TOPIC OF DISCUSSION.

HISTORY OF RIVERBANK AND THE DAMNATION OF FEAR MENTALITY.

Riverbank Credit 2008 (Presently registered as Riverbank Credit SACCO Limited) is a special purpose vehicle for Riverbank Crescent Self Help Group-Registered in 2005. This body was formed by 7 members in 2002 to address various philanthropic & development agenda in their environs and also, provide credit on a merry go round basis relying on Character of the borrower, Cash flow and Conditions of the loan given without security.

Merry Go Round /ROSCA(As at 2002)

It was and still is customary for groups to gather money together and pass the total sum collected to one of the members on rotating basis as a boost. Traditionally the beneficiary receives the money with ‘no strings attached’ i.e. with no arrangement to return the same to the common kitty at a future date. This group varied the terms of merry go round such that the amount collected would be deemed to belong to the group as share capital and all interest paid by borrowers would also be ploughed back. The merry –go round pool would be on monthly basis. What made this group unique was their desire to see the money grow by defining two items namely: Purpose and Repayment arrangement. Availability of credit was defined by what the applicant intended to do with the loan and comparative repayment arrangement i.e. the opportunity cost of lending one member in preference to the other.

Once the merry - go - round pooled the money together, the members had tacit arrangement to make the money available only to the most deserving case in terms of business opportunity. They would sit together and listen to potential applicant’s reasons for credit request and then decide which case appeared short term and certain. The pool money would be given to the most promising case to be reviewed at the next meeting. The understanding was that on every next meeting, the ‘borrower’ would either return the entire amount loaned and 10% thereof being interest or only 10% interest and a request to continue trading with the amount. With the passage of time three events took place which were of significance 1) . Demand for the ‘Loan’ money went up therefore a committee was formed by the group to oversee lending, verify viability of loan requests on the ground and daily collection of interest 2). Some members who had alternative sources of funds would bring in money to the pool mainly to sustain the new enthusiasm this was generating 3) Outsiders but mainly subsistence traders majority of which earned less than a dollar-a - day came for credit facility 4) With the advent of people outside, the group started to experience the first case of default.

The significant feature all along was that Riverbank pioneers developed either better skills to meet challenges or referred externally to get support rather than shying away from the challenges. The activities of the group was noted by a local chief who referred them to local Social Development Officer and in May 2005, the merry go round group registered the name and style of Riverbank Crescent Self Help Group. Still the group maintained its philanthropic agenda but now had the legal structure to regulate its activities, pursue non-paying loan beneficiaries through legal means and keep their money in a bank account. It was in this period that a European gentleman, introduced to the officials by their contact at Financial Sector Deepening (FSD)Nairobi, began voluntary services to help the group draw the first 5 year Strategic Plan. The plan recognised that the lending methodology was unique; the philanthropic agenda of the SHG was aligned to Millennium Development Goals but that the organisation had to address governance issues if it were to avoid sinking like the rest. The 5 year action plan was drawn, shared with the prospective development partners and stakeholders including FSD .

In December 2007, Riverbank Crescent Self Help Group passed a special resolution separating the lending function from other humanitarian/ philanthropic activities by creation of a special vehicle ” Riverbank Credit” to work independently, recruit personnel, open entry to all low income people keen on accessing credit and manage the micro-credit activities professionally. A criteria for ‘acceptable’ accounts was set and the new body was tasked to filter and either accept loan accounts or reject and write off bad loans from the shares of pioneer members who sanctioned/originated the loans.

Riverbank Credit began operations in June 2008 and commenced operations at a shed along Ronald Ngala street with 50 loan accounts with a total loan figure of Kshs 191,000/=. By December 2008 the Lending Arm had recruited 1,938 members with a loan book of Kshs 1.6million.

As a result of need to be a regulated organisation. The Self Help Group applied, was vetted and given status of SACCO (Savings and Credit Society Limited by guarantee) in February2009 maintaining the clientele but now able to provide savings as a product. Under SHG/CBO members participating in finance related activities was limited to Credit products which though popular, meant a higher risk because proper KYC on a customer can only be best obtained under normal/voluntary environment when a person is saving money and not under duress when a person is getting credit .

The challenge with maintaining an all inclusive (open door) policy as a SACCO was a serious consideration because by tradition, majority of savings and credit groups are usually homogeneous- meaning that majority of SACCOs are traditionally either employees of the same company, crop farmers in the same village or people sharing the same bond as source of income (Fishermen etc) Riverbanks unique origins meant that it would have people of no common bond other than the need for finance. In addition, Majority of other SACCOs lend members based on the homogeneity and as a result the repayment arrangement is always either to come from common employer or common source. Evaluation of credit often based on Salary which is routed through the account. Purpose of the loan is hardly taken into consideration as most loans are for consumer purposes. On the contrary, purpose of the loan is the key security in Riverbank loans since the loans are given based on evaluating the type of business money is to be applied for. The main risk with open door approach is that a few societal misfits try to take advantage even at a small scale by borrowing with no intention to repay often through giving falsified details. To counter this, Riverbank has established a robust credit evaluation process that allows the field Credit Officer to understand fully the business activity

