SACCO TIMES EDITION 31 by eric

Africa’s Agenda 2063: Key Contributions by Kenyan Saccos.

Of Co-operative Conversations: Re-evaluating the Co-operative Identity.

2020 World Savings Day: Key Insights For Saccos

SACCO TIMES

Hariet W. Masai

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Fraud Mitigation: Saccos to Deploy Data Analytics

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Hon. Peter Munya, CS, Trade, Industry & Co-operatives.

• Fortifying Sacco Cyber Security Posture: Effective Strategies Against Cyber-Attacks. • Harnessing Co-op Potential-Saccos Catalyzing Change in The Lives of Members. • African Continental Free Trade Area: Co-operatives Fostering Implementation www.saccotimes.co.ke

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

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SACCO TIMES | DECEMBER 2020 - JANUARY 2021

CONTENTS

CHIEF EXECUTIVE OFFICER Joan Mutindi EDITOR-IN-CHIEF Reinhard Mosagwe EDITORIAL June Njoroge STAFF WRITERS Anthony Mwachiro, Clarence Imbayi, Kipkoech Chirchir, Dickson Adhiambo, Doreen Atenya, Vincent Munga, Alexander Kimuri, Lilian Mutiso, Irene Atieno, Austin Nyambuoro, June Njoroge, Enock kipturgut, Malachi Motano, Eric Bosire. Brighton Makaori. SALES & ADVERTISING Dorcus Koech: 0715754145 Emma Mureithi: 0726 146753 Rose Murage: 0701581491 Mary Mbugua: 0726806065 DESIGN AND LAYOUT: Smartex Creative Graffix Email: smartexgraffix14@gmail.com Tel: +254 721 496 922 SUBSCRIPTION Major Capital Agencies Limited DISTRIBUTION AND CIRCULATION JETsam Distribution Limited PUBLISHED BY: Satimes East Africa Ltd View Park Towers, Utalii Lane 17th Floor, Wing C Suite 402 P.O. Box 41364 - 00100, Nairobi Cell +254724172670 / 0720380226 Email: satimeseastafrica@gmail.com Website: www.saccotimes.co.ke

S Hariet W. Masai

Saccos Catalyzing Change in The Lives of Members

Ukulima Sacco Introduces a Mortgage Product

Africa’s Agenda 2063: Key Contributions by Kenyan Saccos

Effective Strategies Against Cyber-Attacks

Age of Digital Saccos: Kenya Police Sacco Feted for Excellence

Members Urged to Embrace M-Boresha to Curb the Spread of the Covid 19

Imarika Sacco Set to Soar Higher in 2021 Driven by Technology

New Law: Securing Sacco Loans Using Household Items

Qwetu Sacco Spreads its Wings Across Taita Taveta County

Of Co-operative Conversations: Re-evaluating the Co-operative Identity

Lengo Sacco Embraces Technology to Spur Growth

Metro Trans PSV Sacco Celebrates the Kshs 238 Leasing Deal

Magereza Sacco Leads in Conducting Countrywide Member Education Drive

Mentor Sacco Members Count their Blessings One by One

African Continental Free Trade Area: Co-operatives Fostering Implementation

Fraud Mitigation: Saccos to Deploy Data Analytics

Saccos Diversify from the ‘Rich’ Pool of Traditional Savers

Briefing Room

Testimonials 46 SACCO TIMES

View Park Towers, Utalii Lane, 17th Floor, Wing C, Suite 402 P.O. Box 41364 - 00100, Nairobi Email: satimeseastafrica@gmail.com Cell: +254 722 663 953

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DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

EDITORIAL Dear Readers!

elcome to the 31st issue of Sacco Times Magazine; our final edition of 2020.As the pandemic year draws to a close, resilience has been our anchor in upholding our journalistic principle of ‘Keeping you informed.’ This has earned us the reputation as the premier and leading Co-operative magazine of reference. It has been a tumultuous year but the Co-operative movement continues to endure and thrive against all odds. Taking stock of developments in the sector in 2020, is synonymous to taking a leap into a somewhat Co-operative recession, that had thrust the movement into the throes of a plethora of challenges, chief among them being the devastating liquidity crisis. However, the burgeoning and proliferation of the global co-operative movement has been the silver lining; the movement has grown remarkably, if the new data by the World Council of Credit Unions(WOCCU), is anything to go by. The worldwide credit union movement has increased membership by 59% to 291 million; with 17 million new members in 2019.Africa has 37.8 million Sacco members, mobilizing savings of over $10.6 billion and $11.7 billion in loans. Kenya continues to hold the largest movement in Africa, with 8.5 million members drawn from 8,033 Saccos and an asset portfolio of Kshs1 trillion, ranking 7th globally. For this issue, we delved into a spectrum of divergent themes whilst still perpetuating the focus on telling Sacco member stories, at the request of our readers, who found our previous issue very inspiring and insightful. We had chronicled success stories of members whose lives have been transformed by the virtue of belonging to a Sacco; especially through the uptake of loans. In this regard, we have featured Ukulima Sacco, Kenya Police Sacco, Imarika Sacco, Qwetu Sacco, Lengo Sacco, Magereza Sacco, Mentor Sacco and Boresha Sacco. Co-operatives are gaining momentum and prominence, read on and discover how they have been identified as key vehicles in fostering the African Continental Free Trade Area (AfCFTA); in the ultimate realization of Agenda 2063, on the

Africa we want. In this age of digital disruption, cyber-attacks are an alarming concern and we have shared how Saccos can adopt effective cyber security strategies, to fortify their posture and protect member funds. In addition, we tell you why Saccos should employ data analytics, to mitigate fraud. In honour of the recent celebration of the 25th anniversary of the ICA statement on Co-operative Identity, we take a step back to reassess the co-operative ethical values and the seven founding principles which make up for the co-operative identity. This sparked conversation across the global movement and we share key insights from the discussions held. The 2020 World Savings Day was very eye-opening and we have shared tips pertinent to Co-operatives. The Global Women Leadership Network (GWLN) which seeks to empower women in Kenya, to seize leadership positions in the Co-operative movement; celebrated its second year since inception. The amendment of the Co-operative Societies Bill is still ongoing with Sacco leaders having recently met to make progress towards its fruition. The Annual Leaders’ Summit is also coming up, with this year’s theme being ‘Re-engineering Saccos post Covid-19’. On the briefing room section, we enlighten you on Sacco news updates and don’t forget to try our trivia challenge. Sacco Times Magazine, wishes all our clients and readers alike, a Merry Christmas and a Happy New Year 2021.Remember to keep safe this holiday season as the coronavirus is still at large, by adhering to the measures set by the Ministry of Health. Enjoy your reading! June Njoroge,

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

GROWTH

Harnessing Co-op Potential:-

Saccos Catalyzing Change in The Lives of Members By June Njoroge

he indelible footprint made by the Savings and Credit Co-operative Societies (SACCOS), in the lives of millions of members, across the country and beyond is remarkable; which is why the Co-operative movement has been burgeoning by the day. According to new data by the World Council of Credit Unions(WOCCU), the global credit union movement has increased membership by 59% to 291 million over the past decade. The Council affirms an addition of 107 million new members in the last decade, with 17 million members in 2019 to reach the current 291 million from 86,055 Saccos in 118 countries. In 2019, Credit Union assets, increased by more than 26% worldwide, while savings, loans and reserves also grew. Africa registered a 143% growth, recording the second-largest increase, after Latin America with a 153% growth, according to the new data. Africa has 37.8 million Sacco members, mobilizing savings of over $10.6 billion and $11.7 billion in loans. Kenya holds the largest co-operative movement in Africa, ranking 7th globally, with 8.5 million members drawn from 8,033 Saccos and an asset portfolio of Kshs1 trillion. Kenya recently scooped the 2020 Councilâ&#x20AC;&#x2122;s membership growth awards, registering a 14.2% growth. Ethiopia has the secondlargest Co-operative sector with a membership of 4.7 million. Rwanda comes in third with 3.7

million members, Tanzania 2.4 million members and Uganda 1 million. New data from SASRA, additionally indicates that in 2019, the total assets portfolio of 172 DT Saccos reached Kshs 556 billion, which was a 12.4% increase from Kshs 495 billion of 2018.A total of 31 Saccos control over 70% of the total assets. Total deposits stood at Kshs 380 billion from Kshs 341 billion of 2018, recording a 11.2% increase. Gross loans portfolio stood at Kshs 419 billion in 2019, a 12% growth from Kshs 374 billion of 2018.Net loans and other credit advances, grew from Kshs 359 billion in 2018 to Kshs 400 billion of 2019. The snowballing of the movement will continue, with Saccos responding to the needs of their members thereby economically empowering them. In different corners of the globe, the Co-operative movement has been growing, the WOCCU 2019 Statistical report indicates that in Asia, membership went up by 81%,48% in Oceania,30% in North America and 8% in Europe. The Council has a target of increasing membership globally to 260 million members by 2020 and to this effect set challenge 2025, on the digitalization of the global co-operative movement to increase membership. According to the study the cooperatives that had registered exponential growth

were those that utilized online and mobile channels to deliver services. From the Big 4 Agenda to Vision 2030, Co-operatives are central to the achievement of both initiatives. Co-operatives are also key vehicles towards the attainment of the United Nations Sustainable Development Goals (SDGs) and Africaâ&#x20AC;&#x2122;s Agenda 2063. Climate action is another key agenda that Saccos are engaged in to combat the climate change crisis, to help conserve the environment. Co-operatives are transforming the lives of millions across the globe through their different products and services but especially through lending. Governments across the continent are in cognizance of the integral role played by Co-operatives and continually inject support to the lucrative sector.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

HOUSING

Ukulima Sacco Introduces a Mortgage Product to Enable Members Own Homes By Malachi Motano

kulima Savings and Credit Co-operative Society, continues to play an important role in the realization of housing and mobilization of funds; in line with the government’s Big 4 Agenda on affordable housing for all. “As you are aware, the Kenyan Sacco sector is the largest in Africa and is globally ranked at the seventh position, according to a report by the World Council of Credit Unions (WOCCU). This puts us in a better position to lend to Kenyans at affordable interest rates,” says Sacco Chairman Dr. Philip Cherono. In its committed efforts to reduce the huge housing supply gap, to enable every Kenyan to own a home; the Sacco has partnered with the Kenya Mortgage Refinance Company (KMRC). The partnership will ensure that funds are availed for onward lending to members, primarily for mortgage uptake purpose. In addition, the Sacco will be able to lend to Kenyans at affordable interest rates, which is nearly half the current market rates.

