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Future of Co-operatives is Uncertain due to Succession Structures
GROWTH Future of Co-operatives is Uncertain due to Succession Structures That Leave the Youth Behind
By Malachi Motano
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Savings and Credit Cooperative Societies (SACCOS), must demystify the old belief and perception that Saccos are projects of the elderly, hence can’t entrust young people with key positions.
Its unfortunate that while young people form, almost a third of the membership, of Saccos, they remain vulnerable when it comes to occupying major offices.
According to the Sacco Society Regulatory Authority (SASRA), about 30.86% of the Sacco Membership, are aged between 18 and 35 years.
This demonstrates that Saccos are not only for the
Nandi County Youth Bunge SACCO
old. Unfortunately, their representation at the board of directors, supervisory committees and other prominent positions, is very low.
Those offices are occupied mostly by the over 40 year olds, who still believe that Sacco membership, is composed of older people, with no place for the youth.
The Sacco board is charged with the responsibility of making important decisions, which include coming up with new products and services, levels of dividends and the general running of Saccos; which implies that they highly determine the performance of Co-operatives.
Most young people don’t have much in terms of investments, which make them not to actively get involved in the management. Its rare to find the youth in Saccos with agricultural bonds like sugarcane, coffee and tea owning plantations, therefore cannot rise to the management.
The situation is replicated, in the Saccos that peg management on shares or level of savings, which in most cases knock-out young people.
Unless Saccos revise the clauses, that technically knockout young people, from holding key offices, lack of sufficient representation, puts the Sacco movement at a risk of succession, when old leaders finally leave the offices, without properly grooming new young people.
The Mimi Na Wewe Youth Sacco is an initiative of Alternatives Africa promoting and facilitating development of youth-friendly saving cultures.
According to the Regulator, most CEOs are aged between 36 to 50 years, accounting for 58.48%, with only 10.53%, out of the 172 CEOs in DT Saccos below 35 years.2.34% of them are above 61 years old, with one breaking the record for being in office at 70 years.
Most young people don’t vie for positions during Sacco elections; not taking advantage of their numbers to vote their colleagues below 35 into the top offices.
Consequently, management offices are occupied by individuals between 51 to 60 years, accounting for 48.52 %,45.56% and 47.93% respectively.
According to SASRA, officials above 71 years old hold 8.28% of the Chairmen positions,9.47% Vice-Chairmen positions,4.14% secretaries and 5.92% Treasurers’.
The records clearly indicate that there are no young people, in the big offices at the Sacco boards, depicting the lack of representation within the DTSacco system.
The issue of common bond is also posing challenges in setting up the Sacco leadership and management in terms of who can occupy leadership positions.
Despite the fact that government-based, teachersbased and farmers-based Saccos, with natural common bonds have opened up membership to any willing save, in one way or the other have guarded the offices of the leaders.
Saccos have opened up membership to ’foreigners’ but the same individuals, cannot vie for elective positions at the board. Meanwhile the management is purely rested on the common bond.
The challenge of involving youth and women in top leadership, is also a national problem, which poses another glaring disparity, in the Sacco movement, despite women being seen as anchors of the Sacco movement.
Digitizing Saccos is Currently Inevitable but Must Begin with Management
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decision-making, loss of income from unsettled loans, loss of value on stored inputs and outputs due to lack of knowledge, lack time to focus on important issues, such as marketing, loan repayment and difficulties when applying for loans due to lack of reliable business data.
Some Saccos continue to use paper-based data management systems, for a number of reasons like lack of awareness of existing digital solutions, incapacity to use technology, digital illiteracy, weak enabling environments, lack of capital, social and cultural opposition to new technologies.
However, going digital presents five major operational benefits for Co-operatives which include, reduced work-day, improved accuracy, increased revenue collection, reduced cost of delivering services and improved documentation and reporting. Such digital systems free up Cooperatives to focus their efforts on important matters, such as marketing, and to improve productivity for members.
They also offer users better prospects of securing bank loans and contracts from big aggregators, since cooperatives using digital systems can easily show that they are reliable and profitable. Any Sacco seeking to implement a digital financial system, must first research and identify packages, that provide the services required by the business and its members, considering what features the Sacco needs and any additional services it would like the system to deliver.
To reap the benefits from such digital financial packages, Saccos should identify a staff member who can take the digital lead, bringing the whole business into the digital era, and developing a digital culture for the organisation as a whole.
KUSCCO MD Mr George Ototo makes a virtual contribution at the 2020 East Africa SaccoTech forum.
BRIEFING ROOM Sacco News Round up
By June Njoroge.
Kenya Police Sacco Scoops the GCR Award!
Kenya Police Sacco scoops the ‘Best National Long and Short Term Financial Lender’ Award, by the Global Credit Rating Company (GCR), for the second year in a row. This is due to strong capital position, adequate funding and liquidity, a solid risk management position and strong solid management under the leadership of the National Chairman Mr. David Mategwa.
