‘Upatu’ - the best deal for opportunists

Ally sells garden flowers and tree seedlings on Mkwajuni Street in Dar es Salaam. He pockets the modest amount of money he makes from his business and is skeptical about ever risking his hard earned income in a money chain venture such as upatu again. 

“I have been a member before and I never want to join another one ever again. Why would I even risk or play with my own money?” he asks.

 “I will keep the little money I make to myself, no matter how hard it is, I will survive,” he adds.

For years now people from different social classes in the country have been engaged in the give-receive game known as upatu or merry-go-round as popularly known in Kenya.  In the process, a certain amount of money is contributed by everyone in the group each month and is given to one person. Each person gets the turn to receive money and a new cycle begins again. It is only at the end of such a cycle that old members can leave the group or new ones can join in.

Many people swear that this microfinance scheme has empowered them financially and given them the means to achieve their goals both long-term and short term.

Wider spread

During the early stages a majority of people taking part in Upatu schemes were predominantly women. Housewives and women who owned small businesses were the first to take part in new circles. Recently however, more and more people such as students, and professional women and business owners are getting involved in this social-finance. Men too have realised the potential of money circles and some are making serious investments and receiving lucrative returns.

“I am happy with my decision and I will never regret attempting Upatu, ever in my life”, says Emmanuel.

“I’ve been a member since 2005 and the house I am staying in now; the money used to build it comes from playing,” he shares.  Emmanuel 41, is an entrepreneur who sells African handcrafts and other handmade products in Kinondoni. He is a member in a group of ten people, who all contribute an amount of Sh15, 000 everyday. Therefore everyday a member of the group receives Sh 150, 000.

“I have two children, both of whom are studying at Vikindu International School. I must build a good foundation for their future and I find Upatu has really helped me in doing this,” explains Emmanuel.

Not everyone agrees with Emmanuel. Some people are skeptical about money circles and whether they are really as clear and advantageous for everyone as many people believe.

Mbuyuni Abasi and Ally stand by their decision to never join any upatu again and see such schemes as a bad investment.  Their previous experiences after having played in various money circles had made them wary of joining any others.

“Trust me sister, we both have tried. You see we are selling these flowers; so we thought why wouldn’t we form an official group and set a concrete goal to achieve? So from there we decided to take the idea to the next level. We formed a group of 72 people. All of us were selling small trees and fresh flowers,” Mbuyuni tells me.

They agreed that their group would meet once a week to contribute Sh5,000 each and discuss the future growth of the group. The money was collected by an appointed person who was voted in by the group. The trustee then kept the money until they handed it over to the person who would receive it.

Deceit

After three months of commitment, unfortunately, the trustee disappeared with the money and has never returned to date.

“This is the story, you can imagine how much money we lost, this was over 90 days! It’s a lot. The worst part of it is we had no paperwork or official statements,” says Mbuyuni.  

Although members of the group knew the trustee personally, there was nothing they could do about the missing money. “What do you think, we know him very well and where he lives, but there is nothing we can do! We can’t report him because we didn’t involve government from the start. As for the rest of us, we are not doing it again; each person is doing what they can for themselves,” he adds.

In spite of the tragedy, the two men have moved on and trying to expand their businesses.

Ally who is a father of one suggested that it’s better for a person to keep the money himself to avoid destroying both business and personal relationships and other problems.

“Let me tell you something,” emphasises Ally, “that money I gave away or others give in Upatu, it’s actually my own money. The type of business I do determines my stand. Sometimes I will go a whole week without selling any items. Now during that time I’ll  have collected my money from the group, but I don’t have enough to contribute for others’ turns. What do you think will happen? Conflicts. So why put yourself in trouble?” he asks. 

Positive perception

Not everyone agrees with this sentiment and many parents have praised Upatu saying it is the best option for any parent to solve family issues.

Miriam, a mother of four is a cook at Shaban Robert Secondary School. She was able to plan her cousin’s wedding with the help of her money from her money circle.

“I bought everything for her from this money. We are ten in a group, each of us gives Sh25, 000 a week; which means that one of us will receive Sh250, 000 each week,” she says.

Furthermore, as a single mother she manages to take all of her children to school while managing her house rent smoothly.

College students have also enjoyed taking part in money circles which allows them to earn extra pocket money as well as solve minor academic issues. Furthermore, it builds in them the habit of saving and investing their money early on.

“It’s about a year now since we started this,” explains Zain, a CBE student undertaking a  diploma course.

“We started with ten of us giving Sh1,000 a day, but now we’re  25 people in the group. Every one of us receives Sh75, 000 after every three days. It helps. I remember the first day I received my share, I went and bought a set of  books for my course. At the time my father was having financial problems. I’m glad I have this support,” she says.

Opinions are split about the validity of money circles. While some swear to continue  solving basic money problems this game, others have experienced problems in trusting other people with their money. The major issue that surrounds money circles however, is their informal nature which can lead to many problems.

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