Ukulima Sacco Chairman Dr. Philip Cherono. provision of quality financial services, in providing long-term funding and reducing our reliance on shortterm loans,” says the Chairman. According to him, as the Sacco introduces and adds the mortgage product to its catalogue, it would also be participating towards the realization of the affordable housing programme for the country; which as aforementioned is part of the Big 4 Agenda for the provision of affordable housing to citizens. While Kenyans are increasingly resorting to mortgages to acquire homes, the 2019 affordable housing

Prospective buyers will qualify for mortgages of up to Kshs.8 million, with a repayment period of up to 20 years. The funding is expected to drive the number of mortgage accounts, to an estimated 2,000 in the first year and 4,000 by the year 2022. “We are very happy that Ukulima Sacco is part of this great and noble initiative. The partnership with KMRC supports our mission of enhancing members’ empowerment; through the

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

KMRC CEO Johnstone Oltetia (left) CEO Ukulima Sacco.

yearbook published by Centre for Affordable Housing Finance (CHAF); indicated that the main barriers to mortgage issuance includes: asset-liability mismatch by tenor due to the relatively longterm nature of mortgage loans and short-term nature of bank deposits, limited access to capital markets funding for mortgages resulting in low supply of longterm capital, a complex legal and regulatory framework coupled with collateral requirements, making mortgages exceedingly expensive. Even though the number of mortgage loans has been growing by a compounded annual growth rate (CAGR) of 5.7% since 2013; the average mortgage size in Kenya has been growing at a higher CAGR of 9.6% from Kshs. 6.9 million in 2013 to Kshs. 10.9 million in 2017, thus locking out potential homeowners.

HOUSING According to CHAF, Kenyans generally access loans from Savings and Credit Cooperatives (SACCOs), which provide approximately 90% of Kenya’s total housing finance.

mortgage markets, with a key challenge to access decent housing. With a GDP of US$2,925 per capita and per annum as of 2016, few Kenyans can afford homes built by formal developers, resulting in mortgage lending being accessible to only a minority of the population.

This is attributed to Saccos interest rates, which remain low at 12%. However, Sacco financing remains highly constrained by the short-term nature of their deposit liabilities and short loan tenures, of not more than five years.

The Country is facing high rates of urbanization and population growth. Although only 32% of the population live in cities today, the figure is expected to grow to 50% by 2050, according to UN Population Division (2014).

This has resulted in slow home ownership with only 26.1% of urban dwellers, owning the houses they live in the main constraint being access to financing instruments. Kenyans’ homeownership aspirations have taken a remarkable turn, following the latest move by KMRC; which announced an arrangement to avail mortgages at 7% interest for Kenyans earning below Kshs. 150,000. Affordability is a major constraint to the growth of the housing and

The rapid urbanization has resulted in large informal housing and slum dwellings. Nearly 61% of urban households live in very poor-quality housing or slums, according to the Millennium Development Goals’ statistics. Provision of adequate housing for the low-income groups is a perpetual problem in cities. With a population of over 47 million people, the country faces a critical shortage of housing units. According to conservative estimates, there is already a backlog of 2 million housing units which typically increases by 150,000 units every year, due to several factors including the limited availability of mortgage finance and development finance. The lending to shareholders and customers by KMRC, was scheduled for December 2020. Richard Nyaanga the Sacco CEO, said the newly launched mortgage

product is a game-changer and thus will help in quenching the thirst of the majority of Kenyans, who are in dire need of owning a home. “We are well aware of the current social and economic difficulties, particularly to our sector. This means that we need to get extra creative and aggressive business ideas,” said Mr. Nyaanga. Ukulima Sacco has a countrywide network of branches in all the forty-seven counties, drawing its membership from the national and county governments; parastatals; private and academic institutions and business communities. Committed not to leave anybody behind, the Sacco with the approval of the regulator has designed it’s two mortgage loan products to cater for the low income; carrying up to Ksh. 150,000 under Makao bora and Kshs 450,000 under Makao halisi loan products respectively. The affordable housing loans under Makao Bora are funded through concessional loans mobilized by the National Treasury; through international development partners and extended to KMRC, for onward lending to participating financial institutions to finance affordable housing loans. They are capped at Kshs 4 million within Nairobi metropolitan (Nairobi, Kiambu, Machakos and Kajiado); Kshs 3 million elsewhere by the PMLs and also extended to borrowers with a monthly income of not more than Kshs 150,000. For Market Rate Housing Loans, Makao Halisi, the loans will be fully funded through the issuance of bonds at the capital markets.

Ukulima Sacco CEO Mr Richard Nyaaga presents a T-shirt to one of Ukulima’s oldest member during the 2020 customer service week.

These are loans extended to member institutions, to finance housing loans issued at market rates above the affordable housing loan.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

GROWTH

Africa’s Agenda 2063: Key Contributions by Kenyan Saccos By June Njoroge.

pledges towards this goal.

‘

Agenda 2063: The Africa We want,’ is Africa’s blueprint and master plan, for transforming Africa into the global powerhouse of the future. It is the continent’s strategic framework that aims to deliver on its goal for inclusive and sustainable development, repositioning Africa to become a dominant player in the global arena. It encapsulates not only Africa’s aspirations for the future but also identifies key flagship programmes which can boost Africa’s economic growth and development, leading to the rapid transformation of the continent. It also identifies key activities to be undertaken in its 10 year implementation plans, which will ensure that it delivers both quantitative and qualitative transformational outcomes for Africa’s people. Agenda 2063, is the vision of Africa’s future of a shared prosperity through social and economic transformation; founded on seven aspirations as key vehicles to its realization. Under each aspiration are key goals and priority areas to aid in implementation. Co-operatives have been playing a pivotal role towards the realization of the agenda through several aspirations. Africa has 37.8 million Sacco members, mobilizing savings of over $10.6 billion and $11.7 billion in loans. New data from the World Council of Credit Unions(WOCCU) shows that Africa had the second largest increase in membership, at 143%, with Latin America coming in first at 153%. Kenyan Saccos registered a 14.2% growth in membership, which catapulted the sector to scoop the membership growth award from WOCCU. Kenyan Saccos have been in numerous capacities contributing to the achievement of Agenda 2063; as it boasts of the largest Co-operative movement in the continent and ranking 7th globally. The Council’s new data indicate that Kenya has 8.5 million members drawn for 8,033 Saccos, with an asset portfolio of Kshs 1 trillion.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

Under the first aspiration of the agenda: A prosperous Africa based on inclusive growth and sustainable development; Cooperatives in Kenya have embraced its key goals of poverty eradication and creation of employment. The Ministry of Trade, Industry and Co-operative Development estimates that 80% of Kenya’s population derives their income either directly or indirectly through Co-operative activities. In addition, the sector employs more than 500,000 people whilst necessitating selfemployment especially through lending. Transformed economies is another goal under aspiration one whereby, Saccos have greatly boosted the economy through economic diversification and resilience bolstering key industries such as manufacturing and industrialization. Co-operative make up about 45% of Kenya’s Gross Domestic Program (GDP) with an asset base of over Kshs. 1 trillion, mobilized savings and deposits in excess of Ksh 732 billion and a loan portfolio of 700 billion. Modern Agriculture for increased productivity and production, is a goal under the first aspiration, which especially agriculture-based Co-operatives have been spearheading, to increase food production enabling the continent to feed itself whilst exporting. Environmentally sustainable and climate resilient economies and communities; is another goal under the aspiration, which further supports the Sustainable Development Goal (SDG) 13 by the United Nations on Climate Action.Co-operatives have been championing for environmental conservation with many having taken

In reiteration the theme for this year’s international co-operatives day was,’Coops for Climate Action’, where critical conversations were held and feasible solutions formulated by Co-operatives in their capacity to mitigate the global climate change crisis. Health and nutrition is another goal under the aspiration, which Saccos have been responding to, by offering quality health insurance services to their members. Education and Skills Revolution Innovation(STI) is another goal; which Co-operatives have been trying to address, through disbursing education loan products to their members enabling them to educate their children in different levels, at institutions of choice and especially enrolling them to tertiary institutions. Under Aspiration six: An Africa whose development is people driven, relying on the potential offered by African people especially its Women and Youth, and caring for Children; Saccos have made significant developments. A key goal under this aspiration is youth empowerment; whereby Saccos have been very accommodative of the youth into the movement. The Sacco Societies Regulatory Authority (SASRA) conducted a demographic study released in 2019, which debunked the notion that Co-operatives, have no place for the youth. The report revealed that the youth comprised of a third, of the total 4.97 million Sacco members across the 174 Deposit – Taking (DT) Saccos. The age bracket 25 and 35 years accounted for 23.46% of the total individual membership, coming in second after the 36- and 50-years age group who accounted for 28.88%. Co-operatives have been in their own capacity empowering the youth with skills to make them more productive and employable in their work environment. Agenda 2063 is achievable, with Cooperatives involvement as evidenced by Kenyan Saccos.