Harambee Sacco Launches Mortgage product
Tai Sacco Holds ADM & Launch 2020-2024 Strategic Plan
Tai Sacco celebrates the launch of its 20202024 Strategic Plan, Elimu and Makao loans, at the Sacco’s 28th ADM held at the St Francis Catholic Church Hall in Ruiru.
Ukulima Sacco Launch Mortgage Products in Partnership with KMRC Ukulima Sacco rolls out new mortgage products, in partnership with the Kenya Mortgage Refinance Company (KMRC); as one of the Co-operative Shareholders, in the state backed initiative towards the achievement of affordable housing, in line with the Big 4 agenda. Shareholders are to be advanced at 5%, to enable them advance to their customers at between 7% and 9 %.
Harambee Sacco has become the first Sacco to roll out the long awaited mortgage product in partnership with the state backed, Kenya Mortgage Refinance Company (KMRC) at an annual subsidized interest of 7%. KMRC has approved two mortgage products; the Harambee Jenga loan, where borrowers will be facilitated to build houses on their own parcels of land; and the Harambee Home loan, which will enable members to purchase readily built houses. KMRC will be lending to banks and financial co-operatives at an annual interest rate of 5%, enabling them to write home loans at between 7% to 9%, lower than the average market rate of 11.9%, making it 42% cheaper. The Sacco contributed Kshs 25 million for a stake at KMRC.Each beneficiary will be expected to pay a 10% deposit for a mortgage starting at Kshs 500,000 to a maximum of Kshs 4 million. The two loans are pegged at 8% rate for the 10 year mortgages and at 9% for over 10 years up to 25 years.
Mr. Ariel Guarco, President, International Co-operative Alliance.
The International Co-operative Alliance unites, represents and serves Co-operatives worldwide. Its the apex body representing cooperatives, providing a global voice and forum for knowledge, expertise and coordinated action about cooperatives. It works with global and regional governments and organisations to create the legislative environments that allow cooperatives to form and grow.
BRIEFING ROOM
Unaitas Sacco Celebrates Members Day!
Unaitas Sacco celebrated Members Day, led by the Chairman and the CEO; appreciating members for their business support.
Sacco Supervision Shifts Online
The Sacco Societies Regulatory Authority (SASRA), has shifted the supervision of Deposit –Taking Saccos online, in the wake of the coronavirus pandemic, to curb the spread. Interactions between the Regulator and Saccos, in regards to approvals and general correspondence are now being conducted online.
Taqwa Sacco Signs MOU to bolster FOSA & Asset Financing
The first Shariah compliant Sacco in Kenya, Taqwa Sacco, led by the Chairman Dr. Ahmed Yussuf together with Vice Chairman, Mr. Ahmed Hussein and Takaful Insurance CEO, Sumayya Hassan, has signed an MOU, that allows to further strengthen their relationship and most importantly benefit members, applying for FOSA and asset financing. All assets of Taqwa Sacco will now be insured at affordable and reasonable prices.
World Council Young Credit Union Professionals (WYCUP) Celebrates 20th Anniversary
WYCUP celebrates 20 years of empowering, networking and inspiring young credit union professionals around the world. It raises the voice of young leaders across the credit union sector and represents a global community of young professions who recognize the potential for financial cooperatives to positively impact the world.
Solution Sacco Launch the Verve Debit Card Scheme & New Agribusiness Products The Meru-based Solution Sacco, has launched the Verve Debit Card Scheme to increase efficiency in the banking experience of their members. The Sacco also now has new agribusiness products tailored to meet the specific needs of Tea Farmers, Dairy Farmers and other SME’s.
Here is what our readers had to say
Kudos to the Cooperative Movement for their CSR Initiatives
Amid Covid-19
I would like to commend Kenyan Saccos for their efforts to help the vulnerable and needy in the society, with their CSR programmes during this Covid-19 period. I am just glad that Co-operatives were not a part of the murky Covid-19 millionaires scandal; they came together in the spirit of Co-operation and supported the needy adversely affected by the pandemic.
Samir Abdullahi, Marsabit.
Youth to be Considered in Saccos’ Leadership Positions
Saccos are in a rush to recruit the youth but should also consider and delegate leadership positions to them. Leadership in Saccos has for long been dominated by the older demographic, who are also board members. These aged members, in many cases, may not necessarily embrace the changes happening in the Co-operative movement, which could jeopardize the success of the Sacco. Assigning leadership roles to capable youth will additionally go a long way in motivating them, to save more whilst even bringing in more youth. Youth are the future of the Co-operative movement, they should be given a chance to lead and bring in different incentives on how to grow Saccos.
MaryAnn Mokua, Kisii County
Compiled by June Njoroge.
Applause to Sacco Times Magazine!
I am an avid reader of Sacco Times Magazine; admittedly, you are doing a commendable job in informing co-operators and the public on significant matters about the industry. I like the new segments that were introduced, the magazine has really improved this year, your August -September issue was particularly very informative and thorough, in regards to developments in the sector, keep up the good work. Sacco Times is definitely the leading Co-operative publication.
Brian Kiprono, Kericho
Good Riddance to Sacco Loan Defaulters!
