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NEWSLETTER OF THE 2NK SACCO SOCIETY LIMITED

SEPTEMBER 2015

Improving Member Incomes with Road Safety Campaigns


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CHAIRMAN’S MESSAGE

Branch Network Will Enlarge Sacco Base BY JAMES KAHIRO

O

ne of the most important achievements

for our Sacco, as we celebrate our accomplishments in the past two years, is that 2NK Sacco now has its own front office savings activity, popularly known as FOSA. The FOSA opened up to the public in February 2014. This followed the licensing of the Sacco by SASRA, the regulator for deposit taking Saccos.

The licensing itself was a ma-

mium financing among a host

jor achievement for the Sac-

of other products.

co,

as we are the first

The Sacco, in its growth plan,

transport Sacco to be regis-

hopes to embrace branch net-

tered as such.

work, as entrenched in its 5

And members of the public

year strategic plan. This will

have also continued support-

enable us to serve our cus-

ing the Sacco, a gesture that

tomers better, while also en-

the Sacco wholeheartedly ap-

larging our customer base.

preciates. We pledge to con-

God bless you all!

tinue offering them excellent services. We are in deed, happy that

FOSA Products Asset finance Fixed deposit account

we are already offering a

School fees loan

wide range of products which

Group accounts

target all levels of the com-

Individual account

munity, including develop-

2NK little angels savings accounts

ment loans and insurance pre-

MISSION STATEMENT: ―TO IMPROVE THE LIVELIHOOD OF OUR MEMBERS BY PROVIDING EXCELLENT SERVICES.‖

VISION STATEMENT: “TO BE THE LEADING TRANSPORT AND FINANCIAL SERVICES PROVIDER IN

KENYA.”


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CHIEF EXECUTIVE OFFICER’S MESSAGE

‘ We Remain Preferred Choice’ A ban on importation of low capacity vehicles was also a major drawback particularly for the better part of the year 2014, but we thank the president for having come to our aid at the end of 2014, lifting the ban on importation.

It has been close to 2 years since the last edition of our magazine. And it has not been an easy walk. But we can truly say God has been faithful this far. What with all the new regulatory requirements, in April 2014, when all vehicles were required to be fitted with new, much more expensive speed governor, amid the confusion of just a few accredited fitters and a scarce supply. This caused a lot of inconveniences to investors, who were subjected to long periods of waiting, losing a lot of business as the vehicles were not allowed on the road in spite of having functioning, previously fitted speed governors. A ban on night travel did not help the situation, with the effects being felt again by the investors. In as much as 2NK Sacco is always at the forefront when it comes to compliance matters, coupled with our determination to reduce road carnage, which was the main reason why the government banned night travel, there was need to also address the issue of heavy commer-

Anne Kinyua, Chief Executive Officer

cial vehicles doing night travel as well as they also were a contributor to these accidents.

On a positive note, the Sacco has continued making positive strides in line with its vision, “To be the leading transport and financial services provider in Kenya.”After the lifting of the ban on importation of the low capacity vehicles, the Sacco has supported members tremendously in acquiring the new model of Matatus, popularly known in the matatu quarters as „choppers‟. This has not only provided the customers‟ preference but further given the Sacco a competitive edge while remaining relevant in the transport business.

Transport World is published by Investment News P. O. Box 20257 –00100, Nairobi, Tel: 0773 –991820 on behalf of 2NK Sacco Society Limited EDITORIAL AND DESIGN: Nairobi Editing and Publishing Services.


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Lead Story

Improving Member Incomes with Road Safety Campaigns 2nk sacco Managemeny Board members

By NGULI MULI

O

ver the years, 2NK Sacco has striven to improve business for its members. Key in this effort has been measures to reduce road accidents. Road accidents are not only a problem to the Sacco, they are a problem nationwide. They eat into the profits of transport

operators. And they kill people—innocent people. Statistics graphically demonstrate the seriousness of the problem. According to the National Transport and Safety Authority (NTSA), every year, about 3,000 people die on Kenyan roads. Regionally, Nairobi comes first in that list; accounting for about 20% of the

Board members in a planning session. Proper plans have ensured the t sacco prospers

total fatalities. By 2013, accidents had reached an alarming 3,318 deaths. The larger fraction of the fatalities is made up of pedestrians. Passengers follow closely, then motorists. The lowest number of deaths is that of drivers.