RIVERBANK JOINS KUSSCO-2010
Upon converting to savings and credit society. The organization has joined umbrella body for co-operatives . This has given Riverbank an additional buttress as the mother union of co-operatives has a number of products mainly loans of long term nature as well as tailor made products to benefit SACCOS as listed below:-. One example of these is that under existing arrangements with CIC insurance. Riverbank has in the past been using Ndovu insurance agency as agency for registering members insured under the group scheme being sold by CIC insurance. The rationale behind this is that insurance underwriters should pay 10% commission to the insuring agency and these resources would be ploughed back as an extra benefit Riverbank continues its expansion and has gone as far as setting up satellite services in Kibera, Kayole and the main office. The main driving factor is a realization that the thirst of the underprivileged to do business can never be satisfied either by the assurance of GRADUALISM –That they may save year in year out until one day their savings would be sufficient to support their business dreams or pacifist DESPONDENCY, that they will sit back and accept their station and circumstances without question . This formed our new motto: ‘PEOPLE NEED MONEY’. Majority of financial institutions spend days on trainings, spend resources on providing refreshments to the subsistence traders and for recreational trips. Our understanding with the clients is based on one denominator. Acknowledgement that the potential of the underprivileged deserve to be unlocked and the key to realization of such dreams is MONEY.

Riverbank created products like:
a) Investment savings Investment savings gives the underprivileged “wealth consciousness”. An opportunity to save money not only for a rainy day in the future, but to grow their deposits in blocks with the long term view that one day, they will have money ‘working for them’ instead of they working for money all the rest of their years. LENGA KIKAPU as the name suggests is a term deposit account whereby the member sets a target say KShs 5,000/= as the long term objective. They are allowed to deposit as frequently as they can by cell phone, in person, by stamps (loyalty badges sold by trusted agents at a fee). They are supposed to reach their targets in 3 months and then can let the deposit mature in 3, 6,9 or 12months as they intend. The deposit earns interest at the rate of 5% per month or a whooping 120% per annum for the 12month Lenga Kikapu or rates to be negotiated on case by case basis for placements below 12 months FOSA SERVICES i) Allowing clearing service (deposit and clearing of cheques and the advance payments against cheques with a minimal charge. ii) Remittance of insurance premium at a reasonable commission/profit iii) Payment of utility bills e.g. .water and electricity at a very low charge to even none members. c) MICRO HEALTH SERVICES Riverbank realized that most of their customers are unable to pay hospital bills in the event of sickness and disease . They therefore saw the correlation between poverty, disease and delinquency. As a result Riverbank Credit in conjunction with CIC Limited, NHIF provides their members an affordable healthcare program which at present is fully covering in-patient hospital services In the in – patient medical cover program.The requirement for the product is that the member pays Kshs 3,650/= per annum for in patient medical cover. The following benefirts then accrue to the member : • The member and entire family of up to ten are covered at Government recognized medical institutions all over the republic including Nairobi, but extended to all districts in the country. • The medical cover amount is unlimited as long as total group expense is still below KShs 40.0million • Loss of income reimbursement of Kshs2,000/= for a maximum of 52 weeks • The principal contributor in the scheme enjoys funeral cover of Kshs 30,000/= payable without cavil or contestation upon notice of death The product is eligible for INSURANCE PREMIUM FINANCING meaning that customer may pay the insurance in installment form or pay 50% and RVBNK pays for them the remainder for coverage of the whole family. The payment is treated as a loan recoverable in four months . d) KADOGO LOAN. This product is a subsistence loan of Kshs 500/=which helps customers upon emergency case without any hidden charges. e) INSTANT LOAN The torch bearer product of Riverbank, All members are entitled to a first loan of Kshs 2,000/= after seven days from the date of registration subject to business performance . All adults with national ID , having registered as members of Riverbank are entitled to this loan

ADVANTAGES OF JOINING RIVERBANK CREDIT SACCO. • Riverbank has many benefits when joining and as a member of this SACCO. Upon joining Riverbank a person gets an automatic stand a lone funeral cover of Kshs. 10,000 this amount will be given to your family if tragedy of death occurs to the member. Because the funds would have to be channeled through Riverbank, this reduces exposure of lending • Advantages when already a member, are being able to save money and get a loan of twice you’re savings. You don’t have to come to the riverbank offices just to save your money; we offer services of field officers who come to your home or place of business to collect your savings. • If you are a member of our micro health insurance then loss of income bestows you get a cover of ksh.2, 000 per week, for 25 weeks. In the case of hospitalization the same health cover pays your entire bill. • Riverbank Credit uses advanced IT core banking platform to keep records of the members. There is therefore a good track record of members performance which is not available with all other SACCOS. • The group is in the process of connecting the data base to ATMs of Co-operative Bank. Members will then be able to acess their accounts through ATM • Membership to Riverbank enables the customer to get modern customer statement

