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(Above) Officials of BUCOMOT SACCO, led by their CEO, Moffats Roberts Nabaalah (standing), inside their offices in Bungoma town.
In Kenya, like in every other society, a robust saving culture is crucial to creating wealth and alleviating poverty.
According to survey finding released by Kenya Financial Diaries last year, most poor households in Kenya rely on informal investment groups, popularly known as ‘chamas’, to save and borrow money.
And this is no different in Bungoma County, where a number of ‘chamas’ and savings and credit cooperative societies (SACCOs) have sprung up, as a result of the fast-growing ‘boda boda’ business. ‘Chamas’ are societies which are normally used to pool and invest savings informally, while SACCOs are cooperative societies through which people save and borrow loans from the societies.
The motor cycle business in Kenya started informally but is now working to formalize its existence and put in place measures that will make its members receive respect from the public.
The ‘boda boda’, as it is commonly referred to, cannot be ignored by the government any longer. It is a means of employment and it is also a source of revenue for the government.
The motorcycle business is generating an estimated Sh400 million daily, according to data from the Motorcycle Assembly Association of Kenya. It also employs over 100,000 Kenyans. About 14.4 million people ride them every day. Most of these motor cycles are from China.
According to the Motorcycle Assemblers Association of Kenya (MAAK), Chinese motorcycle models account for about 35 percent of Kenya’s motorcycle market, injecting over 1.3 million U.S. dollars daily to the Kenyan economy, from motorbike taxi operators. The association further says the motorcycle industry has seen tremendous growth, from about 16,000 units in 2007 to over 500, 000 in 2015.
The National Transport and Safety Authority (NTSA), a state-owned agency mandated to manage road transport in Kenya, has introduced rules governing the ‘boda boda’ industry. One of the rules says operators must belong to SACCOs.
In response to this directive by the government, ‘boda boda’ operators have joined SACCOs in different parts of the country.
In Bungoma County, Bungoma County Motorbike Sacco Ltd. (BUCOMOT), the largest SACCO in the county, has a membership of close to 2,000. It started in 2013 and aims to help members to be self reliant. According to the group’s treasurer, the SACCO was an answer to the slavery that some employers had subjected the riders to.
There are almost 10 SACCOs in the county, one in each of the nine sub-counties.
The SACCO guarantees members loans in the bank, which then allows them to buy motor cycles using the loans obtained from the SACCO’s bankers. They have fixed deposit accounts with their bankers, Kenya Commercial Bank and Family Bank.
Talking to the riders, you get the feeling that their goal is to own their own motor bike, which will free them from the shackles of unscrupulous employers who benefit from their efforts.
“Having one’s own motor bike has many advantages – it gives one financial freedom, one can work when they wish and rest when they want, they can build their own house and do many other things which they cannot do if employed by someone else,” says Benson Nyongesa Barasa, the SACCO’s treasurer.
Their coming together has not been in vain. Already, they have bought two buses which ply the Nairobi-Bungoma route.
“This is our investment and we hope to give our members dividends at the end of the year,” he says proudly.
Moffats Roberts Nabaalah, the CEO of the SACCO says the ‘boda boda’ industry is one that the government cannot wish away, as it caters for a group that forms the bulk of the country’s population – those between 18-35 years.
And like any other sector of the society, it has both good and bad elements.
“I desire to reorganize the industry and to create order in the ‘boda boda’ industry,” he says. The 2016 Bungoma County Act says no rider is allowed to operate in the county without belonging to any SACCO. He says the establishment of SACCOs will help operators to comply with county government regulations.
He adds that BUCOMOT has big plans for its members.
The SACCO plans to make it mandatory for its members to wear reflectors with the name of the SACCO and not the names of politicians. This will help to reduce the politicization of the industry, which affects the growth of the industry negatively. The reflector will also have the telephone contacts for the rider and his SACCO registration number.
In case the operators misbehave or break traffic rules, members of the public can report using the contact details, to either the SACCO or the relevant government body.
He says regulation of the industry will give the SACCO more bargaining power while dealing with funders and individuals like politicians, who may want the services of the riders in their campaigns and other functions.