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With fleet control management system, the vehicle remains always visible The segment of the population most affected by these accidents is the 2444 year-olds bracket. While at that age people are more mobile, the NTSA says they are also more reckless. For example, they are unwilling to use foot bridges, leading to many pedestrian deaths. NTSA also notes that the same age bracket won’t pause their mobile phone activities to either cross It was also established other day of the week. roads carefully or drive that more accidents occur Wednesdays are the safon Saturdays than on any with full concentration. est days to travel or use

How to Develop Fleet Vehicle Management Plan When you develop a customized fleet vehicle management plan, the first step is to benchmark your performance against the standards in the industry. Often comparing vehicle performance to industry averages quickly reveals which assets need immediate attention. Once the benchmarking process is complete, the creation of a strong fleet vehicle management plan has two phases: 1. examining all current vehicles to

make sure their specifications are optimal for the functions they are required to perform and 2. thoroughly reviewing company purchasing policies to achieve maximum discounts. To develop a fleet vehicle management plan, you should do an in-depth analysis of each vehicle. Analyzing fuel economy profiles is a Turn to page 8


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es. The two leading causes are drunk driving and over speeding among drivers. It is why 2NK Sacco is in the forefront in taking measures to fight road carnage. We take pride in the fact that we have contributed to the restoration of sanity that is now on our roads. Through vigorous campaigns, road users are becoming more aware of the dangers posed by careless use of roads.

road in any way, according to statistics. This finding points to drunkenness as being a major cause of road accidents. Further, most accidents are recorded between 6pm and 10pm. Reduced enforcement of traffic rules in these hours could contribute to these findings. These numbers, unfortunately, have far reaching effects on the individuals, affected families, economy and the investors in the transport sector. One

We, of course, are a part of a group involved in campaigns to reduce road accidents. The Government has collaborated with the players in the transport sector in these road safety campaigns.

fact is that the bulk of road accident fatalities is made up of young and productive citizens; many of whom are breadwinners to their families and highly productive citi- It is also necessary to acknowledge other playzens. ers that have stretched The estimates of the ecotheir arms to educate the nomic losses in annual Kenyan public on matters road accidents are at relating to safety on the about Shs45 billion, exroads. Matatu Owners cluding the actual loss of Association, East African life. Breweries, Global Road The sad fact is that most Safety Partnership, World of these accidents result Health Organization, from very easily preventa- John Hopkins Internable driver-centered caus- tional School of Public


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Health, World Bank Global Road Safety Facility, Association of Safe International Road Travel and The World Resources Institute are some of them. In April this year, the campaign Save 1000 lives was launched jointly by the NTSA and National Road Safety Trust. The campaign listed its key goal as reducing the number of road accidents on our roads by a third in the next 24 months. It intends to mobilize the private sector to effectively actualize and manage its programs. The result of all these activities has been a decrease in road accidents—and therefore, hopefully an increase in the profitability of transport operators. Last year, for example, 2,907 deaths on the

road were recorded; which was an improvement from those recorded in the previous years. This year, the numbers should be much lower, going by current trends and predictions. It is estimated that within the first seven months of this year, about 1,085 people have died in road accidents. 2NK Sacco has played a key role in this effort to make Kenyan roads safe. Its new regulations ensure employment of drivers with good conduct. Towards this end, it has intensified education of drivers on road safety. And above all, we have installed motoring gadgets that have made our vehicles the safest on the roads and reduced losses incurred Turn to page 10

How to Develop Fleet Vehicle Management Plan From page 6 good basic performance indicator. Fuel, especially in times of high gas prices, is a primary cost component in fleet vehicle management. With improved gas mileage, every mile driven is money to the bottom line: just good fleet vehicle management. Examining maintenance records and forecasting maintenance needs is another important element of good fleet vehicle management. Scheduling and tracking maintenance costs can help identify how your fleet vehicle management is working for you. Looking at the strategy (or lack of strategy) involved in cycling your older vehicles can provide im-

portant insights. Cycling too soon or too seldom can cost money in fleet vehicle management terms, and more importantly, can drag down your profit picture. The second phase of creating the fleet vehicle management plan, examining company purchasing policies, can yield considerable savings. It is important to understand the cost impact of acquiring vehicles from a dealer versus acquiring them direct from the factory. Fleet vehicle management means managing each vehicle as a component of your fleet, not as an individual business purchase. Advance planning and acquiring vehicles direct from the factory can mean substantial cost savings.


