Addressing the challenges of resource mobilisation through group savings and investment: Part 4 I wish to highlight some of the pitfalls of group savings and investments. Before we set the ball rolling a number of friends have shown a keen interest in being a part of group savings and investments team. Be encourages to go this way, a success story from Kenya indicates that young people have grown savings and assets from owning one small flat to a block of 100 flats in 5 years. We can do it too! Can the blind lead the blind? - Pitfalls and remedies • Monopoly of ideas by team members. No single individual is a custodian of all the knowledge. No one must feel or behave this way while in a group. To address the highlighted risk, a chairperson must be appointed to provide leadership during team meetings or in the conduct of team business. Additionally team members must realise that because each individual is unique, ideas and opinions differ but this is not a hindrance or recipe for anarchy. Each opinion must be tested using SMART. Specific – target a specific area for improvement. Measurable – the idea can be quantified and has an indicator of progress. Assignable – Can be assigned to a team member Realistic – Results can be achieved, given available resources. Time-related – Has a specific deadline and time plan • Lack of teamwork and unity of purpose in the conduct of team business. Team work comes in the form of agreeing on deliverables and executing them using the resources and time allocated. Being united and supporting each other in the whole process ensures that team members get maximum value. Unity comes from respecting and accepting others regardless of class, race, kindred, ideas or other physical circumstances. Goals and objectives must be set collectively to ensure unity of purpose. • Lack of team member commit to monthly contribution or assigned tasks Because the team is not a social club, members must be committed to make monthly contributions and perform tasks assigned so that on-going project or team activities are supported. In a event that a member is not able to meet such obligations, this must be communicated on time so that compensating action is taken. • Fraud committed by team members entrusted with the management of group funds. Fraud happens when opportunity presents itself and the individual has a justification to do fraud. To prevent fraud, a bank account with at least four signatories which must include the chairperson, trustee ( team member with no management position), team attorney and treasure must be opened. No single coin must go out of the pool funds without the four signatures and all payments out of the funds must be done using a cheque. The team accountant must prepare a statement of financial position every month that must be reviewed by the team auditor and approved at the periodic team meetings. • Excessive unsecured loans from the fund by team members. Because team members can get low interest loans from the funds, there must be a form security. The easiest proposal to ensure security is to ensure that member’s loans must not exceed 70% of their contribution to the pool funds. The power of numbers Hypothesis: The team has 20 members contributing ZMK 500 per month consistently. Given the above hypothesis, it means that the team will be making ZMK 10,000 per month into the shared pool funds and about ZMK 120,000 per year. To highlight a bit of the value of this shared pool; In 6 months the team can secure a residential plot in Lusaka for ZMK 60,000 build a house in the next 18 months using ZMK 180,000 and resale the finished houses for not less than ZMK 400,000. Making a dividend of ZMK 160,000 in 24 months. Repeat this over again means more dividends from the savings! Many other investment ideas can be exploited. Additionally a team has multiple talented and energetic youths each one bringing an area of expertise to the team. Is this not reason enough to work together! Post all questions on this link. If you are interested in team savings and investments drop me a note in my Facebook inbox with the following details. Name, Current contact number, current address and occupation.
Posted on: Thu, 04 Dec 2014 06:50:44 +0000
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