Slum-based sacco hits Sh300mn loan disbursement target 

NAIROBI, Kenya, Mar 4 — A slum-based savings and credit co-operative society (Sacco) in Kibera, Nairobi, continues to improve lives of slum dwellers through access of cheap loans and savings.

SHOFCO Sacco, which works with small and mid-size enterprises in the informal settlements, has so far disbursed Sh300 million in form of loans since its inception to help its members start and improve their businesses.

According to the sacco, 20 per cent of loans borrowed went to finance education for children of the members, 30 per cent went to general consumption and 50 per cent went to development.

“Through the confidence members have with us, savings currently stand at Ksh 100 million. Members have also been able to benefit from the Sacco in terms of access to loan. Our total loan book currently stands at Ksh 300 million since we started. This is money that you can trace and see the impact it has had on our members,” Sacco Senior Manager Ibrahim Maina stated.

So far, the Sacco has helped eight people buy cars for businesses.

“My dream was to have a car to help in transportation of goods for my business. Today my dream has come to be, I have a probox which has been facilitated to me by the SHOFCO Sacco. I urge the youth to join the Sacco because I believe that through it, everyone can achieve their dreams,” stated Julius Singutia, a Sacco member.

The Sacco has grown from a paltry 19 members during its launch to now 9000 members spread in slums across the country.

The 9000 members are drawn from Kibera, Mathare, Mukuru, Kawangware, Mombasa and Kisumu. The Sacco is also looking to expand to other parts of the country to attract more members.

“Our priority is people before profit. This has help the Sacco grow from 19 members to the current membership of around 9000 individuals. It is also good to mention that this Sacco has grown in so many parameters financially. We started at almost zero in terms of share capital as we talk, our share capital is at Ksh 15 million.

“We now have an asset based worth Ksh200 million and we are expanding to more places in Nyanza, Western Kenya and Coastal region,” Maina stated.

Up to 86 per cent of the Sacco’s members are women, a fact that SHOFCO’s Chief Executive and Founder Dr. Kennedy Odede attributes to the demographics in most slums across the country and mainly Nairobi.

SHOFCO Sacco which began operations in 2015 allows slums dwellers to access credit without collateral, jobs or even bank accounts with as little saving as Ksh500.

“SHOFCO Sacco is serving the unserved especially in the money space and reaching the unreached in terms of ensuring that we are deepening the financial access. Allowing members to have alternative model through which they can access finance without security and collateral,” Maina added.

The Sacco adopted technology to attract more clientele and revenue in 2020. It launched a new mobile platform from where members can either apply for loans or make payments.

Through the mobile app, members can borrow up to Ksh 100,000 payable in two to three months.

Going into the future, the Sacco plans to become a one-stop shop where members will be able to bank directly in terms of front office services, clear their cheques and do all things that they do in a conventional bank to ensure that people living in the informal areas are not left behind.

“It is all about access to capital whereby you cannot be judged because you come from a slum. With time it can turn out to be ‘people’s bank’ in Kenya,” Dr. Odede added.