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MARKETING

WHY ADOPT SOCIAL MEDIA MARKETING? By PETER MAINA

S

ocial media is becoming an integral part of life online as social websites and applications proliferate. According to new data by global web index, an average user logs 1.72 hours per day on social platforms which represents about 28% of all online activity. Kenya has one of the most active online populations with users increasing in numbers every day. Majority of the Kenyans online use platforms such as facebook, twitter, l i n k e d i n , whatsapp and youtube. Social media therefore pre-

ships online.

sents great mar ke ti ng opportunities for businesses besides building stronger relationwith customers

To some entrepreneurs, social media marketing is the ―next big thing‖ a temporary yet powerful fad

that must be taken advantage of while it’s still in the spotlight. To others its buzzword with no practical advantage and a steep c omp lic ated le arn ing curve. Since it appeared quickly, social media developed reputation by some for being a passing marketing interest and therefore unreliable. The statistics however illustrates a different picture. 92% of marketers in 2014 claimed that social media marketing was important for their businesses with 80% indicating their effort increased traffic to their website. This demonstrates a huge potential for social media marketing to increase sales. Some of the ways social media marketing can be used include:


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To increase brand recognition: This simultaneously makes brand easier and more accessible to new customers and makes it more recognizable to existing customers. A frequent twitter user could hear about a company for the first time only after stumbling upon it in a newsfeed or a customer can become better acquainted with the brand after seeing its presence on multiple networks. To improve brand loyalty: Brands that engage on social media channels enjoys higher loyalty from their customers due to the advantages social media gives when it comes to

„92% of marketers in 2014 claimed that social media marketing was important for their businesses‟ connecting and interacting with their audience. To convert more customers: Every post you make on social media platform is an opportunity for customers to convert. When you build a following, you will simultaneously have access to new and old customers and you will be able to interact with all of them. Every post or comment you share is a chance for some-

Fleet Vehicle Management From Page 8

the road.

through bad road usage and driver misconduct.

That way, we can know and demonstrate who was at fault in the unlikely case of an accident.

2NK Sacco has embraced modern technology to help not only reduce road accidents but also to manage its fleet. The technology provided by Frotcom Limited enables 2NK Sacco to monitor the behavior of drivers and other road users on

Combined with internet access, 2NK members as investors can literally watch over the movement of their vehicles as well as communicate with the driver for fresh instructions and updates.

one to react and every reaction could lead to a site visit and eventually a conversion. Richer customer experiences: Take an example where a customer complains about your product on face book or twitter; you can immediately address the comment, apologize publicly and take action to make it right, or if a customer compliments you, you can thank them and recommend additional product. It’s a personal experience that lets customers know you care about them. Social media marketing therefore is a decisive tool for business success now and in the future. It’s not only a tool to try and increase direct conversions but also a way for a business to become a part of specific community that their customers participate in. The relationships made through social media can create reliable customers and business relations that make for long term brand advocates.


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INSURANCE Questions that help you answer the question:

DO YOU NEED LIFE INSURANCE? By PURITY WACHIRA Not everyone needs a life insurance cover. But if your children, partner or other relatives depend on your income for living expenses, then the answer to the question: Do you need life insurance? is a YES. You probably want a life insurance cover since it will help provide for your family in the event of your death. The following questions will help you make such a decision: 1. What is life insurance? This is insurance that pays out a sum of money either on the death of the insured or after a set period How does it work?

suffer a serious injury or become permanently disabled. There are two types of life insurance (a) Term life insurancethis policy runs for a fixed period of time. This kind of policy pays out if you die during the policy. There is no lump sum payable at the end of the policy term. Life insurance works the same way your car insurance works-when you take out a life insurance policy, you pay a monthly premium to your insurer and if something goes wrong, your life insurance provider helps you cover the financial side Life insurance cover helps you maintain your life style if you become ill,

(b) Whole-of-life policythis policy will pay out no matter when you die, as long as you keep up with your premium 2. Do you need it? If you have children or a partner who relies on your income, or even a family that lives in a house with you pay-a life insurance policy can provide for them even when


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you die. You might also need a life insurance cover that will provide for your funeral expenses. You can’t rely on the government to take care of your family. If you want to provide for your family even when you die, then life insurance is a MUST. 3. How much does it cost? Often just a few shillings a day is all you need to provide for your loved ones with plenty of financial protection-depending on your age and health status. Monthly payment that is premiums do vary, so it’s a good idea to shop around, check exactly what is covered for the level of monthly payments. The price you pay for a life insurance policy depends on a number of things. These includes: the amount of money you want to cover, the length of the policy, your age, the condition of your health and lifestyle.

For example, the younger you are, the less likely you are to die from a medical condition, the cheaper your policy is likely to be. 4. Have already got it? If you have an employee package that includes benefits related to life insurance cover, this will cover you for a multiple of your salary and you may not need an additional life insurance cover.

whether this policy covers all your needs, if it doesn’t then you need an additional life insurance policy. Bear in mind, when you stop working for your employer, you won’t be covered under that policy anymore. *No matter what future holds, rest assured that life insurance will give you a peace of mind

It’s up to you to work out,

Ah! Ah! Have you heard of ... … the beautiful girl who was admired by four men. A singer, A hunter, A doctor and a fisherman. One day she went to wash her clothes by the river. Coincidentally the four men were there. All of a sudden a crocodile bit her and dragged her into the water. The singer immediately composed a beautiful song; the crocodile raised his head above the water to listen…The hunter shot dead the crocodile and the girl floated on the water. The fisherman dived in and brought her to the shore, then the doctor treated her

and she was well again. Now who deserved to marry the girl among the four???

