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February 21, 2019

Diaspora saccos now make in-roads to local investments

Kenya Diaspora Sacco chairman Simon Nyaga follows proceedings during the sacco meeting in Seattle, USA
Kenya Diaspora Sacco chairman Simon Nyaga follows proceedings during the sacco meeting in Seattle, USA

Kenyans living in the diaspora for a long time have desired to be part of developments back home, even asking for opportunities to take part in the politics of their motherland.

Yet they are quietly part of the local economic fabric, deeply involved in the day-to-day economics of the local populace. They are now inching for the space to develop investment vehicles that are custom-made for their needs. Savings and credit co-operatives have offered them a most needed home, as new saccos made of diaspora membership become the new development vehicle for hundreds of thousands of Kenyans living abroad.

Some of the sacco members want to invest in projects that they can rely on when they retire back home. Others say they could not borrow from Kenyan banks because of stringent terms. Yet others feel that their relatives have failed them after being sent money.

For instance, women in the USA have come together to start a sacco solely for the fairer gender. It is called Kenya North America Diaspora Sacco, K-NADS.

The K-NADS sacco was born out of the premise that as diaspora women, they have the collective power to save, invest and build themselves a future in Kenya while living abroad.

According to some diaspora sacco members, they want to invest independently without involving family members. This is because these moneys could be easily diverted to uses other than what the person sending it home had meant.

The saccos also bridge the gap where local banks have not been able to help those living in diaspora by giving them loans or products that they can use for development. A number of members observed that it is usually difficult to borrow loans from Kenyan bank accounts back in Kenya, even if the accounts have cash savings.

“The fact that we don’t live back home makes it impossible to borrow while away. We therefore are left in a situation where even if we want to contribute to investments, we find that we need our own financial vehicle that understands the circumstances in diaspora but still enables us to invest back home,” a member commented in an interview.



The K-NADS membership is mainly from 23 states in USA constituting the North American region, and is fully owned and governed by members who share the same common bond stipulated in its bylaws.

The women-only K-nads was started in answer to difficulties women face while living away from their home countries.

They said there are issues that affect women in a unique way, such as separation and divorce, death of a spouse, or sending relatives money only for them to misuse it, hence the reason women in diaspora decided to form a sacco to cater for their interests.

Commissioner of co-operatives Mary Mungai was chief guest at the Seattle meeting of the Kenya USA diaspora saccos. She noted that these saccos are at a great position to contribute to the Big Four agenda, including provision of affordable housing.

She, however, feels the saccos are still young and may get into a place where they do not understand the co-operative model. She says they need training.

“We would wish that the government had enough resources to train them, but right now we are doing online manuals to induct them,” she said in a recent interview.

Some of the saccos include Kusa diaspora sacco, K-Nads sacco, new England Sacco, a Dubai-based sacco, one in Britain and another in Ireland. In general, there are at least 10 diaspora saccos registered with the ministry of co-operatives.

The Kenya USA Diaspora sacco had investments at Sh170 million as at December 2017 and have paid dividends at 15 per cent of shares and interest on main savings at two per cent.

Honorary secretary general and member Ralph Kilondu said the sacco is a vehicle to bring remittances to Kenya in an organised manner.



General manager Fred Njuki said the saccos will hopefully end the losses that Kenyans suffer after sending money to relatives and entrusting them to do projects on their behalf. 

When a family members cannot account for money sent to them for specific projects, such as buying land or building a house, strained relationships are bound to increase, the person living abroad ends up feeling cheated and mis-used, and could bring court cases between family members as the aggrieved party seeks recompense for their hard-earned money. 

The Kenyan counterparts may also feel embarrassed when they can’t account for money sent to them, and are bound to not get any more remittances, cutting off the source of upkeep from abroad that they had come to know.

“Many Kenyans in the diaspora have lost their funds through relatives, friends and Kenyan companies, and hence they are always very skeptical about any company or sacco, especially when it touches on matters finance. So there is a lot of mistrust and this has slowed down our market penetration, but we are picking up very well, given our transparent operations and honesty,” he said.

The Kenya Diaspora Sacco has successfully built their first real estate project along Kangundo Road. Members can access mortgages facilities or loans, to either buy their own homes or build or better still, invest in their preferred ways.

The government has assured members that they will benefit from first time home-owner tax relief.

Senior economic adviser to the presidency Mbui Wagacha said the diaspora saccos would be the best vehicle for Kenyans in the diaspora to lend to government projects back home. 

He felt  that if such groups have solid savings, they can even invest in Eurobonds back home rather than keeping their savings out there. Their role should help the country develop.

The Fadhili Homes project has so far put up 240 units comprising two and three bedroom houses. It has gained quite some interest among Kenyans with a number of people booking viewing appointments. So far, some 24 units are ready for occupancy.

The houses cost in the range of between Sh2 million and Sh5 million. The houses are ultramodern, with solar water heating installed, and within the gated community there will be a day care facility for children, a playground area and a commercial centre.

The sacco members have also bought plots of land in Isinya and Konza for investment purposes. The sacco hopes it can net in hundreds of thousands of Kenyans who reside in the US.

Registered in 2012, the Kenya Diaspora sacco now has a membership of 1,600, but it is eyeing more than 100,000 Kenyans who are living in the expansive USA, whether legally or not.

They feel that the large Kenyan community organisations in USA can do more than being a social group, to develop themselves and Kenya.

The Nairobi office, based in Victoria Towers in Upper Hill area, has full-time customer service staff and serves its American members all day and into the night hours, from 7am to 2am the next day.

The sacco encourages members to make investments through the sacco rather than borrow for personal uses.

The ongoing projects are expected to eventually boost remittances back home, as members see where their money is going.

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