Sacco Times Magazine cares for you, and that’s the reason we want you to keep safe during this holiday season. The Covid-19 Pandemic is still at large, so as you engage in the Christmas celebrations, observe the safety precautions set by the Ministry of Health. Together we can stop the spread and stay healthy, while celebrating the Christmas and New Year festivities. Happy Holidays! PREVENTION IS THE BEST REMEDY. 6 EASY STEPS TO STAY SAFE FROM COVID-19 • Regularly wash your hands with soap or use a sanitizer. • Always wear a fitting mask when out in public. • Avoid touching your face, nose and mouth. • Observe Social distancing when in public of one metre away from the next person. • Stay at home. • Pay Attention to Hygiene. SIGNS AND SYMPTOMS Seek immediate medical attention if you show the following signs: • Fever • Coughing • Headache • Difficulty in breathing.

LET’S CONTINUE TO FIGHT COVID-19 TOGETHER! You can get the latest updates on our website: Saccotimes.co.ke SACCO TIMES MAGAZINE! ALWAYS KEEPING YOU INFORMED! #Merry Christmas # Happy New Year 2021#Stay Safe #We are in this together.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

TECHNOLOGY

Fortifying Sacco Cyber Security Posture: Effective Strategies Against Cyber-Attacks By June Njoroge.

avings and Credit Cooperative Societies (SACCOS) have swiftly embraced the age of digital disruption at full tilt especially in the wake of the Covid-19 pandemic, adopting technological advancements in their operations. However, this shift has posed a critical security challenge, exposing a dire vulnerability that needs to be urgently addressed. Before a Sacco embarks on adopting a financial technology infrastructure, there is need to prioritize getting a proactive and quality security methodology.

of bad news about cyber-attacks, identity theft, data breaches and hackers; Co-operatives need to implement quality cyber security processes, applications and procedures; which strengthen their defenses thereby setting up a security blanket around the Sacco. Before implementing effective cybersecurity strategies, Saccos should be aware of their critical assets and what their value is, establish potential risks, implement security controls, be aware of their internal and external threats then eventually evaluate and strengthen their cybersecurity posture. A cybersecurity posture

Saccos should implement effective security controls to help manage their risks and protect critical data assets from intrusions, security incidents and data loss. They are critical to detect, avoid, counteract and minimize security risks. There are several types of security controls that need to taken into account; preventive controls which attempt to prevent a security incident before it occurs; detective controls which identifies a security incident while its happening or shortly after; corrective controls which limit the damage following a security incident; catapulting the business to get back on track.

Co-operatives need to place a lot of emphasis on security, because they hold large amounts of highly sensitive data about members including financial and personal information such as credit scores, banking information and investment history. According to a cyber-security report in 2018, Kshs. 466 million was lost through computer fraud, business emails, fake cheques and identity theft. Challenge 2025 on the digitalization of the global cooperative movement set by the World Council of Credit Unions (WOCCU), identifies cybersecurity as one of the key focus areas to measure digitalization in Co-operatives. Cybersecurity refers to a set of strategies, techniques and controls to reduce risk and ensure that data assets are protected. Cybersecurity is of paramount importance and its fundamental for Saccos, to ensure that membersâ&#x20AC;&#x2122; data and funds are secure. With a constant barrage

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

assessment can help indicate how healthy or resilient a Co-operative is, when it comes to cybersecurity and how effectively it can protect against potential cyberattacks. Being aware of their cybersecurity posture, Saccos can develop a long-term security strategy that will protect them. It can also help in outlining a concrete roadmap that can help strengthen their cybersecurity defenses over time.

Saccos need a control based approach that can secure its infrastructure against intrusions, reduce its risk, strengthen its security posture, whilst lowering operational costs. Below are critical security controls that Saccos can start with, which were issued by the Center for Internet Security (CIS). 1. Saccos should take an inventory of authorized and

TECHNOLOGY unauthorized devices at their offices. Creating a list of all devices that are present and allowed on your network is highly recommended, to prevent unauthorized devices from entering the network. 2.

Saccos need to also take an inventory of authorized and unauthorized Software. All employees should be aware of what software has been installed on their systems who installed it and its functionalities. This will ensure that employees have the required knowledge about their internal environment, which can assist in responding faster and better to potential security breaches. Co-operatives should secure configurations for hardware and software appropriately, to strengthen their security posture to avoid their applications and operating systems from being exploited.

4. Saccos should conduct a vulnerability assessment; meant to highlight the vulnerabilities that threaten security and provide actionable recommendations for remediation. This activity is crucial to evaluate the security posture and monitor the health of the Saccosâ&#x20AC;&#x2122; environment. 5.

Co-operatives should reduce administrative privileges to a few employees, to reduce the likelihood of being affected by cyberattacks that can be caused by human error.

6. Co-operatives should look into monitoring, maintaining and analyzing audit logs. Saccos that dismiss monitoring or analyzing their security audit logs will undoubtedly have a difficult

time in detecting, understanding or recovering from an attack. 7. Saccos should look into protecting their browsers and email systems to minimize the attack surface and the opportunities for hackers to manipulate human behaviour. 8. Saccos should implement malware defenses. Malware is the most dangerous aspect of cyberattacks designed purposefully to attack systems, data or devices. Anti-malware solutions are able to monitor and detect malicious software whilst enabling effective defenses with anti-virus, antispyware and firewalls. 9.

Co-operatives should limit and control network ports such as mail servers, web servers or Domain Name System (DNS) servers in order to decrease the number of vulnerabilities that attackers can exploit.

10. Saccos must ensure that they have data recovery capabilities in place to facilitate restoring data that may have been compromised, altered or deleted. They should regularly perform backups of critical information. 11. Saccos should also implement boundary defense mechanisms to prevent attackers from gaining access into the internal environment. Such mechanisms include firewalls, proxies, traffic flow control, intrusion, detection and prevention solutions. 12. Co-operatives should have proper data protection techniques. This can be done by adopting a combination of data encryption, data loss prevention (DLP) and integrity protection strategies. 13. Saccos should enforce controlled or restricted access levels to their most critical and sensitive data. By implementing network segmentation encrypted communications and other types of access control, Saccos can prevent attackers from easily accessing sensitive assets, performing malicious activities and disrupting operations. 14. Saccos should address wireless access control or alternatively enhance their wireless security posture to prevent intrusion, data theft and malware infiltration. An attacker can easily gain access through a wireless network through a backdoor e.g. from the parking lot, reception area, staircase etc. 15. Co-operatives should conduct account monitoring and control; removing irrelevant or inactive accounts especially of former employees to decrease the number of opportunities for hackers.

16. Saccos should conduct regular skills assessments and security awareness trainings to educate employees; to acquire and apply the necessary knowledge and skills to help defend the Sacco from any attacks. 17. Saccos should secure their applications, software updates, firewall deployments and patch management to prevent application vulnerabilities from being exploited by attackers. This will help in detecting, preventing and correcting security weaknesses in applications. 18. Co-operatives need to properly execute response and management mechanisms when security incidents occur. They need to have defined procedures in place to detect, respond accurately and mitigate the incidents to prevent considerable damage to their data, financial standing or reputation. 19. Saccos need to regularly perform internal and external penetration tests to evaluate their preparedness for potential attacks and fix vulnerabilities before attackers can exploit them. Conducting simulation attacks and penetration testers can expose weaknesses in the Saccoâ&#x20AC;&#x2122;s operating systems, application Softwares or network devices. After implementing an effective cybersecurity strategy, Saccos can use it as a selling point and sell this higher level of security to their members, as a feature and competitive advantage over other Saccos. The key is for Saccos to create a culture of security that is noticeable to members and employees alike.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

TECHNOLOGY

Age of Digital Saccos: Kenya Police Sacco Feted for Excellence

in Enterprise ICT at the CIO Annual Awards, After the Recent Launch of a State of the Art Digital Platform; ’Pambazuka’ By June Njoroge

The Sacco has embraced in full throttle, the era of digital disruption, in line with Challenge 2025, on the digitalization of the global Co-operative movement.

he Kenya Police Sacco, one of the key eminent actors in the Cooperative movement, continues to set pace for other co-operators in the age of digital disruption. The highly esteemed Sacco has been feted at the CIO Annual Awards Competition; scooping the Gold Winner Award for recognition of excellence, in Enterprise Information and Communication Technology adoption in the Sacco sector. The award was especially attributed to the recently launched world class technology digital systems dubbed ‘Pambazuka’, anchored in state of the art innovating technologies to serve members. The launch of this unmatched and remarkable venture took place at the grand Villa Rosa Kempinski hotel. The Chief guests were the Cabinet Secretary for the Ministry of Interior and Coordination

of National Security, Dr Fred Matiang’i; State Department’s Co-operatives PS Mr. Ali Noor Ismail; Inspector General of the National Police Service Mr. Hilary Nzioki Mutyambai; NPS Deputy Inspector General Mr. Edward Mbugua; ACCOSCA CEO Mr. George Ombado and CAK CEO Mr. Daniel Marube, among other key contributors of the Co-operative sector. The Sacco has embraced the era of digital disruption in full throttle. This is in line with Challenge 2025 on the digitalization of the global Co-operative movement; an initiative by the World Council of Credit Unions (WOCCU). “The launch of Pambazuka is not only a modern and innovative way of managing our Sacco services, but is a very strong statement that we have we have stepped onto the 21st century mode of managing our organizations; by embracing technology which will enhance transparency and accountability in the manner in which we provide services.” Stated Dr. Fred Matiang’i.

