PROTECTING BORROWERS FROM MISSPENDING BORROWED FUNDS IN KENYA, NAIROBI, KENYA

PROTECTING BORROWERS FROM MISSPENDING BORROWED FUNDS IN KENYA, NAIROBI, KENYA

November 16, 2011

Posted by PROTECTING BORROWERS FROM MISSPENDING BORROWED FUNDS IN KENYA, NAIROBI, KENYA

 There are many reasons why anyone could misuse funds or just come across unavoidable circumstances that will eventually lead to the failures of their projects .The main and foremost reason in this case is usually lack of skills on how to handle money in the project owners. This lack of the skills leads to the misappropriation of the funds so that every section of the procedures in the construction or implementation of the project is not included in the financial plan so that in end, there arises unexpected expenses that consume up the funds leading to the shortage of funds and hence, problems in completing

the construction or the implementation of the project. times, it isn’t the lack of monetary skills in the People who are handling the project that cause the failure of these projects, it is the human weaknesses in them .The misuse of the funds by the project staff due carelessness, graft and much more on the list of human weaknesses that we know, all combined can cause this failures.

There have been reports of farmers who have misused their tea or coffee bonus payments or even loans from their Sacco’s of Banks. These farmers mostly spend their funds on entertaining themselves .Not even a single cent goes towards the intend projects .So because of such weaknesses and much more,They end up consuming the money instead of setting up whatever projects they had in their minds. They have very wise ideas but because of these weaknesses, they are unable to achieve their dreams.

This problem has been existing in this country since the days of independence .It is because of this problem that we thought it wise to ask some of our co-operative management experts on what measures they had taken as the country’s’ experts in the field towards helping people with these problems.

Our expert is the director of the Jamena Agencies in Kericho town and their offices are situated on the Posta Plaza building along the Kisumu to Nairobi Highway. The director gave us some advice concerning the issue.

The experts advise on how to help people who are borrowing loans from Sacco’s, banks or any other monetary organizations to utilize their loan funds well was this; the first and foremost thing is to get the entire Kenyan Population trained on how to handle money .This will equip every body in the country, old and young with the necessary skills in the use of their money. They will then know how to spend each and every coin that they earn in their daily lives and thus save them from the mistakes that they find themselves in due to their ignorance.

The second solution to the problem is to have the Sacco’s or banks or whichever monetary organizations that they might be involved in the transaction with do what we call “Asset Financing”.

With Asset financing, the borrowers aren’t given the cash directly in the hand, instead, they are provided with whatever services or assets that they all looking for by the banks or monetary institutions that will have gone to for the loans and then they are left only to manage the projects. The Monetary institutions will build all the assets that will be needed in order to form whatever kind of project they will be wanting  and then when the projects will be complete ,they will then handover the projects to the owners who will then be expected to be responsible for the everyday operations of the project.

This is considered to be the most effective way of saving the borrowers from falling into a misfortune due to their ignorance in the loan spending management .It is a shortcut and very easy way of helping the borrowers to achieve their dreams when go for help from money lenders.

The above mentioned techniques are considered as the best alternative to giving the borrowers hard cash which they can easily spend.

john ambuli. Posted In: SACCOS 

THE ROUTE K64 SACCO OF KERICHO DISTRICT PLANS TO BECOME A MICRO FINANCE INSTITUTION, NAIROBI, KENYA

THE ROUTE K64 SACCO OF KERICHO DISTRICT PLANS TO BECOME A MICRO FINANCE INSTITUTION, NAIROBI, KENYA

The Route K64 Sacco intends to transform itself in to a micro-finance institution. According to the Sacco members that we interviewed in the last week of the month of October, the year two thousand and eleven, the society’s’ to officials held a meeting in Kapsoit Township, a small town on the outskirts of kericho town.

The sources ,who are very reliable, said that the staff members who met here  were expected to discus on how they could get the all the resources and information ,manpower and how they could get all the assistance to enable the Sacco to transform itself well and smoothly up to its’ every day operations.

