Grace Ndumia ventured into the matatu business in 2004 when the government had just started imposing stringent laws to regulate the public transport sector.
She owned a hotel in Nyeri town, and hoped the new investment would give her good returns to supplement what she made from her first business.
But, with time, juggling the two businesses became a challenge, as she was at times unaware of how her three matatus were fairing.
“Monitoring and supervising the whereabouts of the vehicles became difficult, such that I could not account for the monthly income they made,” she says.
As a member of the 2NK Sacco, she would get monthly statements of the income made from the business, but the figures from the Sacco management did not match the daily income given to her by her drivers, therefore causing mistrust.
In a span of 18 years, she says, she has sacked 20 drivers. Fortunately, her woes ended in November last year when the Sacco adopted an automation system that requires it to conduct all its operations digitally, therefore enhancing transparency between drivers and matatu owners.
The Sacco runs a web application that issues text alerts and emails to the 610 matatu owners registered with the organisation, informing them of the whereabouts of their vehicles every time they are in operation.
2NK Sacco Society main office in Nyeri town.
Photo credit: Joseph Kanyi | Nation Media Group
The digital system also allows stage operators in various bus terminals within the country to generate passenger tickets electronically using point of sale machines, therefore eliminating the use of manual receipts.
The bus tickets contain the name of the passenger, phone number, route taken, amount paid and the name of the driver. Once a stage operator produces a ticket, the information is received immediately by the Sacco's servers which then generate an electronic manifest to be used by the drivers.
Whenever a vehicle is preparing to leave the loading bay, a matatu owner gets text alerts and emails informing him, or her, of the time of departure, expected time of arrival, the total amount of fare paid and the name of the driver.
The 2NK Sacco CEO, Anne Nyawira, says that since the company adopted the system, they have become fully accountable for the income made by its vehicles.
“The system has also eliminated the numerous financial disputes between matatu owners and their drivers as we no longer allow drivers to handle fare,” she says.
Previously, drivers would collect and remit fares daily to their employers, the matatu owners, but through the new system, all money collected by stage operators who work under supervisors.
“The digital system has regulations which require all stage operators in various matatu loading bays within the country to bank the money collected once it reaches a certain amount,” she explains.
Failure to remit the money to the bank, Nyawira says that the digital system sends supervisors, who oversee operations at the town level, phone notifications for follow-up. The adoption of the digital system was brought about by the need to regulate the income generated by the sector.
The government has in the past raised concerns about the revenue that the public transport sector loses every year to a network of cartels which include organised criminal gangs, rouge traffic police officers, county askaris and touts.
The stage automation system comes a few months after the Sacco digitised its parcel delivery services, which ensure that its customers receive text notifications on where to pick up their parcels.
The Sacco’s CEO, Anne Nyawira. The organisation’s contribution to the transport sector has been recognised.
Photo credit: Joseph Kanyi | Nation Media Group
Currently, the 2NK Sacco is also the only transport Sacco in the country operating front office service activities (Fosa) which has given its members an easy way of banking.
The Fosa is part of the Sacco's insurance agency which serves its members and the public. The insurance agency consists of two types of accounts: class A and class B membership.
Class A membership is made up of matatu owners while class B consists of members of the public and drivers of the Sacco. To join the Sacco under class B membership, all you require is Sh500 for registration, KRA pin and your ID.
Ms Nyawira says that besides being able to track their income on a daily basis, it is an advantage not being able to acess the money until the end of the month.
“It is from these savings that the Sacco deducts its members’ shares, these savings also act as loan securities,” she says.
So far, the organisation has advanced loans of 626 million, with savings of 690 million.
The Sacco has also put up a consolidated fund from the daily savings, which have risen from an asset base of Sh100 million to Sh871 million.
Other investments by the facility include buses, petrol stations and a petroleum tanker. Worth noting is that partnerships with petrol stations have reduced the handling of hard cash among its operators.
Annually, the Sacco records a turnover of 200 million from all its businesses. So as to ensure proficiency in the matatu industry that has for ages been associated with unruly behaviour, the 2NK boss says that all drivers hired by the matatu owners undergo vetting and training on how to deal with customers.
“To ensure discipline in the business, the Sacco has a committee which meets monthly to handle complaints and disputes among its members,” she explains.
This is one of the first matatu Saccos in Kenya, formed in 1993 by an association of 100 matatu owners plying the Nyeri-Nairobi route. Currently, its vehicles operate in 11 counties - Nyeri, Laikipia, Kerugoya, Embu, Thika, Nairobi, Naivasha, Nakuru, Eldoret, Kitale and Kisii.
Due to its Fosa activities, the transport sacco is regulated by the Societies Regulatory Authority (Sasra) and the Ministry of Co-operatives.
Last month, it was feted for its services and emerged best in the Long Distance Shuttle of the year category in the Africa Mashariki Transport awards.
In the same month, the county government of Nyeri also awarded it for being the ‘best’ county co-operative in the transport category. It was recognised for its interest rates on deposits of 8.7 percent
A long-running challenge the business faces, says Ms Nyawira, is the fact that they still operate under expensive insurance policies.
“This becomes even tougher when accidents occur since the passengers’ claims sometimes exceed the limit that the insurance companies pay to the matatu owners,” she points out.
Investors in the business also decry the heavy taxation imposed on them, since they are required to pay county levies and advance taxes to the Kenya Regulatory Authority yearly as well.