Kenya Police Sacco wins the CIO Gold Winner Award, for Recognition of Excellence, in Enterprise Information Technology adoption in the Sacco Sector,at the CIO Annual Competiton Awards.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

TECHNOLOGY

Cabinet Secretary for Interior and National Security, Dr. Fred Matiang’i Inspector General of Police, Hillary Mutyambai, Principal Secretary of Cooperatives, Ali Noor Ismail, Kenya Police Sacco National Chairman, David Mategwa and CEO Solomon Atsiaya and GM ICT Tony Mutero at the Launch of Pambazuka in October 2020. He further commended the Sacco’s National Chairman, Mr. David Mategwa and the Board, for the good management that has seen the Sacco grow to greater heights of success. In reiteration, his sentiments were echoed by the Co-operatives PS Mr. Ali Noor Ismail,” The last 7 months have shown us that technology is the way to go, we congratulate and support the Kenya Police Sacco.” M-Tawi is the mobile banking platform birthed from this digital transformation journey that the Sacco embarked upon in 2017; with the primary goal of providing members with a more efficient, convenient and interactive digital platform that enhances member experience. Despite the Covid-19 pandemic, the Sacco managed to maintain the project timeline of this ambitious digitalization journey. The platform provides the best value for members because of

its interactive and user friendly interface. M-Tawi is accessible to members on Android, IOS and USSD via *653# available on Google Play store and App store for download. ‘With the new system, the Society is operating a new core banking solution ERP and alternative business channels key among them being M-Tawi. A mobile banking solution available on both the App and utilizing a USSD code.” M-Tawi has been in particular a timely addition to our menu by offering members a lot of flexibility as we continue to embrace cashless transactions, in the mitigation of the Covid-19 pandemic.” noted the National Chairman, Mr. David Mategwa. This digital journey commenced with a meticulous assessment of the then prevailing state of the systems, people and technological processes of the Society; followed by another of the cyber security

*653#

preparedness whilst developing a strategic roadmap, for the governance and management of information and technology in the Society. ‘Our members are at the epicenter of this digital transformation, having noticed the gap during an analysis survey which necessitated for a radical transformation of the Society’s ICT infrastructure. With the new system we have automated manual tasks such as standing orders, loan recoveries, interest computation and posting’ stated the Sacco CEO, Mr. Solomon Atsiaya. “It is my expectation that the new system will further enhance customer experience and achieve high level operational excellence, thereby cementing the Sacco’s positon as the market leader in the industry” stated the IG, Mr. Hilary Nzioki Mutyambai. The Sacco sought the services of the best ICT providers in the industry to ensure the best results; engaging

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

CSR and access to new transactions such as funds to fellow members. It also enables instant service request capability that ensures members can access Sacco services from different locations and seamless omni-channel integration, which allows for the introduction of new channels such as internet and agency banking.

Kenya Police Sacco GM Operations and Strategy Mr. Simon Tanui hands over donations of Sports kits and Equipments to Kenya Police Hockey Team.

Kenya Police Sacco GM ICT & Business Innovations Mr. Tony Mutero, handing over donations of TVs, DSTV decoders to the ASTU football team.

‘We at Intrasoft International are proud to be part of this deployment, we are pleased that our core banking systems for Saccos is at the heart of this new dawn.’ stated Mr. Alexandros Manos, the CEO of Intrasoft International; which was engaged in the development of the system.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

Kenya Police Sacco Scoops the 2020 GCR Award! Kenya Police Sacco has recently also scooped the ‘Best National Long and Short Term Financial Lender’ 2020 Award, by the Global Credit Rating Company (GCR) for the second year in a row. The agency affirmed ratings of BBB(KE) and A3(KE) respectively, with the outlook accorded as Positive. This is attributed 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.

top consultants in the country to ensure that the best project management services were observed. KPMG provided project management services whereas PWC provided quality assurance.

‘A project like this one integrating profits with mobile banking and other channels brings great benefits, allowing Sacco members faster and more efficient on-time salary processing, loan processing

These systems ensure that members can interact with their Sacco account 24/7 from any location through their mobile devices.” He added. He further lauded the National Chairman, Mr. David Mategwa, and the Board of directors for leading them with a steady hand through the project maintaining focus at all times.

The report reflected that the Kenya Police Sacco has a strong capitalization, solid risk position, stable funding structure and adequate liquidity. “The outlook is positive. This reflects our expectation of the Sacco’s cost of risk, continuing to outperform the sector and some normalization of earnings over the next 12 months.

Kenya Police Sacco GM ICT & Business Innovations Mr. Tony Mutero, handing over donations of Sports kits to the ASTU football Team.

We expect the capital position to remain strong supported by a GCR leverage ratio above 20%; driven mainly by good earnings and a conservative dividend

TECHNOLOGY policy relative to peers. The risk position is expected to remain in line with direct peers but better than the sector average, with credit losses expected to peak at around 2% over the outlook horizon. The liquidity position is expected to remain adequate for the structure of funding.” The report indicated. In addition, it further stated that the funding and liquidity position of the Sacco reflects a very stable funding structure, with ‘non-withdrawable’ deposits accounting for 90% of total customer deposits in the 2019 financial year.

Kenya Police Sacco education drive at GSU Training School Embakasi.

The Sacco’s funding structure has proven to be robust, evidenced by withdrawal levels not increasing sharply even with the ongoing pandemic. The deposit book is also very diversified, with the top 20 depositors accounting for less than 1% of total deposits. The Sacco’s risk position is a positive ratings factor, better than the wider financial institutions sector. “The Sacco’s strong capital position is a key rating strength, with a GCR Leverage ratio of 22.7% for the 2019 financial year. The capital position is structured around strong member capital contributions and supported by historically good internal capital generation (with return on assets in the 5% to 7% range over the past four years) and a lower than peers’ dividend pay-out ratio. GCR expects the strong capital position to persist into the long term.” The report indicated. Kenya Police Sacco, highly ranked in the latest SASRA Sacco Supervision Annual Report. The distinguished Sacco was feted as the third wealthiest deposit – taking Sacco in the country, with assets worth Kshs 35 billion. It registered the second highest growth rate among the large-tier deposit taking Saccos, from 19.28

Kenya Police Sacco Education drive at the ASTU training School in Gilgil. % of 2018 to 20.28% in 2019 according to the latest Sacco Supervision Annual Report released by SASRA. On the Sacco’s initiative in partnership with the state-backed Kenya Mortgage Refinance Company (KMRC), to bridge the gaping housing deficit through the provision of affordable mortgage products in line with the government’s Big 4 Agenda; the Sacco has already commenced rolling them out which was also highlighted at the launch. “Through the Sacco’s new affordable mortgage products, there are houses built and reserved for police officers at Park road so that we can enjoy better quality of life under the Big 4 Agenda.” Mr. Fred Matiang’i noted. CSR The Kenya Police Sacco continues to engage in Corporate Social Responsibility and Investment, in line with the 7th Co-operative principle on

concern for the community. The Sacco donated sports kits and equipment to the Kenya Police hockey team. The ASTU football team also received donations of sports kits, equipment, TVs and DSTV decoders from the Sacco. Country Member Education Drive Ensues The Sacco is back on the road again, for the second phase of the countrywide member education drive, in line with the 5th Cooperative principle on Education, Training and Information. It has been a great year of remarkable achievements for the prestigious Kenya Police Sacco and the best is yet to come in 2021.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

Seasonâ&#x20AC;&#x2122;s greetings from Sacco Times Magazine to our highly esteemed clients. As the year draws to a close, we reflect on the past year and count you among our blessings. Our sincere gratitude goes to all of you, for the steadfast business support demonstrated in our many editions. It has been a challenging time for the Co-operative movement and affiliated entities in the wake of the Covid-19 pandemic. However, resilience has been our anchor and the holiday season is the perfect time to soak up some cheer. We wish you a Merry Christmas and a prosperous 2021.Wishing you a season of joy and cheer. We appreciate our loyal clients and look forward to perpetuate our business partnership in 2021: Kenya Police Sacco , Imarika Sacco, Safaricom Sacco, Stima Sacco, Kimisitu Sacco, Harambee Sacco, Cosmopolitan Saccco, Imarisha Sacco, Boresha Sacco,Wakenya Pamoja Sacco, Ollin National Sacco, Finnlemm Sacco, Universal Traders Sacco (UTS), Tower Sacco, Mentor Sacco, Mombasa Port, NewFortis Sacco, Capital Sacco, Unaitas Sacco, Lengo Sacco, Dimkes Sacco, Tabasamu Sacco, Mwito Sacco, Stegro Sacco, Magereza Sacco, Transnational Times, Kisumu Teachers Sacco, Bingwa Sacco, Metropolitan Sacco Biashara Sacco, Skyline Sacco, Orient Sacco, Solution Sacco, Tai Sacco, Winas Sacco, Patnas Sacco, IG Sacco, Wevarsity Sacco, GDC Sacco, Kimbilio Daima Sacco, Ndege Chai Sacco,Ukristo na Ufanisi, Kwetu Sacco, Yetu Sacco, Shirika Sacco, Qwetu Sacco, Ukulima Sacco, Daima Sacco, Mafanikio Sacco, Shoppers Sacco, Jitegemee Sacco, Tabasuri Sacco, Kitui Teachers Sacco, Gusii Mwalimu Sacco, Southern Star Sacco, Elimu Sacco, Vitikas Sacco, Kenya Achievas Sacco, Kenya Bankers Sacco, Siraji Sacco, Umoja Wendani Sacco, Maisha Bora Sacco, Mudete Sacco, Hazina Sacco, Unison Sacco, Afya Sacco, Fortune Sacco,Teleposta Sacco, Waumini Sacco, Kenpipe Sacco, Mhasibu Sacco, Chai Sacco, Enea Sacco, Eco Pillar Sacco, Balozi Sacco, Taqwa Sacco, Lainisha Sacco, Synergy Financial Advisory and Taifa Sacco.

