Earning from a savings group

Ruhinda Youth Savings Association started out with five members where each contributed Shs20,000 four years back. The group has now grown to 35 members and is worth Shs50 million in savings.

Tuesday February 25 2014


By Jonathan Adengo

When five young men set out to start a savings group four years ago, few of them knew that the group would grow up to the 35 members they have today.

They started their group way back in March 2010 and they called it ‘Ruhinda Youth Savings Association Ltd.’

“The association is basically for the youth who come from Ruhinda,” says Vanansio Natuhwera Bagateireyo, the chairperson of the association.

They started the group as five young men on the foundation of the church, as youth from Ruwoya Catholic Church.

Natuhwera says they thought they would only admit members from Ruwoya church. But as they continued to grow, they decided to open it up for the youth from Ruhinda sub-County in Rujumbura county, Rukungiri District so as to benefit the whole community.

As University institutions continue churning out youth into the jobless world, few especially those who get employment, cannot easily borrow startup capital from banking institutions.
The bank requirements do not favour them given that they don’t have enough security. Natuhwera and his friends faced a challenge when they were just fresh out of school and tried to borrow money from banks to better themselves because they did not have enough security to guarantee the loans which they wanted.

“We decided to start up an association to not only allow us to save but also borrow at a manageable borrowing rate and security demands,” he says. When the five members started collecting Shs20,000 per person every month, the members surprisingly started applying for loans immediately.

The money at that time was not enough to be issued out as yet. This prompted the group to come up with a Constitution and also other terms of borrowing.

First, in order to borrow from them, one had to be a member of the association. They also decided that one cannot borrow more than three times his savings which allowed them to contain the growing number of youths.

One also required having two guarantors from the group so as to easily recover the money in case one defaulted.

Natuhwera explains that they went ahead and registered the group with the registrar of companies and also got the necessary paperwork done to allow them to open an account to deposit the savings.

Natuhwera, himself a marketer, speaks passionately about their savings initiative. According to him, “Development is movement from the current and undesirable situation to a future desirable situation.”

“We didn’t stop at just registering and saving, we invited other people to join the group,” he says.

By the end of 2010, the group had grown to 15 members. And by the end of 2012, they had increased to 22 members and in 2013; they were 35 members in total.
Even their monthly savings grew over the years.

“The association increased the monthly savings gradually from Shs20,000 when we started, to Shs30,000 and now we contribute Shs40,000 each,” explains Natuhwera, the chairperson. He also adds that their borrowing rates have also been able to decrease with time to allow their members get soft loans.

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