TALA, Kenya—With 900 coffee trees to tend, Patrick Mutua is considered by his neighbors to be a successful farmer and busy man. He also serves as vice chairman of the Kyaume Farmers' Cooperative, one of Kenya's coffee cooperatives, whose members band together for bulk purchasing and crop sales to negotiate the best prices for each.
Mutua and his fellow co-op members also are members of Universal Traders SACCO (UTS), a credit union whose five branches now serve more than 18,000 members, including 1,500 coffee farmers and eight growers' cooperatives like the one to which Mutua belongs. UTS is one of four credit unions that has grown in size as a member of World Council of Credit Unions' (WOCCU) SACCO Growth Program in Kenya, funded by the Bill & Melinda Gates Foundation.
Although only two years old, UTS scored a coup when the Kenyan government recognized its value to members and partnered with the SACCO to administer the agricultural loan funds it provides to coffee growers nationwide. The plants are currently in the early stages of the growing season, with harvest nearly six months off, meaning the coffee farmers will be seeking to tap the 10 million Kenyan shillings (about US$133,000) in government loan funds that UTS will distribute to farmers who are SACCO members, according to Jacob Wambua, manager of the UTS branch in Tala.
"We don't pay them in cash," Wambua said. "We post it to their credit union account. To qualify for the government funds, they must be actively cultivating at least 100 coffee trees. And they have to be members in good standing."
The government loan program is designed to strengthen and grow Kenya's coffee export program, which has languished in recent years due to social and economic issues. Funds are loaned to qualifying farmers at a 10% interest rate. Of that, UTS is able to keep 5% of the interest earned on the loans to fund its operations, Wambua said.
Participation in the government program is a step forward for UTS itself, whose membership had dwindled until two years ago when they became part of the WOCCU program. WOCCU provided technical assistance and branding support while fostering an aggressive marketing campaign that took credit union representatives into the massive twice-weekly public markets in Tala, which has a population of about 100,000, to solicit members. The new efforts have helped the credit union grow from approximately 1,600 members to its current level in about 18 months, according to Isaiah Mutungi, pastor of the Africa Inland Church and chairman of the UTS board.
The relationship with WOCCU has been a steep educational process in order for UTS to reach its current success levels, said Mutungi, who also farms his own crop of 800 coffee trees. It has also awakened in credit union staff and board members the notion that the SACCO members themselves could benefit from some much needed financial education, which has become an active part of their service program.
"In the olden days, people did not know banking," Mutungi said. "You can even give small babies coins and they learn how to spend, but not how to save. This is what we are teaching them."
Financial education is central to the program that supports the coffee farmers who live near Tala and the SACCO's four other branches. Understanding savings and learning how to manage money are especially critical this time of year, when the coffee trees are in their initial budding stages and far from providing any income to their growers. The support and strengthening WOCCU has been providing UTS over the past few years has enabled the SACCO, in turn, to provide similar services for its members, Mutungi said.
"Our partnership with WOCCU has added great value to the SACCO and gives us a better foundation for a more strategic approach," Mutungi added. "We believe we are ahead of other SACCOs in Kenya, but we are still learning. And we would like pass that understanding on to our members as well."
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 56,000 credit unions in 101 countries serve 200 million people. Learn more about World Council's impact around the world at www.woccu.org.