Merry Christmas AND

HAPPY NEW YEAR 2021

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

TECHNOLOGY

Members Urged to Embrace M-Boresha to Curb the Spread of the Covid 19 Pandemic By Enock Kipturgut

Mr Chebiegon informed Delegates during ADM in August that the Chief Executive Officer (CEO) Dr Moses Chebor is due to retire having served the Sacco with honesty and diligence for over thirty five years. In addition, he encouraged members to buy shares, borrow and repay promptly and continue to save thereby yielding high rewards.

oresha Savings and Credit Co-operative Society (SACCO) Board of Directors and Staff; wishes Members and Stakeholders a Happy Christmas season and a New prosperous year 2021, full of God’s blessings. Speaking to Sacco Times Magazine, the Chief Executive Officer (CEO)Dr. Moses Chebor, said that despite the Covid-19 Pandemic; Sacco operations have continued to be carried out according to the regulations set by the Ministry of Health, to combat the spread of the virus. The management has put in place stringent measures, in all its branches and also strengthened the M-Boresha platform, so that members can be served conveniently through mobile services. “We urge our members to adhere to the Ministry of Health protocols to curb the spread of the coronavirus even as they celebrate Christmas,” said Dr. Chebor. He noted that the year has been very challenging. The closure of some business & learning Institutions, Churches, limited travel and gatherings has to a large extend hit hard our Members who depended directly on these activities. Some Members lost income and are unable to service their loans. The SACCO has initiated dialogue with the affected Members with a view to reschedule the loans. He further added that the Sacco has made positive growth in Membership, branch establishments, Asset base. The Sacco opened a new branch in Iten town of Elgeyo Marakwet County in September, to better serve members in the vast County. The Sacco Chairman Mr. Albert

Boresha SACCO has diversified from its traditionally salaried based products to micro, small and medium enterprises and Agri-business. Impact has been felt within the communities it serves for Members have attained economic and social transformation through utilizing various financial products offered by the Sacco and are upbeat that their future and that of their upcoming generations is safeguarded by the Sacco.

Boresha Sacco CEO, Dr. Moses Chebor.

Members attribute their economic breakthrough to faithful patronage of society’s various products that meet their needs.

M-Boresha Just Dial

*434# • Deposit

Boresha Sacco Chairman Mr. Albert Chebiegon. Chepyegon called on members, to continue to recruit their family members to the Sacco, hence enabling them to borrow loans. He assured the Members that the Sacco management has always ensured compliance as required by Sacco Society Regulatory Authority (SASRA). “We also adhere to the Society’s by laws and the strategic plan in running the day to day activities of the Sacco, therefore members’ funds are in safe custody,” Said the Chairman. Mr Chebiegon. He said the Sacco has undergone numerous transformations from branding and Branch expansion across the region. Boresha Sacco is rated a tier one SACCO with an asset base of Kshs 7.3 billion.

- School Fees Deposit - Shares Contribution - Account Deposit - Loan Repayment

• Mobile Advances - Salary/Dividends Advances

• Withdrawal to M-PESA • Inter-Account Transfer • Airtime Purchase & Utility Bills Payment

Friendly, Convenient & Easy for You

Boresha Sacco

info@boreshasacco.co.ke Boresha SACCO @BoreshaSACCO

www.boreshasacco.co.ke

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

TECHNOLOGY

Imarika Sacco Set to Soar Higher

in 2021 Driven by Technology By Anthony Mwachiro

he Coast giant Imarika Sacco is set to scale greater heights of success in 2021; if the budget projections unveiled during the Society’s Special Delegates Meeting (SDM) held at a Mombasa resort, are anything to go by. In attendance were the KUSCCO Advocacy Manager Mercy Njeru, who represented Mr. George Ototo, KUSCCO Group Managing Director; Kilifi County Government Chief Officer in the department of Trade, Tourism and Co-operative, Mary Mkare; Mr. James Mwasi, Kilifi County Commissioner of Co-operatives; Mr. David Mategwa, Chairman Kenya Police Sacco; Mr. Joseph Munga of CIC and Mr Frederick Nguma, KNUT Malindi branch Executive Secretary. The Society has projected an asset growth of Kshs 1.2 billion in the year 2021. Technological advancements are at the epicenter of the Society’s 2021 projected plans, as

emphasized by the Chairperson Mr. Renson Ndoro in his speech; which assured members of continued sourcing for digital channels to enhance convenience and bring services closer to members, especially in the wake of the Covid-19 pandemic as a measure to safeguard members. The move is well aligned to guidelines issued by the Sacco Societies Regulatory Authority (SASRA), on best practices for Co-operatives to navigate during these turbulent times. In addition, the move is a step in the right direction in acceptance to Challenge 2025, set by the World Council of Credit Unions (WOCCU) on digitalization of the global co-operative movement. “In light of this, the Sacco is in the process of rolling out an Agency banking platform that will enable members to access Sacco services, without travelling to the physical branches. The Agency banking platform dubbed “Imarika Papa Hapa”, will not only serve existing members but also for on boarding new members, thus assist in growing the Sacco membership.” Stated the Chairman Mr Renson Ndoro.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

“The effective use of technology in the development and delivery of financial products and services; is one of the ways that the sector can position itself to sustain growth. Again the millennials who we target as potential members, are always on their phones and it’s good as the Sacco fraternity to come up with products to bring them in.” the Kilifi County Government, Chief Officer, in the department of Trade, Tourism and Co-operative, Mary Mkare advised, maintaining that the future of the financial sector is through technology. The Sacco intends to greatly increase membership having allocated Kshs 43 million, in their 2021 budget for marketing purposes, with plans underway to open a new branch in Mombasa County. Statistics from the Sacco’s marketing department indicate a positive growth trend. Despite the pandemic, the department was able to recruit about 6645 new members, between January to September 2020. Imarika Sacco has been growing at a fast pace and the management, emphasizes on the need to serve members more efficiently and satisfactorily. In this regard, the Society’s General Manager in Finance, Mr. Josephat Kitsao, revealed that they have reviewed the interest rate as

TECHNOLOGY they focus to make members feel more comfortable.

According to the Chairman, the Sacco has been growing at an average growth of 13% from 2017 to 2020. “Due to the impact of the Covid 19 pandemic in 2020, the Sacco has registered a significant drop with the actual anticipated amount to be realized in total assets is at Kshs 9.2 billion, compared to the target of Kshs 10.2billion. For the business plan 2021, the board and management propose a 13% projected growth.” He noted, further revealing that the management has invested heavily in technology, including the acquisition of a USSD code *440# to facilitate mobile banking services. “We started piloting our new USSD system with a few members of staff, board members, delegates and finally the entire Sacco membership. This service which will be rolled out this November, will see deposit transactions via the Sacco Mpesa pay bill number 4404404, which shall be posting directly to the members’ accounts.” he added. Mary Mkare keenly pointed out that Imarika Sacco was the largest Sacco in the Coast, controlling Kshs 5.8 billion of the Kshs 6.2 billion total funds by the Co-operative sector, as at December 2019; with 94% of residents in Kilifi being members of Imarika. According to her, Imarika Sacco

1) Imarika Sacco chairman Renson Ndoro making a point during their SDM. 2) Imarika Sacco’s supervisory commitee chairperson, Masoud Mangale, making a presentation during the SDM.

remains the leading financial institution in Kilifi, in the provision of requisite funds for capital investments. “As the County department in charge of co-operatives, we will continue to support the capacity of leaders and members through education and training.” She stated, further challenging the management to have a team that will keep innovating products and services for members. The Cooperative development office assured the Co-operative movement in Kilifi, of their commitment in providing the necessary playing ground for prosperity in the sector. The Sacco is looking forward to the official opening of the long awaited Imarika Plaza, with the completion date set for the 30th of November 2020.

3) Mary Mkare, Chief Officer in the department of Trade, Tourism and Cooperatives in the county government of Kilifi addresing delegates as chief guest during their SDM. 4) Section of Imarika Sacco delegates during their SDM at a mombasa resort. 5) Section of Imarika Sacco delegates during their SDM at a mombasa resort. 6)

Kilifi county government cooperative development officer Mary Mkare shares a point with Imarika Sacco chairperson, Renson Ndoro during their Meeting. Pictures by Anthony Mwachiro.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

a residential house Ujenzi Max Repayment -15Loan years Ujenzi Affordable Makao interest rates

Loan

This is to enable members to construct a house on an already existing land parcel.

Loan

Ujenzi Loan

Loan Duration 108Months (9years)

Product Purpose A mortgage product for members who wish to purchase ready made residential property in cities, municipalities and towns in Kenya for owner occupation. Product Characteristics

a) Loan amount as determined by ability to pay as follows: Enable Members to purchase • Affordable Housing Mortgages upto 4m This is to enable members to construct a residential • Market Mortgages house above 4m upto 7.5m a house on an already existing land parcel. b) Interest rate as per below:Max Repayment -15 years • Mortgages of Upto 4m - 9% pa on reducing balance Loan Duration 108Months (9years) basis. Affordable interest rates • Mortgages of over 4m upto 7.5m at the rate of 9.5% pa

Product Purpose To enable a SACCO member to construct or improve a residential house for owner occupation.

on reducing balance basis.

c) Repayment Period 15 - 25 years

a) Up to 100% financing on residential housing construction.

For enquires contact: b) Member can purchase a plot and develop a home at his own taste and preference in a city, municipality and town in Kenya for owner occupation. d) Loan amount as determined by ability to pay as follows: • Affordable Mortgages upto 4m • Market Mortgages above 4m upto 7.5m e) Interest rate as per below:• Mortgages of Upto 4m - 9% pa on reducing balance basis. • Mortgages of over 4m upto 7.5m 9.5% pa on reducing balance basis. f) Max of up to 25 years repayment period

for enquires contact:

for enquires contact: For enquires contact:

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

UPDATE

New Law: Securing Sacco Loans Using Household Items By Our Correspondent.

will decide whether to ratify their own regulations, to accommodate the changes in their business procedures,” Mr Mwaka noted.

embers of Savings and Credit Co-operatives (Saccos) will soon qualify for loans using movable items such as household goods, livestock, office equipment, electronics and motor vehicles to serve as additional security for the uptake of loans. Talks are ongoing between the Business Registration Service (BRS) who are deemed as the custodians of movable security items and Saccos, to expand and include movable items in their loans securities, like banks.

