How casual chat birthed empire worth millions from a Sh50 monthly contributions

Valley estate officials at their construction site in Engineer Town, Nyandarua County.

Valley estate officials at their construction site in Engineer Town, Nyandarua County.

Photo credit: Waikwa Maina | Nation Media Group

In 2016, about five traders in Engineer Town, Kinangop Constituency in Nyandarua had a casual talk on how to start a welfare group.

Specifically, the welfare group was to help members offset funeral expenses.

They embarked on a door-to-door recruitment exercise, which turned out to be more of a frustration than a success, forcing them to change the game and open the membership to all – and this is how Valley Estate Welfare Group was formed.

At that time, the members had no meeting venue opting to meet in a hotel posing as customers.

“We finally recruited about 18 members. Our monthly contribution was Sh50, we would spend Sh20 on tea and snacks at the hotel and save Sh30 for the welfare,” said the group’s chairperson Ms Mary Njuguna.

The Sh30 savings has given birth to a multi-million venture in five years, with investments in real estate and other related fields.

The membership has equally grown to 100 members, but the group caters to the welfare of a nuclear family of each member, making it a home to 400 dependents.

With time, they have also moved from a self-help group and are in the process of registering as a cooperative society, with a department and a different account to cater for the funerals and other welfare needs of the members.

The welfare part of the group has a fixed savings of Sh250 emergency kitty, while each grieved family member benefits with Sh80, 000.

They have diversified areas of interest to mentor-ship programme for children whose parents are members, holding academic days to motivate and award KCPE and KSCE candidates, with family fun days.

Currently, Valley State Group has bought Sh1.5 million land in Engineer Town to construct a storey building that will host a library, a social hall, a modern hotel with a solar-heated swimming pool, a roof for indoor games, talents search, and other recreational services targeting the youth and the entire community.

The Sh20 million complex is set to be done in phases with the social hall taking priority followed by the library, says the group's vice-chairperson, Paul Ruoya.

Informed investments

With that growth, the group has attracted professionals from diverse fields, making the going smoother and cheap in investment areas that would have cost them a fortune.

For example, the housing plan was done by an architect who is a member of the group, saving the group thousands of shillings that would have gone to hiring such services.

The architect also advised them on cheaper but safer methods of constructing the building.

“The total costs related to the building would have gone beyond Sh30 million, but having one of us do it reduced the cost by more than Sh10 million,” said Mr Ruoya.

Nonetheless, the growth has not been a walk in the park. The group has had its share of painful moments and frustrations.

As time went by, the members felt a need to diversify in other activities, and, instead of saving the Sh50 monthly contribution in a bank account, they agreed to invest in income-generating projects.

“We then agreed that instead of the Sh50 contribution, each member will be contributing Sh5, 000 for the identified project. Real estate is our sixth project. The first one was the purchase of tents, then seats, and then utensils. With the items, we made it cheaper for members with funerals and other social events including weddings,” said the group's secretary Ms Susan Wambui.

Locally, renting a 100-seater tent costs between Sh4, 000 and Sh6, 000 a day, saving a grieving family more than Sh20, 000 hiring a similar capacity tent for five days for the funeral arrangement, and still, the family benefits with Sh80, 000 welfare kitty.

The family hiring the services saves between Sh1, 500, and Sh2, 000 per day that goes for the hire of utensils that includes plates, mugs, sufuria among others.

“Another challenge was entrepreneurship skills, which we now get from the county cooperative department. We have also received some support from well-wishers including former Nyandarua Governor Francis Kimemia who donated materials to start construction of the complex and part of the ground floor. Our biggest challenge now is opening the access road to our plot,” said the Vice-Chair.

County partnership

Nyandarua Trade Chief Officer Mr Samuel Gitaka attribute the group's success to the commitment and the continuous training given to the Valley Estate team. He said that the members will also be accorded better governance and entrepreneurship skills training that the county will support through the County Trade Fund.

“With the partnership of financial institutions, the County will link them to financial institutions that would lend to them at discounted rates while at the same time training them on Financial Management and Entrepreneurship. Banks like Equity Bank are good in training the MSMEs and this partnership would go a long way to deepen their business acumen,” said Mr Gitaka. 

Like the Valley Estate members, Mr Gitaka is optimistic that completion of the complex will ease the challenges of conference halls in Engineer town and Nyandarua County, reducing the cost of capital flight to neighbouring Naivasha town in Nakuru county.

The group secretary says they have had to hold their meetings outside the town, which is resource and time-consuming due to the lack of social hall facilities in the area.

“It's very painful for a trader to close their business to attend a meeting away from town. A hall costs Sh5, 000 for two hours in Naivasha town, we end up spending more than Sh20, 000 per meeting, an amount that would have gone to promoting groups activities,” said Ms Wambui.

What triggered the members into real estate ventures and conference hall is that most members live in rental houses with inadequate space for gatherings without interfering with other tenants.

“Members have limited space to hold family events like graduation ceremonies, and family gatherings among others. We felt the situation was becoming complicated and agreed as members to contribute money to buy the land for the hall. We hold the family fun days for sustainability and future the group to encourage our children to join the group after school,” said Mr Ruoya.

The library facility will be equipped for the learners to utilise over the holidays, in a place they can be monitored and mentored.

“Our biggest challenge is financing since we are small-scale traders, but we are happy and appreciate the support given to us by well-wishers. We recently received Sh150, 000 cheque from Women Rep Faith Gitau from the National Government Affirmative Action Fund,” said the vice-chair.