“We want to have order in the industry,” he says passionately.
The SACCO has put in place a strategic plan that will guide its investments in the next few years. He says that this year, they intend to buy land, which they hope to develop into housing units by 2017. They are also planning to get into the fuel business and in selling motor cycle spares in the near future.
Moffats says that they are planning to have a FOSA office by 2018. Currently, they are only operating a BOSA office. Opening a FOSA office will allow the opening up of the membership of the SACCO to more members, and it will also increase the products that BUCOMOT can offer to its members.
“Currently, we are limited as a SACCO. But with FOSA, we will be open to other members of the society and each member will be able to operate their own account,” he says.
Challenges
Emmanuel Wafula (second left), chairperson of Christ the King Self Help Group, Pius Kundu (third left), Boniface Wabwoba (second right), and other members of their self-help group.
Yet the business, like any other business, has its own challenges. Theft, illnesses and accidents are a cause for worry for the SACCO leadership, since these challenges affect the health of the SACCO. If a member becomes ill, it means they cannot work. And if they cannot work, they will not be able to remit their monthly payment. If they happen to have a loan they are servicing for a motor bike they were given, the bank will come in.
If theft of a motor bike occurs, the member will still be forced to pay for the motor bike. Accidents may lead to permanent incapacitation or to death. This affects the SACCO in a very big way.
Fortunately, the SACCO leadership is not just sitting wriggling its fingers not knowing what to do. They have initiated a mechanism where all the motor bikes which are being given out must have a tracker. In case of a theft, the tracker will be used to find out where the motor bike is.
This, the BUCOMOT officials say, has helped to reduce the number of thefts in recent times.
To curb accidents, the SACCO has conducts safety awareness campaigns in various locations where their members operate from. They hold weekly meetings in each of the nine sub-counties of Bungoma County.
During the awareness meetings, they encourage their members to use riding gears like helmets, gloves, specialized trousers and jackets, and boots, and train them to obey traffic rules.
One issue that is putting the riders on a collision course with the government is the fact that the new government regulations say each motor bike is supposed to carry only one passenger, yet the motor bikes are designed for carrying three, including the rider.
Last year, National Transport and Safety Authority (NTSA) introduced the Motorcycles Regulations 2015. The new regulations say that riders must have Public Service Vehicle (PSV) insurance, a valid driving license and minimum third party insurance, while riders must be licensed by NTSA. Riders must also carry only one passenger at a time and passengers must sit astride and use foot rests except for persons with disability.
“Carrying one passenger at a time is going to be expensive for the passenger, yet if we carry two, they will pay less than one of them would pay if carried alone,” Moffats says.
He says they are in talks with the relevant authorities to try and find a solution that is agreeable to both parties.
The SACCO has rules and regulations that guide the conduct of its members. Like any self-regulating organization, their rules say that if a member breaks the rules, like driving without a helmet or jacket, or riding with open shoes or in a T-shirt, they receive a warning. The riders too, have to operate from six in the morning to six in the evening. If they break the rules three consecutive times, they are de-registered and if they have a motor bike guaranteed by the SACCO, the motor bike is taken away.
The SACCO says that it works closely with government agencies to implement the government’s agenda.
One of the challenges that they are still grappling with, as it happens with other sectors of the Kenyan society, many riders are yet to fully embrace the culture of saving money.
“People are afraid to save with SACCOs because of past experiences with other financial institutions, where their expectations were not met,” he says.
To counter this negativity, he says BUCOMOT will strive to provide quality services to build the confidence and trust of its members. They are also building the capacity of their members by giving them information that empowers them. This they do together with banks and other stakeholder organizations like KUSCO and the county government.
—This report was a result of a grant from the China-Africa Reporting Project managed by the Journalism Department of the University of Witwatersrand. The edited version appeared on the Standard newspaper on 22/6/2016 – http://www.standardmedia.co.ke/lifestyle/article/2000206111/the-boda-boda-business-a-pass-out-of-poverty/?pageNo=3
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