The law and regulations created a single electronic registry for movable assets used as security for bank loans, which makes it easier for borrowers who do not own land or buildings to also access loans on strength of the movable properties.

Mr. Kenneth Gathuma,CEO & Director General BRS.

Data from Central Bank of Kenya (CBK) indicated that in the 12 months leading to August 2019, Kenyans borrowed Kshs 43.56 billion from banks using household items, office equipment and livestock making for a third of the total loans issued by banks in the period. The Movable Property Security Rights Act 2017, permits the use of movable items as collateral, as well as immovable assets which are primarily buildings and land; a key diversification to accommodate more Kenyans to take up loans. At present, the Sacco lending model requires guarantors for the issuance of credit, hence in case a borrower defaults, part of the loan is covered by the amount guaranteed by the guarantor. “We have an engagement to sensitize and give Saccos awareness on what needs to be

Borrowers will be required to register the assets as collaterals at the government online platform; eCitizen under the business registration service. According to the regulations, a borrower can access credit from multiple lenders with the same asset, but the first lender who registered the security right will have priority in the event of default. “The issue of Movable Properties Security Regulations is about priority rights. If Saccos register interest in movable asset registry, it will give them priority among other lending institutional peers, when they want to reclaim that particular interest,” he added.

SASRA CEO John Mwaka

done to come into this lending ecosystem,” noted the BRS director general Kenneth Gathuma. The Sacco Societies Regulatory Authority (SASRA) CEO, Mr John Mwaka, stated the move is dependent on Saccos, who would have to amend their respective by-laws for operationalization as opposed to the industry’s regulations.

According to Mr Gathuma, Saccos will act as creditors in order to register security rights of the assets issued by their members or guarantors. Consequently, in case of default in the repayment of loans, there would be rise in interests in competing claims to the assets’ rights.

“During the annual general meetings, members DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

GROWTH

Qwetu Sacco Spreads its Wings

Across Taita Taveta County

HE Granton Samboja (Governor Taita Taveta County) cutting the tape to mark the official opening of the new Qwetu Sacco Branch in Taveta. By Anthony Mwachiro

wetu Sacco has embarked on mechanisms aimed at ensuring the Society meets the demands of its fast growing numbers. Membership has been growing steadily over the last three yearsfrom 37,458 members as at December 2018, to about 50,000 members as at October 2020. To match the growing numbers, the acclaimed Sacco has implemented expansion strategies with the launch of a new branch in Taveta. During the Sacco’s Special Delegates Meeting (ADM), held on 31st October 2020 at Market View Hotel, which also marked the official opening of the Qwetu Sacco Taveta branch; the Chief Executive Officer Charles Kaba, assured members of the management’s commitment in delivering improved services.

Taita Taveta County Governor, Granton Samboja giving his speech at the official opening ceremony of the Qwetu Sacco Taveta branch.

Qwetu Sacco Chairperson, Alfred Mlolwa (left) introduces Taita Taveta Governor, HE Granton Samboja to the Qwetu Sacco Management Board.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

“We have grown our asset base from a humble Kshs 600 million, to the current Kshs 2.2 billion. This calls for measures, which will ensure that our members acquire services, in a spacious and diligent manner.” stated the CEO. Qwetu Sacco Chairperson Mr. Alfred Mlolwa, noted that despite failing to conduct the annual delegates meeting due to the Covid 19 Pandemic restrictions earlier this year, the Sacco was able to pay dividends 12% and interest on long term loan deposits 9.2%, with guidance from the regulator (SASRA). “There is still a chance of reinvesting part or whole, of your interest deposits and dividends on shares. We urge our members to notify the secretariat of the same, before withdrawing the cash.” Advised Mr. Mlolwa. The Taita Taveta County Governor Granton Graham Samboja, who was one of the chief guests, lauded the Society for opening the branch; adding that it was a critical move aimed at creating an enabling environment for investments. “No one can initiate development projects, or invest and prosper without getting a loan. Qwetu is here to give opportunities to all of us to invest and grow. There is more benefit in investing in Qwetu Sacco, as compared to other financial institutions in the County.” Noted the Governor, calling for all to take advantage of the Society’s products to invest especially in agri-business. He maintained that Qwetu

GROWTH

Qwetu Sacco CEO, Charles Kaba giving his address to delegates at the SDM.

Taita Taveta County CEC in charge of Trade and Cooperative Development, Vumi Ringo shares a point with Qwetu Sacco Chairperson, Alfred Mlolwa at the SDM.

had over Kshs 1.6 billion in the loan portfolio and over Kshs 1.4 billion deposits as at 31st December 2019, which is a strong foundation for all to invest. The renowned Sacco has proved to be the best financial institution, that has gained trust not only from the residents but also officials from County Government of Taita Taveta, led by the County assembly and the executive.

Qwetu Sacco has set aside funds to construct a multi million plaza in Voi town which will serve as the head office for the sacco come 2021.

A section of Qwetu Sacco delegates during the 2020 SDM in Taveta.

According to Mr. Crispus Tondoo, the Member of County Assembly Bomani ward, in Taita Taveta County; the public has nothing to worry about in terms of the security of their savings while investing in the Society.

The County CEC in charge of Trade and Co-operative Development in Taita Taveta County Government, Vumi Ringo, commended the Society for exercising wisdom in joining both functions. According to her, the move helped the Sacco to save on resources, to further spur growth of investments.

“Out of the 33 members of County assembly, 27 of us have invested in Qwetu and I can assure you this is the right institution to invest, for both residents and the entire County at large.” noted the MCA. Similarly, the Society has planned to widen its presence in the entire country, with measures that will see the delegates and the marketing department embark on a recruiting drive.

According to budget estimates for the year 2021, Qwetu Sacco has projected a growth of Kshs 199 million in total assets. In a statement, the management also revealed that they have allocated a budget to equip members with education, to assist them in making informed decisions.

Vumi Ringo, CEC in charge of Trade and Cooperative Development in Taita Taveta County Government giving her speech to Qwetu Sacco delegates at the 2020 SDM.

“The Co-operative Sector contributes to the social and economic development of the County, with the aim of poverty eradication, creation of employment and equitable distribution of resources.” She noted. The Sacco looks forward to a more fruitful 2021 on all fronts.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

QWETU SACCO LTD FAIDA LEO NA KESHO

FOSA PRODUCTS  Saving accounts  Qwetu super deposit  Qwetu jibambe accounts  Fixed Deposit Rates (FDR)  Toto wa Qwetu account  Group organization account  Salary processing and payments  Pension processing and payments

BOSA LOANS  Qwetu Development  Qwetu Smart Loan  Emergency Loan  School Fees  Spif Loan  Qwetu Super Loan BOOKSHOP SERVICES  Photocopy Services  Exercise Books  Test Books  Stationeries  Games items  Story Books

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FOSA LOANS  Pre salary advance  Salary advance  Prestige advance  Overdraft on pending loans  Cheques  Qwetu Express loan  Qwetu Express plus loan  Qwetu Personal loan  Qwetu Plus Loan MICRO CREDIT LOANS  Qwetu Biashara loan  Qwetu Kilimo Biashara loan  Asset Financing  LPO Financing  Qwetu Women Enterprise loan  Qwetu Youth Enterprise Loan  Qwetu Special Class loan  Qwetu Boda boda (Asset) loan  Qwetu Micro Elimu loan  Qwetu Ng’arisha Nyumba loan

OTHER SERVICES  ATM Services  Mobile Banking  Spot Cash  SMS alerts Voi Branch Mwatate Branch Taveta Branch Njukini Branch

call 0728 483 398 call 0716 195 625 call 0728 483 321 call 0700 895 513

FAIDA LEO NA KESHO

SACCO MAY - JUNE2020 2019- JANUARY 2021 SACCO TIMES TIMES || DECEMBER

UPDATE

Of Co-operative Conversations: Re-evaluating the Co-operative Identity By June Njoroge

020 has marked the celebration of the 25th anniversary of the ICA statement of the Co-operative Identity. This prompted reflection, reassessment and conversation, delivered under the banner ‘Co-operative Conversations.’ The International Co-operative Alliance and the Co-operative College UK hosted two online events, gathering co-operators in a spirited discussion. The speakers were key in the formation and definition of the Statement on Co-operative Identity, its co-operative and ethical values as well its seven co-operative principles. Martin Lowery Chair of the ICA’s Co-operative Identity Committee, believes the principles need to change with the times and making sure the language of the principles is as inclusive as possible. “The identity statement is an attempt to create global inclusion but at the same time we need to reflect the diversity between us,” he said. The Statement on the Cooperative Identity states that a Co-operative is an “autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-controlle d enterprise.” In a written message Sir Graham Melmoth, former president of the ICA said, “The statement itself is an

encapsulation of co-operative aims and principles. It is good to have it in such a manageable form, giving us all a workable definition of a co-operative. “In addition, Akira Kurimoto, Chair of the ICA Asia and Pacific Research Committee, said that 1995 was a tipping point for the co-operative movement. He explained that while in the 1980s co-operatives were not seen as a viable option for development, the United Nations changed its attitude after the identity statement was formalized. Eventually it was adopted in the UN Guidelines for Co-operatives and ILO Recommendation 193 on the Promotion of Co-operatives. The Statement was drafted, debated and agreed upon in Manchester, by over 1,200 representatives from 90 countries. This was 25 years ago in 1995 and it was guided by the late Professor Ian MacPherson and revised by the ICA board, with input from Co-operative movements from all over the world. Mervyn Wilson, chair of the Co-operative Heritage Trust in the UK, who helped draft the statement, believes it provides a “crystal-clear shared cooperative identity” and warned against “tinkering” with it. Its language is already inclusive and leaves room for interpretation, he argued.

