DISTRIBUTION AND CIRCULATION Saccos Must Adopt Initiatives to Attract and Retain High End Savers

Kenya’s Saccos match during Ushirika day celebrations.

Saccos Must Adopt Initiatives to Attract and Retain High End Savers

By Malachi Motano.

Savings and Credit Cooperative Societies (SACCOS) and other financial institutions, should adopt measures, to counter the increasing competition, which presents flamboyant options, ultimately risking losing big savers. join. Saccos can also come up with programmes, like loyalty dividends, with members who have saved in the Sacco for long, as well as those who regularly make use of the Sacco’s services as the beneficiaries.

There are Saccos, that have been paying dividends, that range from seven to ten per cent over the years, but have currently developed special payout, known as loyalty dividends, that enables members who qualify, to earn an additional three per cent.

The Saccos, whether small, medium or large must now consider using different ways of motivation, to retain their current members, as well as improve their existing products and services, to generate more revenue.

Some of the programmes Saccos have been embracing include, awarding the highest savers, utilizing reward schemes. Sacco leaders should look at the big savers in terms of shares and deposits, as well as those who take loans and pay back in time, as the people who patronize their Sacco products, hence deserving recognition.

The recognition doesn’t have to be cash, but can also be in form of certificates and trophies or a retreat, like the one done recently by the Kenya Police Sacco. Appreciating member’s efforts, might hold them longer at the Sacco and also motivate others to The programme will reward those who save, take and service more loans as they qualify for the dividend, since Saccos rely mostly on deposits. The loyalty dividend is crucial, since it assists in making more members remain hooked to the Sacco’s products, instead of just saving, while waiting for the normal dividend, at the end of the year. Members’ uptake of products and services, is the main source of money for the Sacco, hence members should be encouraged to patronize them, therefore deserving rewards.

The concern to introduce recognition schemes, comes at a time when Saccos are recording low growth in deposits, the slowest in seven years, with an increasing appetite for loans due to the economic hardships that members have been facing, amid the Covid-19 pandemic.

According to current statistics by the Sacco Society Regulatory Authority (SASRA), last year deposits grew by 11.27% to Kshs 380.44 billion, from Kshs 341.91 billion, while the growth rate in 2018, was at 11.99%, which marked the fifth straight year, of slowing pace in mobilization of deposits which is a key resource for lending.

Still on recognition, all Saccos should encourage a saving culture and utilize it as a promotional tool. Winning and retaining members now needs such programs, because of increased competition for deposits in the Sacco sector gaining momentum. Due to the slowed deposit mobilization in the Sacco movement, the gap between gross loans and deposits, is currently hitting the highs of Kshs 39.11 billion, when compared to the previous Kshs 32.37 billion.

The regulator is now warning that unless Saccos mobilize enough deposits, they risk external borrowing. The situation is undesirable, since Saccos have to fund the deficit from external sources, which in most cases turns out to be expensive. Although Saccos have not been so competitive in the past, the emergence of many microcredit organisations, exposes them to new competitors. Previously, Saccos paid little attention to membership drive.

Appreciation of good savers might improve membership. Other measures to help Saccos attract and retain membership, is by having their members sharing their success stories so that others can emulate, like the way Safaricom Sacco in 2019 revealed that their highest saver, had hit Kshs 20 million and encouraged others to take the cue.

Incorporating loyalty schemes, discourages members from taking loans with other financial institutions. If a society has high liquidity, and members are not borrowing, the excess funds can only yield meagre returns, therefore Saccos must reverse the trend, because as members increase their deposits, without a commensurate increase in loans, they dilute rebates in equal measure.

Its encouraging that few Saccos like Qwetu, Boresha, Imarika, Unaitas and Kenya Highlands among others are developing such programmes.

The Rise from Humble Beginnings to Formidable Business Ventures, Courtesy of Cosmopolitan DT Sacco

By Eric Bosire

For two decades Mr. Shem Kebira Mogaka and Mr. Danson Kamande, who hail from Nakuru Town and Naivasha Sub County respectively, have been able to establish vibrant businesses, courtesy of the renowned Cosmopolitan DT Sacco, formerly Cosmopolitan Sacco.

Both Mr. Shem Kebira and Mr. Danson Kamande, coincidentally joined Cosmopolitan Sacco in 2001. Since then, they have enjoyed every step of their development journey, in their business growth. This has been their greatest motivation, to remain as active and loyal members to the Sacco. Mr. Shem Kebira has grown his business from a small hardware store, to selling building and construction materials in a larger capacity, thanks to Cosmopolitan Sacco. Semo Hardware, currently supplies construction materials to the entire Nakuru County and its neighbouring environs, of Kisii and Baringo counties. He lauds the Sacco’s affordable loaning products, pertinently the Jijenge loan, that helped him lay the foundation for his business and has sustained it to date. The hardware has grown to provide employment to ten staff members, from an initial two. He says the Sacco has helped transform the lives many residents, by offering loans and other financial services at affordable rates and on timely basis. “I joined the Sacco in 2001 and since then I cannot regret. I have been able to transform my business from a mere simple hardware, to a formidable and reputable venture, courtesy of Cosmopolitan Sacco asset financing products”, Mr. Kebira disclosed. The Sacco has been in every step of his development track record, both personally and in his career as a teacher. Currently, he is the head teacher at St Marys’ Girls Primary School, in Nakuru County. Mr. Kebira is just one of the many members, whom the Sacco has been able to finance and promote thrift, amongst its members, through accumulation of savings, thereby creating a source of funds from which members can borrow, at affordable and reasonable costs.

