How do you save money in a struggling economy? Well, many Kenyans in their 20s and 30s residing in the bustling capital of Nairobi have found a way out.

They send a chunk of their monthly paychecks to their SACCO accounts, using the popular M-Pesa mobile money app on their phones. SACCO is an abbreviation of the Savings and Credit Cooperative Organization, which manages money pool of savings by members and uses the funds to offer affordable loans.

Depositing at SACCO accounts is almost a habitual way for Kenyans to save money to grow their businesses or finance projects. This is because SACCOs offer a more friendly interest rate on loans compared to commercial banks or microfinance institutions.

The loans are also more accessible, and they offer members loan amounts of up to 4 times their deposits as they continue sending their monthly savings contributions.

Now, young Nairobi dwellers convert another portion of their SACCO savings every month to the US dollar-pegged stablecoin: USDT. It isn’t US dollars, but a degital asset pegged to the US dollars. By doing this, they guard against the plunging Kenyan shilling.

Works as Digital Marketer and Earns $1,200 Monthly

*(A bar & restaurant in Nairobi /Photo by Unsplash)*

Samuel Okoth, 28, is among frequent stablecoin shoppers in Kenya. He is a father of three and works as a digital marketer and Web3 educator. He earns a net amount of $1,200 a month, 35% of which goes to rent, food and daily expenditure. Another 40% goes to school fees, medical insurance for his family, and supporting his wife’s grocery business. He’s left with $300.

At first Okoth used to set aside $200 to buy the USDT stablecoin but with the rising cost of living in Nairobi, he has been allocating between $50 and $180. The rest of the money is reserved for emergent spending. “On average, I buy $80 worth of USDT every month while saving $100 in the SACCO,” he told NODO News, without disclosing the name of the SACCO.

Okoth was 24 years old when he joined a SACCO and 25 when he installed a Binance app on his phone for stablecoin transactions. This became his monthly routine for his belief that buying and holding USDT allow to hedge against loss of his Kenyan Shilling-based fund saved at his SACCO account.

Shillings in Bank Account Vs. USDT in Wallet

“USDT is my favorite stablecoin because it is pegged to the fiat US dollar at a ratio of 1:1. It does not depreciate like other stablecoins, the change is very negligible whenever this happens,” he says. “When I started buying stablecoins, the Kenya shilling was retailing at 107 against the US dollar but has now lost its value to 139.”

Okoth advises Kenyans who are wary of purchasing cryptocurrencies to go the stablecoin way. “You can sell your USDT on peer-to-peer platforms at a higher rate than the central bank dollar exchange rate. It no longer makes sense keeping Kenya shillings in the bank. Convert them to USDT because it is also expensive to purchase actual US dollars. With the current state of the economy, nothing is going to stop the shilling from plummeting to 200,” he advises.

Since learning the trick, he has been introducing it to novice Web3 users. Every last Saturday of the month, Okoth and three other crypto geeks lead a group of about 40 Web3 enthusiasts to educate them about the trends in the industry.

“We have done over 12 editions now, and the impact has been real because Web3 information is scanty and new users need a community where they can learn, interact and get support,” he said.

-Edited by Shigeru Sato