COSTLY MISTAKES . A baker was asked to print 1st John 4.18 on a wedding cake and he forgot the “1st “and printed John 4.18. 1st John 4.18 reads “There is no fear in love. But perfect love cast out fear because fear causes torment. He that fears is not made perfect in love.” John 4.18 reads “For you have had five husbands; and he whom you now have is not your husband.” Stay blessed and remember that small mistakes are not always that small. - By George, Audit Dept


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CROP INSURANCE: A Risk Mitigation Tool Crop insurance is a vital part of the world’s agricultural industry and a key risk management tool for the modern farmer. Despite their best efforts, farmers will often suffer because of drought or even excessive rainfall or hail and frost in some parts especially during harvesting. We cannot control weather patterns and therefore extreme weather conditions can hit a crop at any stage of development. A farmer can only be at peace when the whole crop is harvested and safely in the store. Till then the farmer isn’t sure of the harvest. It is due to such uncertainties that farmers take insurance as a risk mitigation tool. Insurance gives a farmer some peace of mind that if extreme weathers prevails then he/she will be able to come back next season.

Insured Events The insurance offered is mainly a multi-peril cover. The crop is covered for Yield Losses, arising out of any or a combination of the following weather perils: 1.

Excess Rains

2.

Drought

3.

Hail Damage

4. Frost Damage 5 Fire 6. Uncontrollable pests and diseases

To get insured To get covered, a farmer will need to provide the insurance company with historical yield data, say for the 5- 10 years. This will establish the longterm average over the years. For example, most large-scale farmers in Moiben have produced on average 15bags/acre of wheat. Insurance will cover up to 65% of this average. This is referred to as the Yield Guarantee. Thus, if a farmer chooses a 65% Yield Guarantee, he will be covered up to 10 bags/acre. The price per bag is pre-agreed at the point of insurance and will not be altered at the point of harvest. This price should not be speculative. Crop insurance is taken early enough to avoid the farmer or the insurer reading the season. Farmer should factor insurance as a cost of production and budget for it early. More

Barley crop affected by drought and more farmers are insuring their crops and especially so, for the large farmers. Crop Insurance and Credit Access: One way of protecting agricultural credit is through crop insurance. Banks will normally recover agricultural loans from farmers by asset recoveries (tractors, combines). Surely, a humane way of recovering these loans would be through crop insurance. The insurance company pays the bank directly after a bad season. The farmer maintains his creditworthiness and is able to access finances for the next season. Crop insurance makes farming a less risky venture and therefore attractive. For more information on crop insurance, reach us on: agriculture@cic.co.ke and 0723531540/ 0703099156

*Article by Fredrick Kinoti, Agricultural Underwriter, CIC General Insurance Ltd


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Qs and Answers A column that answers common questions from motorists

Why Are My Headlights Dim on My Car? Why might the headlights be dim on my vehicle? We've checked the bulbs, the switches and the battery is fine. ANSWERS: Check the lens. There might be dirt on the inside of it. If it's the alternator your battery would not be charging. In my case the battery would not charge and the lights would dim. We checked a wire coming from the car's comput-

er to the alternator and found the voltage was under 12 volts. Check the fuse It could be fuserelated. Have you looked into the fuses? Have you checked the headlight's plastic? The front plastic ages and can dim the light from the bulbs. You

may also have condensation in the headlamp housing. Adjust the lights Did you check to make sure the lights are lev-

el? There are adjusting screws above the light housing under the hood. best to pull up to a wall and see if your light are tilted up higher than normal. Also if you are running your A/C or heater at full the power drain through the alternator could cause the lights to dim. Check covers Are the covers filled with water? Are they dirty or tinted? Check with a mechanic who can see it in person. Torch it! Take a torch and shine it into the reflectors at nighttimeif they are not absolutely clear, they might need replacing.


Know your Board Members

Ephraim Karimi Vice Chairman

Paul Ichura, Treasurer

Peterson Kigotho, Board Member

Samuel Ruiru, Board Member

James Kahiro, Chairman

Supervisory Committee Allan Gakage, BoardMember

Jimna Obed, BoardMember

Elizabeth Kariuki, Secretary

William Kanyi, BoardMember

John Maregwa, Board Member

Robert Matheri, Chaimana

Richard Kimondo, Member


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