How to start a matatu Sacco

Matatus, the iconic public transport vehicles in Kenya, have a reputation for being both loved and criticized. Despite the challenges, the matatu business can be lucrative for those willing to venture into it. Here’s a comprehensive guide on how to start a matatu Sacco.
- Capital Investment
The matatu business is capital-intensive, requiring a minimum investment of around Sh3 million. This includes the cost of the vehicle, licenses, Sacco registration, and other associated expenses.
- Vehicle Categories
Matatus are categorized into six classes based on passenger capacity. Choose the class that aligns with your budget and business goals. Ensure compliance with National Transport and Safety Authority (NTSA) specifications for modifications.
- Vehicle Compliance
The vehicle must meet NTSA requirements, including a valid inspection certificate, insurance cover, road service license, speed governors, seating specifications, safety belts, and any necessary modifications. Obtain a permit from the Music Copyright Society of Kenya if you have a music system.
- NTSA Compliance
Matatu operators need to comply with NTSA regulations, ensuring the vehicle and crew meet all specified requirements. The crew must possess a Public Service Vehicle (PSV) license.
- County Government Permit
Acquire a permit from the county government to operate a matatu business on your selected route. Allocate approximately Sh300,000 for fulfilling legal requirements.
- Sacco Registration
Matatus must be part of a Sacco, serving as a mandatory requirement. Choose a Sacco based on your route and capacity preferences. Sacco registration costs range from Sh20,000 to Sh50,000.
- Launch Your Business
Once all legal requirements are met, initiate your matatu business. Ensure your crew is reliable, as they play a crucial role in the success of the venture.
- Business Sustainability
Aim for a self-sustaining business model with an honest and efficient crew. Be prepared for potential challenges, such as police crackdowns, accidents, and maintenance costs, which may impact returns.
Starting a matatu Sacco demands meticulous planning, adherence to regulations, and financial commitment. By navigating through the legalities and operational aspects, aspiring matatu owners can pave the way for a successful venture in the dynamic transportation industry.