Co-operative identity does not remain static and immutable. The Statement encompasses seven principles which include: Voluntary and open membership, Democratic Member Control, Member Economic Participation, Autonomy and Independence, Education, Training and Information, Co-operation among Co-operatives and Concern for the Community. Co-operatives are also based on the ethical values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others. To reflect on how we have shaped our identity over time CONTINUED ON PAGE 29

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

GROWTH the platform, without visiting the Co-operative banking halls; reminding them that the future of cash transactions is bleak with the surge in the Covid-19 cases. In addition, she noted that the move would ensure that the Sacco would be in a healthy competition within the sector, which would enable the enrolment of more youth while phasing out the 20th century analogue models. She emphasized that technology was the way to go with the youth, who are deeply engaged in technology.

Lengo Sacco , CEO, Mr.William Yaa, Chairman Mr. Jonathan Kahindi Charo, look on, as the retiring Chairman, Mr. George Ndaa Tune, receives an award from Ms Mary Mkare, County, Chief Officer for Trade and Co-operatives during the 2020 SDM.

Lengo Sacco Embraces Technology to Spur Growth By Our Correspondent

he renowned Lengo Savings and Credit Co-operative Society, has embraced technology as its backbone to spur growth; boosting customer experience and satisfaction through the efficiency and convenience, brought about by employing technological solutions in service delivery. Speaking during the Society’s Special Delegates Meeting (SDM) held at the Kenya Red Cross hall in Malindi constituency, Kilifi County; the Sacco Chairman Mr. Kahindi Charo said that before the end of the year the Society would roll out a mobile banking platform, while awaiting approval from the Sacco Societies Regulatory Authority(SASRA). The Kilifi County Government, Chief Officer, in charge of Trade and Co-operative Development,

Ms. Mary Mkare, applauded the Sacco on the vital move to adopt mobile banking. “I wish to applaud the Sacco’s plans to commence mobile banking, while awaiting the regulatory approval,” she pointed out. She added that the move will also enable Sacco members to transact through

“Let the Sacco use an alternative avenue to be able to recruit members through technology, rather than outdated methods,” she pointed out, citing that social media is vibrant and popular with the youthful generation. The Sacco approved their 2021 budget estimated at Kshs 77.9 million. The budget is the grand total income with a total liquidity investment income of an estimated Kshs 280,000, compared to this year’s Kshs 230.000. “The Society’s total interest in loans in the estimated budget, is at the tune of Kshs 40.8 million compared to this year’s budget of Kshs 32.7 million,” Mr Jembe pointed out. He further disclosed that the Society’s Front Office Service Activity (FOSA) and other total income of the 2021 budget, is at Kshs 11.8 million compared to the current one which was Kshs 9.8 million. Despite the challenges the Sacco has been facing, it has managed to loan members Kshs 124,135,500 compared to Kshs 87,110,192 in the same period last year, indicating a positive growth of 42 per cent.

Kilifi County Chief Officer for Trade and Cooperatives,Ms Mary Mkare, addressing, Lengo Sacco delegates, during the SDM held at the Malindi Red Cross Hall.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

The Sacco plans to convert the site office in Mtwapa into a fullyfledged branch in 2021.The Chairman, Mr Charo, said the move was a result of more people joining the Sacco; adding that it would boost marketing as it is strategically placed in the area. “At the moment, the Society is

GROWTH working on a plan to open a site office in Mariakani, along the Nairobi and Mombasa Highway due to the activities in the area,” he pointed out. He further noted that member recruitment has been adversely affected by the deadly disease. However, the Sacco managed to recruit 2,436 members towards the end of the year, which is a 14% growth despite the Covid-19 pandemic.

applauded the Sacco for observing the gender rule when recruiting their staff. She said the County government was in line with the national government, on the Big 4 agenda, as they have started registering housing co-operatives as requested.

“The total membership of the Society now stands 19,783 as compared to 17,347, at the close of the previous year,” he said. The Sacco further lauded the County retirees, who have opted to retain their membership. Mr Charo said that the Society would come up with a maximum amount of loan grant to the retirees, who are out of the County payroll. He further noted that the growth of members’ deposits this year stands at Kshs 186,686,183 as compared to Kshs147,365,669, in the previous year; registering a growth of Kshs 39,321,514 at 26% this year.

Ms. Mkare lauded the Sacco board members, management and staff for steering Lengo Sacco in the right direction; being able to recruit members despite the Covid-19 pandemic protocols and guidelines.

Ms. Mkare assured the Sacco that the County is ready to partner with them in loans on seeds funds, to economically empower them. She noted that time was ripe for the Society members, to start benefiting from the economic empowerment program in the County.

“Let us make use of all necessary marketing tools to enrol members into the Sacco,” she urged.

“There is a lot to be achieved by the Sacco despite the protocols, to contain the spread of deadly disease,” she noted, whilst urging them to ensure they put measures in place, to contain the spread of the coronavirus with a focus on next year’s plans.

Lengo Sacco, CEO, Mr. William Yaa (left) with the Chairman Mr. Jonathan Kahindi Charo (right) exchange words, during the 2020 SDM, at the Malindi Red Cross Hall, in Malindi in Kilifi County.

Lengo Sacco, Secretary General, Rose Dama Kasiwa (left) reads her statement to the delegates during the 2020 SDM.

Lengo Sacco, Kilifi branch manager, Mr. Eric Safari Baya (left) with the CEO, Mr William Yaa (right) during the 2020 SDM, at the Malindi Red Cross Hall in Malindi, in Kilifi County.

“The Society is above the Kshs 3 million, to qualify as required by the regulatory board,” she pointed out. She added that the fund could be channelled through the Society, whereby members can benefit through engaging in agricultural activities. The Sub County Co-operative officer, Felisther Ziro, asked the Society to take advantage of the scheme, to empower the small and medium size enterprises(SMEs) under their jurisdiction. She further urged the Sacco to focus on the future, adding that the enrolment of members was good, which had gone up with deposits and turnover. In addition, she

Lengo Sacco delegates take a break, during the 2020 SDM in Malindi. DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

LENGO SACCO

SOCIETY LTD

MISSION To mobilize savings among members and provide quality financial products and services to improve their living standards.

• No minimum operating balance. Benefits • Free daily service at one’s business point • One can access loan after 3 months.

VISION To be the leading SACCO in providing quality financial products & services to members.

Tuinuke Pamoja Account United we stand divided we fall. Tuinuke Pamoja Account is specially designed to accommodate those who wish to achieve their goals through collective resources.

PROFILE Lengo Sacco Ltd was started in 1976 and was drawing its membership from the Permanent Employees of the Municipal Council of Malindi, who have now been taken over by the County Government of Kilifi. Since that time Lengo Sacco Ltd has undergone tremendous growth and has opened its common bond to non-employees of Kilifi County Government, we are therefore extending our sincere welcome to the public at large with the vision of growing together. OUR PRODUCTS AND SERVICES I. FRONT OFFICE Jawabu Account An account that answers all your financial questions any time you need cash. Access your money 24/7 with no limit. Requirements • ID photo copy of the applicant. • Passport size photo (take at the branch) Lengo Savings Account An account tailored to embrace those with passion to save. Lengo savings account welcomes your decision to build savings in an easy effective way. Features • Initial deposit – Ksh 500 • Minimum operating balance Ksh 2,000 • Account maintenance – free • Withdrawal restricted to only once a month. Tunza Junior Account Do you want your child to be financially smart? You as the parent hold the key to this dream. Tunza Junior exposes your child to the saving culture making him/ her part of the banking process. Accounts Benefits • A complimentary Education tour for active Tunza Junior annually. • Access to your money once in three months. Features • Initial deposit – Ksh. 300 • Minimum operating balance – Ksh. 1,000 • Monthly account maintenance fee – Nil • Withdrawal charges – Ksh. 100 Requirements • Birth certificate of the child • ID photo copy of the parent / guardian • Passport size photo (taken at the branch) Bakisha Account Designed puporsely for small traders i.e. boda, mama mboga…. Features • Free account opening

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

Features • Initial deposit – free • Minimum operating balance – Ksh. 1,000 • Withdrawal charges – Ksh 100 Requirements • Member’s ID photo copies • One of the members must be an existing member of the Sacco • Passport size photos (taken at the branch) Sherehe (Christmas / Idd / Birthday), Account An account designed to meet the demand of our Christian and Muslim members. Sherehe account allows you to save specifically for these festives. Features • Withdrawals shall strictly be at the beginning of the festive month. • No account maintenance fee • Withdrawal charges – Ksh 100 Mama Jiandae Account This product is designed to allow expectant mothers save and meet their future delivery expenses and the needs of the new born baby. Features/ benefits • No ledger fees • No minimum operating balance. • Allows daily, weekly or monthly deposits. • Withdrawals only at the maturity date • Withdrawal charges – Ksh 100 Corporate Account A business account that allows registered organizations / institutions to cary out their banking in a convenient manner. Features • Initial deposit – Ks. 2,000 • Minimum operating balance – Ksh 2,000 • Ledger fee – Ksk. 100 • Withdrawal charges – Ksh. 100

These are loans extended to registered members after a period of six months. Extended loan amount should be three times the member’s shares. Requirements • Three guarantors and a witness. • ID photocopy of the applicant. • Repayment period up to 48 months. • Interest rate 1.75% on a reducing balance. Development loan top up A facility extended to those already servicing a development loan. Requirements • One should have serviced at least ¾ of his/her current loan. • A 10% penalty will be charged on the remaining balance. • 2% interest rate Smart Loan • Should have a payslip • Should be a member • Amount depends on the basic salary • Interest rate of 1% per month. Somesha Loan This is a special facility designed to all needy students in primary, secondary and college level. Requirements • The fees structure for the whole year (signed and rubber stamped) • The student’s admission letter (stamped) • ID photocopy of the applicant Features • Interest rate is at 1.75% on a reducing balance. • Repayment period: up to 48 months for college and 12 months for primary and secondary level. Okoa loan • Access upto Ksh. 50,000 within 24 hours. • A special facility for the salaried members. Features • Does not consider the 2/3 rule. • Repayment period is upto12 months, • Interest rate is at 2% on reducing balance. Requirements • Recent pay slip • ID photocopy • Three guarantors

Requirements • Copies of registration certificate • Copy of the Company Constitution • Copy of minutes • ID copies of the signatories

Bakisha Loan • Bakisha Account Holders • Access upto Ksh 50,000 • Repayment period up to 6 months. • Interest rate 1.5%.