The Society is only eight months old but is already trying on big things .The staff member that we talked to told us that the society’s’ total assets plus the total savings and earnings for the period that it has existed amount only up to four million and the Sacco’s senior staff have seen it wise to transform the society in to a microfinance institution as a development move.

We weren’t able to access the proceedings of the meeting .All our efforts to meet some of the members who took part in the meeting or to get in contact with their headquarters weren’t successful but we hope to carry the reports about this meeting in our next issue of this magazine.

The route K64 Sacco is a transport Sacco in Kericho District .The society operates it transport business on the kericho to Eldoret route and back

E-SERVICES AT THE KIPSIGIS TEACHERS SACCOIN KERICHO, KENYA

E-SERVICES AT THE KIPSIGIS TEACHERS SACCOIN KERICHO, KENYA

The ATM method of withdrawing money and the SMS methods of banking have become very popular among the people of Kericho Town generally .This is proven by the long queues that can be seen at the ATM points at all the banks in the town .A bigger percentage of the towns banking population prefer to use this machines and mobile phones to the normal traditional methods of banking. The reason being that the machines are more time saving than the normal methods of withdrawing money and the availability of money through the ATMs and  the SMS services on their mobile phones for the twenty four hours of the day throughout the seven days of the week.

The Sacco encourages its members to use the ATM because of its benefits in the reduction of congestion and all the other benefits that will come as a result of the use of the machine.

The Sacco uses a Visa branded ATM card which gives its members an advantage of accessing their money anytime any day and anywhere in the whole world where the visa card is used.

The Customers of the Kipsigis teachers Sacco are not left out in this development s and trend of life. The possibility of withdrawing money at the ATM any time of the day has given the machines more advantages over the traditional method, and hence, many customers of the Sacco Prefer using the ATM. Customers can use the ATM services even at night.

Next is the Mobile phone banking .This methods of banking also have changed life upcountry a great deal .More and more people are turning to the use this method of banking .They are easy and secure than carrying hard cash in the hand .Compared to the time consuming queuing methods of doing the same thing over the counters, plus the expenses of travelling from their distant homes to the Sacco’s office to make simple inquiries. More customers have turned to the use of these methods .The method is popularly known as e-banking where the customers exchange the money electronically over their mobile phones during a transaction.

The Sacco provides these services to its customer’s .They can make inquiries about the state of their accounts with the FOSA, the back offices and co-operative house. They can also know how much they have in their balances .And they can also do more with it.

The customers can also get notifications on their salaries, loans, a check which has matured dividends and more other services which the society continues to add on to the list as time goes on and as they continue developing and their needs changing to match with the times.

The services are intended to reduce congestion at the Sacco’s’ offices.

Although there have been normal break downs   due to mechanical problems in the machines and weaknesses in the networks from the mobile phone service providers and except for the few reports early in the year in other banking institutions whereby it was said that the machines printed the receipts wrongly causing the customers to be overcharged in their accounts, but the machine are expected to be more convenient than the humans who serve the customers over the counters. Many people are taking to mobile banking.

The teachers Sacco ATM has been out of order for  the bigger part of the month of august .This cost a lot of inconveniences to the Sacco’s customers generally. Some of the customers had to go back home without money and spend the weekends the hard way. The Sacco’s administrations office declined to speak about this issue when we visited them for an interview about the problem. The most senior boss at in that office said that he wasn’t willing to say anything about the matter and warned us not to report anything about this matter.

According to the interview between us and the female group four security company guard who was on duty on Saturday, the twenty seventh day of the month of august, when we went to check the machine, It had been in the malfunction state for over two weeks and the staff of the Sacco hadn’t given an explanation for the break down of the machine to their customers up to that date .Other wise the masses in kerihco town are continuing to change to the use of e-money and very soon ,they  could drop the use of hard cash and  use the e-money in their daily lives entirely .

On the society’s’ Development ,The Sacco intents to become a micro credit organization .The products are still being developed and  improved after a successful completion of the feasibility study .The society’s members are encouraged to form groups and open accounts with the FOSA so as to benefit from the project.