Differences and similarities between the 2017 KCSE Computer project and Fedha Youth Group System
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Introduction - this blog post takes a comprehensive look at the differences between the two systems/projects.
Registration
of members
In
the Mwanzo Baraka system, registration is open to people of all ages (18+)
while in the Fedha Youth Group System registration is open to people aged
between 18 and 35 only(youth). There are two types of membership in the Mwanzo
Baraka system – group membership and individual membership. A person can
therefore register as an individual or as part of a group. Fedha Youth Group
system has only one type of membership – individual.
Monthly
Contributions
In
the Mwanzo Baraka Information Management system project, all members are
required to contribute at least Ksh.1000 monthly. For members registered under
groups, Ksh.200 out of a member’s monthly contribution is deducted and
channeled towards his/her respective group’s monthly contribution. In the
Fedha Youth Group System, all members are required to contribute at least
Ksh.500 monthly.
In
both systems, a member’s total of monthly contributions is computed as his/her
shares in the organisation.
Processing
of loans
Unlike
in Fedha Youth Group System, there are no loan types in Mwanzo Baraka system.
Instead, members enjoy different loan limits, maximum repayment periods and
interest rates on loans depending on whether they are part of groups or not –
members registered under groups enjoy better loan terms. Additionally, groups
can collectively be issued with loans in the Mwanza Baraka system.
In
Fedha Youth Group System, there are 4 loan types with different maximum loan
limits, monthly interest rates and repayment periods. Members applying for
loans in the Fedha Youth Group System must fulfill two conditions – they must
have contributed to the organisation for at least 6 consecutive months and the
loans they apply for must be guaranteed by other members of the organisation.
Fixed
deposits
In
the Fedha Youth Group System, all savings that are not issued as loans are kept
in the bank as fixed deposit where they earn interest. This is not the case in
Mwanzo Baraka Information Management System – savings that are not issued as
loans are presumed to lie idle.
Repayment
of loans
Both
systems obviously require loans to be repaid so that revenue/income can be
calculated. In the Mwanzo Baraka system, loan installments are repaid monthly –
installments must be paid by the end of the month during which they fall due. If
an installment falls due on 15th of April for instance, it has to be
paid by 30th April. Failure to pay an installment on time attracts a
10 percent penalty per passing month in Mwanzo Baraka. In Fedha Youth Group
System, loan installments are similarly repaid monthly. However, there are no
set deadlines for repayment and penalties for failure to pay an installment on
time.
Revenue
and Dividends
In
the Mwanzo Baraka system, income is earned from interest on repaid loan
installments and penalties for late payment of installments. In Fedha Youth Group
System, income is generated from interest earned from repaid loan installments and
interest earned from fixed deposits.
In
both systems, income is calculated annually. Dividends from the organisations’ income
are paid out at the end of the year. In Mwanzo Baraka Information Management
System 60 percent (60%) of the
revenue is channeled towards dividends while 40 percent (40%) is returned to the organisation. In Fedha Youth Group System,
90 percent (90%) of the revenue
generated annually is channeled towards dividends while 10 percent (10%) is retained for office expenses.
Exit
notices/requests
In
Fedha Youth Group system, a member who wishes to exit the organisation can give
a notice of his/her intention to do so.
To give such a notice however, such a member needs to have paid back all
outstanding personal loans. Additionally, loans guaranteed by the member must
also have been paid back. Upon fulfillment of the above conditions, the member
can issue the exit notice which expires in one month signifying successful exit
from the organisation. Once the notice expires, the member is reimbursed
his/her full amount of shares and becomes a former member.
In
Mwanzo Baraka Information Management system, there is no similar exit feature
for members.
Conclusion
These two systems are quite similar. Both
are loan management systems for small self-help organisations that require
members to contribute monthly and use the contributions to issue loans. The two
however have stark differences as explained above. Fedha Youth Group system
comes out as the more complex one due to the fixed deposits and member exit
requests features.