INSIGHT INTO THE CHARACTERISTICS AND NATURE OF LEADERSHIP Vision To create an economic environment where the ability of the poor to improve their lot is not determined by the wealth inherited but by the individual’s drive to capture business opportunities and make the best use of such opportunities The Mission To be the leading provider of REAL micro finance services in Africa through deep understanding of financial needs of the economically disadvantaged and use all forms of INTERMEDIATION including Information Technology to support innovation of solutions to meet such need Ownership Ownership of the organization is by individual shareholders who contributed to seed capital for Self Help Group. The newly registered members have the option of being shareholders thus bound by the covenants and philanthropic creed or being preference members who join with a view of accessing Credit products availed by the organization LEADERSHIP: Currently the function of oversight is handled by the Governing Council i.e. Shareholder members with the following as Office Bearers : Chairman-(Non-executive) Alfred Nyamitta- Ex- Customs Officer at JKIA and Kisumu based businessman V/Chair- -(Non-executive) Damaris Adhiambo- Mombasa based Airlines Officer and business woman Christine Awour – Treasurer and Executive Board member, BComms Degree, Post graduate Diploma in Banking, Ex- Banker , Ex- Employee of Metropol E.A. Ltd (Former representative body of Dunn & Bradstreet Credit Rating Sam Odhiambo – CEO , MBA, Cert. In Enterprise Risk Management & Econometrics, Dip. Banking, Dip Human Resources, Data Base Administrator- Finacle , Ex-Banker (Senior Credit Manager)with over 20years Banking experience with the following Banks (Trust Bank Limited, Universal Bank limited, Paramount Bank Limited, African Banking Corporation Ltd, Diamond Trust Bank Ltd , Equity Bank Ltd) .Took the position of CEO at Riverbank Credit , in 2009 took up consultancy appointment with Adra International , Position Senior Manager –Banking and trade finance BOARD OF DIRECTORS Plans are underway to appoint professional Board of Directors with security of tenure. The following designate team are to take positions : George Owour – Chairman (Non-executive) , BSc Engineering- Chief Engineer with KPLC & Chairman Runda Water Association, Chairman – Village Development Association , Property developer. Elizabeth Omolo -Board Member – Ex CBK Director, Ex- Director at Kenya School of Monetary Studies , Lecturer - Kenya School of Monetary Studies , Victor Ogutu- - Board Member and V/Chairman - BA Architecture , Asst Director Housing – Ministry of Local Government. Opinion leader in several community projects Sam Odhiambo – CEO , MBA, Cert. In Enterprise Risk Management & Econometrics, Dip. Banking, Dip Human Resources, Data Base Administrator- Finacle , Ex-Banker (Senior Credit Manager)with over 20years banking Experience in Banking (Trust Bank Limited, Universal Bank limited, Paramount Bank Limited, African Banking Corporation Ltd, Diamond Trust Bank Ltd , Equity Bank Ltd RIVERBANK IS RECRUITING AN EXTRA BOARD OF 5 TO SUPPORT THE EXISTING BOARD IN STRATEGIC PLANNING For details e-mail: riverbank.credit@yahoo.com or info@riverbankcredit.com

SOCIAL DIMENSION i. Visiting the sick in children’s home River bank has made an effort of visit the sick in children’s homes around Nairobi and helps with supplying food and comfort to the sick. Riverbank takes pride in helping the society especially the children because they are the next generation to lead this country to betterment. ii. Donating clothes to children’s home and the less fortunate.
Riverbank has donated clothes, books and food to children’s home in Kenya as part of help the youth especially those less fortunate. We take part most of the festive seasons to remember those who are less fortunate than us, to share and spend time with them. iii. Help business people grow Riverbank deals with helping people grow or expand their businesses to new heights. Riverbank doesn’t give loans for personal use but for business purposes only. We like people with business activity so that we help them grow and for them to help others. iv. Empowering the youth There are many benefits available to a youth after joining our Sacco; first we provide an opportunity for them to save a small amount of money after that we give a loan for them to start a business but before we advise youths on which business to venture into. Investment opportunity Riverbank offers business men and women a chance to save their money and get high returns in the process, products like Lenga kikapu helps a person get up to 48% per annum. We also have property development loan which gives a person three times their savings so as to enable him to build a home for themselves. Riverbank has taken a step further to help farmers get money money to plant and buy necessary for farming in order to get returns .this kind of facility is covered with the miwa product. Training interns We training credit officers for some weeks and after their training a certificate is a warded to them. We also offer internship for Kenya college students and also international students where they learn practical skills, knowledge which it increases their chances of succeeding in their careers.

SELF DEVELOPMENT Riverbank credit partners with various organizations willing to combat poverty. We do not share every kind of belief . But one school of thought , known the world over as the – LAW OF ATTRACTION has also captured our attention with their statement “ As a man thinketh , so is he” with all due respect to religion of Christianity which we all profess, we have allowed writers on the “Law of attraction” concept also to put self development books on our website such that the underpriviledged may also learn to dream big as well as becoming functional in the use of our credit products. It is ironical – but one day we hope they will no longer be driven by FEAR, FEAR OF HUNGER, FEAR OF DAMNATION,FEAR that if they do not borrow then they shall sleep hungry. THAT one day THEY WILL NOT HAVE TO BORROW

To create an economic environment where the ability of the poor to do business is not determined by wealth inherited but by the individual's commitment to capture business opportunities and make the best use of them.