Frustrated by a bank, Joloba has no regrets after joining an investment club
Posted Tuesday, February 26 2013 at 00:00
After going through a frustrating loan application, Joloba vowed never to be frustrated by bank bureaucracy.
Five years ago, it would be unusual for Daniel Joloba, not to borrow money from the bank to finance the expansion of his transportation business.
However, he got frustrated when it took him nine months to access a loan of Shs25 million that he sought to use to expand one of his businesses - a hardware store.
The frustration pushed him to resolve never to return to banks in search of loans.
“Imagine how much money I would have made in nine months if I had capital,” Mr Joloba tells of his frustration to Prosper.
This in a way inspired him to pool Shs150,000 from his meager income and team up with two of his colleagues to start an investment club that would offer them fast access to cheaper credit.
The pool gave birth to Buddies Investment Club that has for about five years made a difference.
An investment club brings a group of like-minded people to pool resources together with a view of undertaking large ventures.
In such a setting people accumulate funds for investment in a much shorter time than would be the case if it was done in isolation.
The club’s members would contribute Shs50,000 each month in the first year before it was reviewed to Shs100,000, Shs200,000 up to the current Shs1 million with the growth of members’ incomes.
Today, Mr Joloba not only runs well capitalised businesses but oversees the operations of two profitable investment clubs – Buddies and University Community Fellowship church club.
Buddies Investment Club has been able to mobilise Shs300 million in a space of five years through members’ contributions and interest paid by members on the loans from the club.
“We only lend to members to expand their businesses for now. We have built trust amongst ourselves that’s why we only lend ourselves. We don’t even take other people’s money,” Mr Joloba explains.
He says Buddies has made it very easy for members to access funds to finance business expansions unlike before when they had to wait for months to get loans from banks.
“If I need Shs60 million now, I will get it within a few minutes because money is available. I will just make a phone call to members, they sign and I will have the money which I pay back with interest,” he says.
Buddies, which has now transformed into a financial institution – Buddy Investment Group (BIG) Limited– lends its members money at a 1 per cent interest.