I was very pleased when I read the article about loan defaulters and Saccos finally gaining access to CRB reports, in your August-September issue. It is such a godsend, especially for some of us who are Sacco members and have been guarantors to some of these loan defaulters, that have often in the past, put our livelihoods in jeopardy and tainted our reputations with our Saccos. Among the ways Saccos have been utilizing to get these serial defaulters to service their loans, has been targeting guarantors and to some extent almost pushing the blame on them. At least with these, reports Saccos will be able to gauge the credit worthiness of members before disbursing loans. For the members with a good borrowing history, it’s a win for them, as they can enjoy the benefits of the good CRB reports.
Jeffrey Kiptoo, Nairobi County
Revival of the 2018 Bill is a godsend
Bad governance and mismanagement in Saccos have become so rampant and actually discourage many from joining. However, the revival of the bill spells good news in the sector, because it will help in curbing corruption and more people will be confident in joining Saccos, dispelling the fears about the security of their savings. I happen to have a relative who had savings of over five million shillings, in a Sacco that went under in 2017 and it completely destroyed him and his family. He went from depression to being severely ill, at the detriment of his family. I would not wish to experience or see someone else lose all their hard earned savings to lazy, corrupt and greedy Sacco officials. This Bill, if passed to law will help in taming rogue officials and see the election of only qualified individuals to lead.
Ruth Soi, Kajiado County
{Dear Readers, because your feedback is invaluable, engage with us by sending us feedback on matters pertinent to the Co-operative sector via satimeseastafrica@gmail.com or you can share your thoughts on our various social media platforms.}
COSMOPOLITAN DEPOSIT TAKING SACCO MEMBERSHIP CARD
ATM Services • Withdraw cash from any Vis a BOSA PRODUCTS CLASS B NAME:............................................................................................................................ branded ATM CLASS A CHAMA LOAN • Pay for goods and services SPOT CASH (M-BANKING) M-COSMO/X-MOBIDEVELOPMENT LOAN • Repayment period 36 months • Minimum deposit ksh. 1,500 per month and ksh.50 for insurance per member. A/C No. .......................................................................................................................... • Dial *645# or *882# • Withdraw cash from your account • Maximum deposit holding times five subject to 2/3 rule BIASHARA LOAN P/No. .............................................................................................................................. via • Repayment period within 60 months • Eligible for a loan after 3 months of M-PESA • Pay for loans via M-PESA • Deposit cash to your accountSUPER LOAN savings • Deposit multiplied by 3 M/No. .......................................................ID No. ........................................................ • Maximum deposit holding times five • Repayment for the first loan is within 12 • Make utility payments via M-PESA • Transfer cash to another account • Buying airtime from account subject to 2/3 rule • Repayment period within 72 months months • Minimum deposits kshs. 1,500 and ksh 200 per month for insurance. JOIN DATE. ...........................................SIGNATURE.............................................. PREMIUM LOAN • Maximum deposit to 2/3 rule • Repayment period GRANT LOAN • Maximum deposit holding times five within 84 months holding times five subject OTHER INFORMATION • Member can apply for a loan advance at a commission • Long term loans can be topped up after servicing for six months while short term loans top up is after servicing for three months. • All loans have to be secured either by: LIPA NA MPESA • Pay Bill 883050 SAFE CUSTODY • Safe keeping of documents • Annual fee of Ksh. 300 CLASS C MEMBERSHIP • Repayment period within 48 months • Self guarantee 80% of deposits • Have a withdraw able deposit account • Repayment through standing order in fosa • Guarantors based on limit of deposits • Membership drawn from individuals to • Loan appraised based on payslip net pay • Collateral- Title deed groups • Access to safe custody and fixed deposit JIJENGE LOAN FOSA PRODUCTS account facilities • Can negotiate an advance against amount in • Maximum • Loan paid deposit holding times with other sources of five income SALARY ADVANCE fixed account which passes through fosa • Salary pass through fosa RETIREMENT PACKAGE • Repayment period within 48 months • Repayment period within 12 months • Minimum kshs. 300 p.m EMERGENCY LOAN • Maximum deposit holding to 2/3 rule times five subject SALARY IN ADVANCE • Salary pass through fosa • Repayment period within 1 months • Earn interest • Can deposit bulk cash • Payable after retirement • Repayment period within 12 • No supporting documents • Instant on application months FIXED DEPOSIT • Interest rate of 8% p.a • Minimum deposit is ksh. 10,000 FOSA ACTIVITIES • Fosa savings accounts • Salary processing • Bankers cheques EDUCATION LOAN • Maximum deposit holding to 2/3 rule times five subject • Minimum period of 3 months to earn interest • Interest rate negotiable above kshs.1 million • Clearing Cheques • Children A/CS • SMS banking • Standing Order services • Repayment period within 18 months ADV (Alternative Delivery Channel) • Mpesa
P.O BOX 1931, NAKURU TELEPHONE 051/2212415/6 Mobile: 0722-388616 FAX: 051/2215189 OCTOBER - NOVEMBER 2020 | SACCO TIMESEMAIL: info@cosmopolitansacco.co.ke | WEBSITE: www.cosmopolitansacco.com
