FEATURED: Wheels of fortune: Mechanics construct multi-billion complex

Icyerekezo Gatsata cooperative, made up of car repairers, garage owners and spare parts traders, is now generating millions in revenues from renting their commercial building. / Courtesy

They used to work from Nyabugogo Marshland in Gasabo District under poor structures. During the rainy season, clients’ cars could get stuck in floods.

In addition, their operations used to violate environmental protection laws putting them on collision course with the Rwanda Environment Management Authority (REMA).

These are vehicle mechanics and dealers in automobile spare parts.

Tired of lacklustre operations they joined hands through their Icyerekezo Gatsata cooperative to establish modern commercial buildings that would house their garages, spare parts shops, and other business related service.

Forming cooperative turned around their fortunes, which had stagnated when they used to work individually.

This photo shows the cooperative was grappling with workplace challenges in the Nyabugogo Marshland. / Courtesy

Currently, the cooperative has 99 members, each with shares valued at Rwf30.8 million.

To reach that share, each member has been making a monthly contribution to the cooperative since 2007.

With their contributions amounting to over Rwf3.49 billion since 2007, the cooperative members were able to set up two commercial buildings at a cost of Rwf6.65 billion in Gatsata, according to Robert Mugabe, the cooperative’s Manager.

Their investments, he disclosed, were partly facilitated by a Rwf3.4 billion bank loan.

The first phase of their project consisted of a three-storey commercial building with 132 rooms. It was completed in 2015.

The second phase whose construction started 2016, was completed in 2018. It is a four-storey building with 88 rooms, of which two levels house garages.

In February this year, he added, each member got two rooms in a building to work from. They have the option to rent out the rooms and generate extra income, in case they decide too.

“When it rained, clients’ cars would sink in the marshland. But, now, we have an appropriate workplace, and we get rent. The cooperative gets between Rwf400 million and Rwf450 million in revenues from rent,” he told The New Times.

Car repairers, garage owners and spare parts dealers were working from a place with poor conditions. / Courtesy

He added that this year members will receive dividends.

He explained that the reimbursements can be shared, reinvested in part of as whole depending on what the general assembly’s agrees. 

Icyerekezo Gatsata cooperative is a registered and accredited cooperative by Rwanda Cooperative Agency (RCA).

Mugabe said the cooperative has benefited from RCA supports through advice, inspection, audit as well as trainings.

Cause and motivation

The mechanics and spare parts dealers were forced to relocate from the marshland because their operations threatened the environment.

Thus, they resolved to set up modern garages and commercial buildings in Kigali where they had many clients.

To achieve this objective, cooperative members started making contributions, whereby during their meeting of 2007, some 88 members agreed that each member should contribute Rwf3 million.

By 2008, they had contributed over Rwf179 million.

The development journey

In April 2010, the cooperative was accredited by RCA, under the name of Icyerekezo Gatsata.

In December 2011, the cooperative moved its activities from the marshland.

The cooperative gradually advocated for the increase of the contribution by each member from Rwf3 million to Rwf12.5 million in 2011.

This move enabled it to start the construction of the first phase of its commercial buildings.

The cooperative was also getting Rwf9 million from renting its plot to some garages.

On May 4, 2012, it started construction works for its commercial facilities, an activity which was completed in 2015.

Later, the cooperative had to look for tenants to work. Gradually, the building occupancy rate increased to 89 per cent currently. They are optimistic about 100 percent occupancy rate in the near future.

“This (increasing occupancy rate and optimism) is thanks to the fact that the cooperative buildings are located in an area where spare parts and garage businesses were already existing. In addition, they are in the middle of the city, which eases movement for the people who need these services, compared to other places,” the cooperative said.

In October 2015, the general assembly decided that each member makes an additional of Rwf13 million contribution to the already existing Rwf12.6 million. This brought the share of every member to over Rwf25.6 million.

In July 2016, the cooperative generally assembly agreed to expand the project to the second phase.

editor@newtimesrwanda.com