A merry-go-round journey from Sh2000 contribution to a Sh40 million business
What started as a merry go round, with each of the 15 members of Cheptarit Star Women group in Mosoriot, Mosop Division contributing Sh2000 monthly for one of them to invest in smallholder production of beans in Nandi County has transformed into a real enterprise with an operating capital of Sh40 million.
Today, the group has grown from just pulling resources together for cultivation of beans as alternative source of revenue to the regional market, where they now buy tons of maize and beans from cooperatives in Kenya and Uganda to feed thousands of school going children in Kenya.
“Our journey started in 2009, through which one member of our group would get a total of Sh30,000 for investment in any small business,” said Josephine Bungei, the group secretary. “By the year 2014, we had covered all the 15 households and the entire team has decided to invest in bean farming, apart from three members who dropped off along the way,” she said.
It was at this point that they decided to register the group as a self help women group under the ministry of culture and social services. Through advice from the East Africa Grain Council, they started aggregating their produce every season for collective marketing.
This was the game changer for the team, because by the year 2016, they met Mary’s Meals Kenya (MMK), a charity organisation that operates a primary school feeding and early childhood development programme in Kenya.
“We signed a contract with MMK, to supply two schools with maize and beans every month for a start,” said Bungei. “Each school would receive 20 (50Kg) bags of beans and 40 bags of maize,” she said.
The first batch was easy because at their aggregation centre in Mosoriot, they had sufficient stock. But after payment, they would go to the market especially in Trans Nzoia and Mt Elgon regions to buy beans, and maize from local farmers every month.
After a few months of steady supply, MMK added them six more schools, and by the end of 2016, they had a total of 10 schools in Uasain Gishu with a capital base of Sh600,000. Through the year 2017, they had increased their supply to 22 schools, and in 2018, they were added three more schools in Nyamira and Kisii Counties.
There was more growth to their enterprise in 2019, when MMK gave them another contract to supply maize and beans to 392 schools in Turkana County. “This was almost like a toll order. But since we had links with another organisation known as Kilimo Trust, they linked us to cooperatives in parts of the country, and in Uganda from where we were able to source sufficient quantities,” said the Secretary.
The organisation (Kilimo Trust) has been implementing a project known as Regional East African Community Trade in Staples Phase (REACTS), which supports smallholder farming households and value chain actors in Uganda, Rwanda and Kenya to take advantage of structured national, regional and opportunistic international markets for agricultural produce. The initiative is supported by AGRA..
“Through these linkages, we have been able to import so much tons of beans particularly from Uganda to meet our demand, which today stands at 415 schools,” said Bungei.
However, the expanded market presented a new challenge – finance. “It is unfortunate that no commercial bank is willing to give us a loan because we are not a limited company, and maybe we are all women,” said the secretary.
“We have had to rely on shylocks for financing, with some of them asking as much as 30 percent interest per month, to be able to raise enough money,” she said.
So far, it is only their banking partner that has extended to them an overdraft facility, which enables them collect an extra Sh4 million. “We believe that one day we will get rid of the shylocks and become fully independent,” said Bungei.
“The biggest problem has always been the border barriers, which sometimes delays clearance of our cereals,” said Irene Samoei, the group’s chairlady.
To cut down on operational costs, the group has embraced on-line business where they place orders in such operatives like in Uganda and the commodity is delivered without necessarily being present at the site.
“Last month alone, we imported 300 tonnes of beans from Uganda worth Sh2.1 million and paid Sh1.2 million for hired trucks to transport the commodity to schools in Turkana,” said Ms Bungei.
According to Kilimo Trust Country team leader Antony Mugambi, partnership with the women group has empowered them expanded their investment in terms of quality and quantity.
“We have negotiated businesses links with 30 cooperatives in Uganda to enable the group attain steady supply of beans,” said Mr Mugambi adding that doing business online has helped the group to expand their market scope.
A group that started with six employees in 2016 when they started supplying to schools has now advanced to 43 employees, 22 men and 21 women.
According to East Africa Cross border trade bulletin, 59,000 metric tonnes were traded in the second quarter of 2021.
Kenya is usually a structural deficit to dry bean with Uganda and Tanzania accounting for 82 and 14 percent of the exports respectively.
Reports by Eastern Africa Grains Markets and Trade-Ratin, dry beans prices are expected to trend seasonally but will remain above 5 year averages due to increased domestic and regional demand coupled with reduced production due to heavy rainfalls last year that reduced carryover stocks.