County.
The CEO said the main objective of the Sacco was to support the business community to access loans to allow them to grow, which has enabled businesses to thrive and to be owned by locals.
“We have not experienced any incident of auctioning our members. They have been punctual in loan repayment. We give out loans according to the size and the needs of the business,” the CEO explained.
She said they encourage members to take loans they can repay and graduate the loan amount as the business grows.
“We give loans as low as Sh10,000 and a maximum of Sh500,000 to members and this will grow with time. We hope to expand to other parts of Nyanza with time,” Veronicah said.
The CEO said the community needs to embrace the Sacco movement as a vehicle for economic growth and prosperity just like other regions such as Nandi, Kericho and Murang’a.
