Mzee Zacharia Kanyotu is a small scale farmer whose life has greatly improved thanks to loans he received from the Savings and Credit Cooperative Societies (Saccos). "If it was not for the loans we receive from the co-operative societies, we would not be able to send our children to school, developed our homes, pay for unforeseen urgent needs or improve our farms", he says.

Mzee Kanyotu is one of thousands farmers in rural Kenya who has seen the benefits of Saccos. For farmers in the rural areas, hard cash is normally difficult to come by except through ventures like these. Saccos are a concrete process of fighting against poverty by developing the hidden and non-productive financial resources of the rural populations. Saccos provide financial self-help to its members who eventually learn to tap their potential.

90'000 members For over 30 years, Nyeri Farmers Sacco has served the farmers in Nyeri District making a big difference in farming. As a result, Karatina is recognised for its agricultural achievements. The society which started in 1974 as a union banking section of Nyeri District Co-operative Union was transformed to a cooperative society in 1998. "This was done specifically to mobilise savings for its members", said the operations bank manager Karatina branch, Mr. George Githinji. The other nine co operative branches include: Nyeri, Mukurweini, Othaya, Ruringa, Mwiga, Naromoru, Nanyuki including Karatina town which is the main branch.

The Nyeri Farmers Savings Society boasts of hosting over 90, 000 members in all of its branches. A lot of water has passed under the bridge since its conception. Now it has a high capital base and a share value of over 50,000 members who pay Ksh 100 membership fee. "At the moment, the society is stable and has assets such as buildings and land which appreciate in value", Mr. Githinji said. The Sacco serves coffee farmers, tea farmers, dairy farmers, businessmen and women, and other small cooperative societies.

These include the Baricho Farmers Co-operative Society, Kiama Farmers Co-operative society, Mathira Farmers Co-operative Society among others. The co-operative societies specifically help in marketing farmers' produce. In addition to the produce which guarantees a certain amount of money regarded as shares, farmers may also choose to increase their shares by depositing them in the bank. Credits All Sacco members are entitled to loans. These may be given out to pay for school fees, improve farms, and repay debts, capital to start a business or to buy assets. In the Mathira Sacco branch alone, the total loan given out for 2005 amounted to Sh5.1 million. "We have been having cases of defaults where farmers defect to other Co-operative Sacco groups without repaying our loans", complained Mr Githinji. He said this was a big hitch in the development of the bank.

However, a debt collectors' group has been formed to follow up on those who default. Alternatively, those who guaranteed for the loans will be required to re-pay the loans themselves. According to Mr Wamae Wanjau, the Baricho Farmers Cooperative Society accountant, "the Cooperatives Law Act does not allow one to join two societies at the same time. This is a punishable offence with up to two years imprisonment or a fine of Sh50,000.

When farmers default due to bad weather which results in poor harvest, the farmer will be given an indefinite time to re-pay the loan". Management The Saccos are managed by the farmers themselves. They hold an annual general meeting to discuss matters arising from the running of the societies. A team of 60 delegates are elected to spearhead the running of the societies. These then elect within themselves nine directors who run the Saccos.

They arrange and organise several meetings through out the year and do not earn a salary for their work. Instead, they receive a seating allowance. "The elected delegates must meet certain criteria. This includes having shares amounting to Sh50,000 in value. Without proper management, the society may end up splitting and forming other societies. At one time we only had one Savings and Credit Society serving Mathira, but it was split into 13 different societies", said Mr Githinji. "Sacco has to work competitively to attract farmers", he added.