A group of former Kigali Independent University students have been able to transform a savings and investment club started at campus into a multi-million financial institutions that has created jobs and boosted the members’ incomes.

The group was inspired to start the club after attending an awareness drive by the Capital Market Authority, where they realised they could create sustainable sources of income by pooling resources to invest on the stock market or any other income-generating activity, writes Appolonia Uwanziga.  

Gilbert Banamwana and colleagues from university attended one of the many awareness campaigns organised by the Capital Market Authority.

 By the time they went home, the then students of Kigali Independent University had realised they could create sustainable sources of income by pooling resources to invest on the stock market or any other income-generating activity. The group later mobilised to form a savings and investment group.

That’s how Cycle Investment Co-operative, a savings and credit co-operative society (SACCO) created by young enterprising students at Kigali Independent University, was born.

Rwf100 coin savings per day campaign

With the co-operative of about 20 students initially, the group initiated a savings drive code-named "Rwf100 coin savings a day campaign” as part of the 2014 national savings mobilisation programme.

Banamwana says they partnered with the Capital Market Authority, the National Bank of Rwanda, the Rwanda Stock Exchange, and other related government bodies.

The group that initially had a target of mobilising Rwf360 million to start a microfinance institution (MFI). Their SACCO currently has over Rwf150 million capital base, from just over Rwf5 million two years ago when they opened shop.

They envisaged to have raised Rwf1.5 billion share capital in six years to transform the SACCO into a microfinance bank. Banamwana says they will raise the money from member contributions of up to Rwf150,000 each per year, depending on ones income.

"After understanding the country’s savings mobilisation targets, we started mobilising other students, urging them to contribute to nation-building through savings. That is when we launched "Rwf100 coin savings per day” campaign,” Banamwana says.

Ange Ingabire, the group’s finance officer, says most youth do not save claiming they do not have money, "but one can start savings using as little as Rwf100 and accumulate the funds over time”.

"I started saving as student, by the time I completed university, I had amassed Rwf3 million in savings,” Ingabire explains. She adds that being a member of the "Rwf100 coin savings per day campaign” helped her to stay focused on her savings goals. "Savings creation is about sacrificing the joys of today for a better tomorrow,” Ingabire argues.

She advises young people, particularly students, to avoid spending cash they would save on unnecessary luxuries. She says with enough capital the youth can exploit the many opportunities in the country to build their own businesses instead of waiting for government jobs.

Innocent Mwizerwa, a marketing officer at Cycle Investment Co-operative, says when they opened the group to other members of the community, they got 300 customers, adding that the client base has now grown to over 1,200 people. "Most of the customers are youth, who subscribe to different co-operatives, and students. We are targeting over 2,000 customers in the next one to two years,” Mwizerwa notes.

Evolving into an MFI

Banamwana says the co-operative, besides helping the students to save and become entrepreneurs, it sought to offer quality and innovative services, as well as help fight underemployment and unemployment among young graduates. He says by the time they left college, the co-operative had become an independent and sustainable microfinance institution, and students used the skills acquired at school to run it.

"We wanted to provide financial services "with a difference” and aimed at causing significant change among members and the general population in the areas in which we operate,” he says. Generally, Cycle Investment Co-operative targets the youth, and Rwandan students from local and regional universities and other institutions of higher learning. It serves other Rwandans, providing access to inclusive financial services.

This, Banamwana says, was inspired by the Capital Market Authority awareness drives on investing on the bourse to safeguard their financial future.

Expert speaks

Robert Mathu, the Capital Market Authority managing director, urges students in other universities and tertiary institutions to emulate ULK’s example, arguing that "creating savings using whatever vehicle is available to you secures your future and teaches you financial discipline”.

"The earlier one starts, the better they become and the more savings they accumulate to improve their welfare in future and contribute to national development.Therefore, the youth across the country should learn from this group of university students who are playing a crucial role in the community and the economy, in general,” Mathu says.

Achievements

Headquartered in Gisozi, in Gasabo District, Cycle Investment Co-operative currently employs seven permanent workers, which Banamwana says is one of their biggest achievements so far. The co-op has also started working with other co-operatives, like the Motorcycle and Carpentry Co-operative, by giving them soft loans. He says they mainly work with youth groups because "when we started the co-operative, we were targeting the youth”.

He says the MFI will expand and open more branches next year to serve youth outside Kigali. "We wanted to move systematically first to build capacity at our Kigali base,” he notes. Banamwana says the co-operative equips members and other enterprising Rwandans, especially women and youth, with skills on savings, financial and business management, as well as bookkeeping. Banamwana, however, says it takes long for young people to embrace savings groups like the one they started at ULK.

So, it is important that parents and teachers start inculcating a savings culture among Rwandans at an early age; noting that it is better for children to start learning about money in kindergarten.

Advice

Banamwana says being able to save a Rwf100 coin every day is a very important step for anyone that wishes to create savings for future investment. Therefore, the youth have to decide on the best method to save for their future. As youth, they should always have confidence in whatever they are doing because the sky is the limit if one puts their mind into accomplishing something.

Customers speak out

Syliver Mugwaneza, a Cycle Investment Co-operative customer, says he joined the co-operative last year and "I have been inspired by the work they do”. The leaders are always pushing and guiding us to be better people. "I am privileged to work with Cycle Investment Co-operative,” Mugwaneza says.