September was the end of the 3rd quarter of Nuru’s operations. During this quarter, the Community Economic Development (CED) program witnessed a dramatic increase in Missingi wa KAPESA (Mwak) basic group savings. Average saving per saver increased by 119% from 54Ksh (Kenyan shillings) per month per saver to 118Ksh. Overall, CED members saved more than 183,368Ksh in this last quarter.

A number of factors played a role for such dramatic increase in savings. The first and most important one is the relentless effort of the CED team. CED Field Officers have made house-to-house visits and encouraged Mwak savings club members to set aside part of their increased income from their good harvest in savings. CED also provided community financial trainings in different subjects, the most important one being “the importance of savings.” At this training, members are taught how savings could help them to weather economic shocks. Most of Nuru farmers have achieved a bump in their income thanks to the extension services provided by the Nuru Agriculture program. Members who are farming with Nuru increased their maize harvest by 123% this past season. The CED Mwak savings scheme provides the opportunity to save some of the increased earnings from the good harvest.

Before joining Mwak savings clubs, CED members had no opportunity to save money in a secured and easily accessible ways. Most of them used to save by giving away their money to families or friends who in most cases don’t pay them back. If it is paid back at all, it will never be as per agreed timeframe and conditions. Others used to hide their money in unsafe locations, usually under their mattresses. The risk associated with this mode of savings is obvious. The stash of money can easily be stolen, blazed by fire or eaten by rats. Another means of savings is purchasing fixed asset as a means of putting aside money for future use. The problem with fixed asset is rigidity: it is not easily convertible when there is demand for liquid money. Farmers usually sell fixed assets such as land or cattle at give away prices when they face a pressing need for money usually during emergencies.

Although the actual return from traditional ways of savings is negative, farmers in Kuria West district still opt to save money because the risk associated with not having money for emergencies is much worse. Farmers usually face financial problems when a family member is sick or they run out of food due to natural calamities. When savings are not available, they are obliged to get a loan from local moneylenders at a monthly interest rate of nearly 30%, which is worse than the money lost due to negative returns from saving money in a traditional ways.

The Mwak savings program provides Nuru farmers with the option of cost effective and accessible savings service. Besides enabling savers to achieve a secured economic condition, the savings has one important outcome. It shapes the behavior of savers to committee part of their increased income for future use. Group members realized the importance of savings and take actions that shape their future security by continuous enrollment to the CED group savings program. The enrollment of an additional 183 groups in the new scaling sub-locations of Ngisiru, Komosoko, Nymotambe, and Nyamarnya in the 3rd quarter is a witness of behavioral change and increased community trust in the CED savings and financial literacy programs.