“I had few business problems back then. But when I talked to Cosmopolitan Sacco through their asset finance manager, I was able to get a loan of Kshs 400,000, through my savings and dividends, which enabled me to set up Semo Hardware, then at KU plaza, before moving it near Egerton University.

Due to expansion and good returns in the business, I had to move to

Nehemiah House in Nakuru town,

where am currently based.”, he adds. Mr. Kebira further emphasizes that the only way to benefit, is through growing savings and deposits in order to guarantee Sacco loans, which has consequently helped him make wise investments, thereby promoting his economic and social welfare.

He advises that the secret to growing ones’ loan portfolio is just to generate savings through the Sacco, to qualify getting loans, which will help facilitate making investments, just like he did.

Investment and returns Mr. Kebira adds that as an investor, he grew his deposits gradually and got the capability to acquire vehicles for transportation. With time he acquired another loan of Kshs

Mr. Shem Kebira Mogaka, CEO, Semo Hardware Business Enterprise, shows part of his warehouse in Nakuru County.

320,000 and made deposits worth Kshs 1.5 million, before qualifying for another Kshs 5 million loan, that enabled him to acquire 3 Pickups, add more stock, an affordable office space for storage and a lorry, for easier transportation of materials to his clients.

“Since I deal with supply of building and construction materials, through the help Cosmopolitan DT Sacco I have been able to purchase 3 pickups and a lorry that are helpful, in supplying materials to my clientele, within our regions coverage”. Mr. Kebira noted. He further adds that the flexibility of the Sacco’s products, has enabled him to make tremendous strides economically, owing to the flexible loans granted to him since he joined.

“My counterparts are yearning to join Cosmopolitan DT Sacco, as I have informed them about the Sacco’s products; since they have seen me grow Semo Hardware, from a just a small joint, to a formidable hardware, with ten staff members just from two, my wife and I”, he says jovially. Out of Bond Many people have notions that it is difficult for new members to get loans without formal employment. However, Cosmopolitan DT Sacco has stood the test of turbulent financial times, that has seen a number of societies collapse; growing to become one of the biggest indigenous financial institutions in the County and its environs. The Sacco continues to provide opportunities for business people, to grow their savings, and acquire loans to advance their businesses.

It’s this background, that Mr. Danson Kamande, with the help of Cosmopolitan Sacco, has relied on to fulfil his business desires, which has enabled him to advance from a shopkeeper, to owning one of the biggest Fashion establishments, ‘Jaynees Boutique,’ that specializes in ladies, men and children fashion clothes, together with other accessories. Mr. Kamande says that its only financial discipline and proper management, that has helped him establish the business.

“I have always been disciplined in saving, borrowing and investing wisely, in an idea which I intend to pursue’. I first got a loan of Kshs 0.6 million, then advanced, now I am currently servicing a Kshs 1.5 million loan,” notes Kamande jovially, while serving one of his clients at the boutique. At the start, Kamande says, when he approached Cosmopolitan Sacco, he already had an idea of what he needed to invest in; shifting from a retail shop, to venture into a boutique, which entailed fetching clothes from Eastleigh, Nairobi in bulk.

“I saw the need, and hence invested in it. Though it’s challenging, I have managed through avoiding unnecessary expenditure and paying promptly, to increase my loan limits.

I am also optimistic that by the end of this Covid 19 pandemic, I will be able to further expand my business through direct importations from outside Kenya”, says Kamande. He adds that h e

Mr.Danson Kamande at his Boutique in Naivasha Sub County, Courtesy of Cosmopolitan Sacco loan products.

also targets at the end of this year, to bring at least 100 new members on-board, so as to benefit, like he did. Since Sacco’s’ work on guarantorship model, Mr. Kamande says through joining the Sacco, members can be able to guarantee each other and even borrow through self guarantorship.

Both Mr. Kamande and Mr. Kebira,

Mr.Danson Kamande busy at work in his Boutique in Naivasha Sub County, after he changed his retail business to the current business courtesy of Cosmopolitan Sacco loan products .

share the same sentiments, that time management and selfdetermination, has helped them establish their businesses through borrowing and paying promptly from Cosmopolitan Sacco. Similarly, Mr. Kebira and Mr. Kamande are examples of the transformation power of Cosmopolitan DT Sacco, that has played an integral role in improving and providing opportunities to save, borrow and invest in business.

Cosmopolitan Sacco’s headquarters is at the multi-million Cosmopolitan plaza in Nakuru County. The plaza, which is part of the society’s asset base, stands at Kshs7.4 billion, serving as a testimony to the Sacco’s rock solid foundation and determination, to scale to greater heights of success.

The Sacco also has an office in Naivasha, with several satellite offices across the county to serve its members.