Feature: Saving groups help improve livelihood of Kenya's low-income earners

In a month's time, Geoffrey Obegi will be receiving his lump sum amount from a motorcycle saving group.

Obegi, in his mid-twenties, has been operating from a busy highway supermarket in Nakuru town in Kenya's Rift Valley region.

He is the chairperson of the 12-member saving group they have named Inuka meaning "rise". Each member is bound to a minimum of one share worth two dollars, an amount they contribute daily and share out every fortnight.

"We started the group in August 2014 out of need to boost our living standards. We have seen women selling vegetables buying pieces of land courtesy of their engagement in saving groups," said Obegi during a recent interview with Xinhua.

"At the moment, we have some members who have rented farms for growing cabbages and potatoes. They are doing very well," said Obegi, who has two shares worth four dollars.

The group, according to the father of one, constitutes of members aged between 23 and 42, indicating a category of Kenyan citizens with nuclear and extended responsibilities.

"I am almost completing my concrete house at home in Kisii (Western Kenya) thanks to Inuka. I committed to buying bricks, iron sheets and cement every time I received the collective savings. Next month (July), I will receive 672 U.S. dollars and I am hopeful the money will be adequate to cater for the remaining accessories," he said.

"I have also hired out an acre at Kabarak (West of Nakuru town) where I have planted maize and potatoes," he added.

For 32-year-old Moses Maina, a member of the Inuka group, his four children could be out of school has it not been for his association with the group.

"When things are thick you can present your case to the group members to swap your turn with another member upon consent. They have assisted me twice and I am so grateful," said Maina, who lost his packing and loading job at a Nakuru based wholesale outlet early last year.

With a boost of 280 dollars from the group, Maina says he managed to open a grocery for his wife, relieving him the burden of sole provision for his family.

Unlike the investment groups in which the members target building up their financial resources through developments, Inuka group serves a different purpose according to Obegi and Maina.

As small scale traders with an inconsistent income, creating a livelihood security for themselves comes in the form of setting aside a portion of their daily earnings in a group, they argue.

But that comes with steadfast commitment to effectively appropriate the earnings to meet the immediate needs of the family members and save for developments, says Obegi.

"We actually run our group as a merry-go-round, but we prefer to call it a saving group because each member commits his share and after two weeks one member receives his lump sum. We are simply saving in each other," stated the chairperson.

He further explained that: "We are interested in helping each other achieve their development goals. We are all family men and we have responsibilities. Sometimes this business is very good and sometimes it's very bad, but if we have an alternative means of survival then we are safe. That is the motivation behind formation of this group."

When the low income earners such as the motorcycle riders are able to ascend the development ladder, the country is freed from high levels of poverty, and in the long term, creates employment opportunities for the jobless, argues economist professor Tom Nyamache.

"There are thousands of people across Kenya employed in small and micro enterprises, many of whom fall under the low income cadre. When they are able to progress, the country's economic performance improves too," observed Nyamache.

"When they invest and become successful, they are able to employ others. This is what we need as a country to reduce unemployment and end poverty in the households."

However, he says more sensitization needs to be done on efficient utilization of the financial resources among the micro and small scale traders to assist them in making appropriate investment decisions.

According to him, saving groups are crucial vehicles to propelling change of living standards among the low income earners.

"But they should be able to invest in something that generates another to be able to contribute to the country's economic sustainability," he said. Endit