Advances This is a service tailored for the salaried members of Lengo Sacco (FOSA Shares is a Must)

Emergency Loans • In case of an emergency, you can access a loan from Lengo Sacco.

Special Advance Repayment period: up to five months Interest rate 10% on reducing balance

Requirements • Supporting documents • 3 guarantors and a witness • Repayment period up to12 months • Interest rate 1.75% on a reducing balance.

2. BACK OFFICE Development Loans

Unity & Quality Services

UPDATE FROM PAGE 25 the co-operative identity we know today is the result of participatory, open and democratic processes. On its anniversary, its reflected upon in the light of the enormous global transformations over the last few decades. ‘Looking back for a stronger, brighter future,’ was the first topic which delved into the significant role the co-operative identity plays in today’s world, the importance of adapting to changing needs, and how critical it is to ensure inclusion and diversity remains a priority. Key Highlights from the first online event: • Co-operatives should not only talk about the Co-operative identity and values, the movement must also present examples of how those values can be translated into action; by first integrating other collectives, to become a known model, to avoid missing out on many people. • Education is key in fostering the identity ad co-operatives should utilize technology as a tool to reach many members and educate them about the cooperative model. • Co-operatives should remain cognizant of the role of women in the sector, bridging disparities brought about by gender inequality especially in the governance role. • Co-operatives should stay true to the Co-operative values and principles required involving different cultures, encouraging independent thinking and maintaining independence and autonomy. • Co-operators should encourage young people to participate by following education and tangible actions. They should strive to increase mentorship efforts and make mandatory autonomy and

spaces for real dialogue for the youth. • Co-operators should be flexible and fluid when interpreting the co-operative identity- to reflect the events of recent years and attract new members from outside the movement. • The issues of climate action, digitization and members’ capital should be taken into account by Co-operatives across the board. • The Co-operative identity is necessary to promote our projects and position ourselves in a world full of challenges, uncertainties and problems that

Co-operatives are also based on the ethical values of self-help, selfresponsibility, democracy, equality, equity and solidarity. must be solved urgently. The pandemic has highlighted and accentuated these conditions, both expressions of solidarity and conflicts and inequalities. • By co-operating we can overcome the enormous health, economic and social crisis. One billion members from three million cooperatives around the world are betting on the co-operative model at this moment. Key Insights from the second online event During the second event, panelists

explored the impact of the Statement on regulation and legislation, with a focus on the ILO Recommendation 193 on the Promotion of Cooperatives in 2002. The identity statement is a fundamental source of legislation and regulation because it’s a set of operational standards which could also help legislators differentiate between various types of co-operatives. “The ILO Recommendation helped to change the perception of co-operatives and is still a very modern document. It contributed to the revival of cooperative ideas throughout the UN system” said Hagen Henry, former ILO Co-op Chief and Adjunct Professor of comparative law at the University of Helsinki. Panelists also emphasized to the need to put cooperatives on education curricula in schools and universities around the world. Today the world is seeing the cooperative identity in action, its scope and its potential. Co-operative values and principles are expressed in each territory, with the complexities of each scenario, where we have to intervene. Co-operative Identity can help solve some of the global issues we are facing such as the 2020 pandemic. The values within the statement on the cooperative identity, particularly those of self-help and self-responsibility, not only in taking care of ourselves but also the solutions such as the social distance guidelines. The Co-operative identity must be a mirror where we can look at ourselves, and an invitation to act with more solidarity every day, in a more responsible and sustainable way. “As we lead up to the 2021 World Co-operative Congress in Seoul, we can continue to have this dialogue and it needs to reach beyond the formal structure of the ICA,” added Martin Lowery.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

LEASING

Metro Trans PSV Sacco Celebrates the Kshs 238 Leasing

Deal Between Isuzu and the Co-operative Bank By Malachi Motano

etro Trans Public Service Vehicle (PSV) Sacco becomes a beneficiary of the leasing deal between Isuzu East Africa and Cooperative bank; after it received 45 Isuzu NQR 33-seater buses worth Kshs 238 million from the leading commercial vehicle assembler in Kenya. This is part of the one hundred 33-seater Isuzu buses availed to the PSV sector, three months ago in an asset financing deal with the Co-operative Bank where no deposit is required. The buses which sell for Kshs 5.3 million each are the largest fleet delivery, that Isuzu has managed to put together for the PSV sector in one deal. The lease agreement is expected to support growth and the return to business for PSV operators, who had been severely affected by the recent Covid-19 lockdown and travel restrictions.

The buses were leased to Metrotrans Sacco in the Ksh225 million deal with Co-Op Bank and Isuzu East Africa

Speaking at the hand-over ceremony for the first 45 buses to Metro Trans PSV Sacco, the Managing Director Isuzu East Africa, Rita Kavashe said that the initiative was prompted by the need to support the economic recovery measures. “The country has been experiencing an economic slowdown, caused by the outbreak of the Covid-19 pandemic. Public transportation is among the sectors which were hardest hit by the pandemic. To mitigate this, we have through one of our dealers Central Farmers Garage (CFG) already manufactured 25 vehicles under this leasing deal from Cooperative Bank. Today we are delivering 45 more buses as part of the target 100 buses valued at Kshs 530million,” she noted. The lease agreement’s main advantage

is that PSV operators, do not need to pay a deposit to get a vehicle into their fleets. This makes access to new vehicles easier for operators, emerging from the economic impact of the pandemic. The deal to the PSV Saccos, offers an affordable and flexible hire to use as and when needed, vehicle ownership model. Rita further explained that the transaction was a good demonstration of local companies coming together, to support locally manufactured products. “This is yet another classic example of how the Buy Kenya, Build Kenya initiative can support our economy,” she added. On his part, Edward Mutuaruhiu representing Co-operatives Banking Division,

The deal to the PSV Saccos, offers an affordable and flexible hire to use, as and when, needed vehicle ownership model.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

said that the lease arrangement had given PSV customers an opportunity to grow their business and create jobs at the same time. “This is a cost-effective way for PSV Saccos to gain access to new vehicles and then pay monthly or quarterly instalments, towards the cost of the vehicle as it continues to generate revenues for them. In the process, 90 jobs have been created today for the 45 buses,” he explained. While receiving the buses, Oscar Rosana CEO and Chairman of Metro Trans PSV Sacco was elated by the leasing transaction. “We are delighted with the payment terms from Co-operative Bank, and are optimistic these new Isuzu buses, will boost our growth plans for the Sacco,” he said. Isuzu EA is the largest local assembler of commercial vehicles, with 44.5% market share of new vehicles sold in the country. Cooperative Bank is ranked fifth in the banking sector, having created a niche in the SME sector. Cooperatives with an extensive client base, find the leasing deal as an agreeable development.

MAGEREZA SACCO Maximum loan is Ksh. 100,000/= Repayment period 72 months Minimum deposit is Ksh. 250,000/= Interest rate 1.25% p.m C(15% p.a) on amortization Monthly deposit will be 10% of basic salary granted at 4 times members deposits

Maximum loan is Ksh. 500,000/= Repayment period 48 months Interest rate 1.25% p.m Salary must be processed through fosa Loan granted for newly recruited members within 6 months of joining the sacco

Karibu Loan

P.O. BOX 53131-00200 Mobile No: 0716-315-155 , 0718 224 956 FAX; 318456, NAIROBI MAGESO CHAMBERS, MOI AVENUE Email: magereza@maqerezasacco.coop DECEMBER 2020 - JANUARY 2021 | SACCO TIMES 31 WEBSITE: www.magarezasacco.coop

EXCELLENCE

Magereza Sacco Leads in Conducting Countrywide Member Education Drive By June Njoroge

This is at PSTC final phase of education

success of the Sacco.

he giant Magereza Sacco continues to shine in 2020 on multiple fronts, having recently conducted an exclusive countrywide member education drive; despite the Covid-19 global pandemic, which covered well over 108 stations across Kenya. The education drive was carried out in three phases and was facilitated by a dedicated team of delegates, the directorate, executive management and honorable members.

Mr.N.K. Maswai and Mr. Raymond Kimani, together with the Deputy FOSA Manager, Madam Milkha Ongoncho and Branch Manager, Mr. Edwin Lagat, pose for a photo with the officer in charge of Kibos Maximum Prison after a successful session.

It was geared towards ushering in the launch of the Sacco’s two new products: the ‘Golden loan’ and ‘Karibu loan.’ In addition, it was to inform and educate both members and non-members on reasons why they need to save, invest and grow in the acclaimed Sacco. This is in line with the 5th Co-operative principle on Education, Training and Information, for empowerment in making informed choices; in cognizance that an enlightened member is a better investor, in order for members to contribute effectively to the

The Sacco has also embraced technology at full tilt, especially in the wake of the pandemic to curb the spread of the coronavirus. The Sacco has an agile mobile banking platform dubbed ‘Cloud –Pesa,’ which enables members to conveniently access products and services offered by the Sacco, through their mobile devices. From making withdrawals and deposits, repaying both FOSA and BOSA loans, balance inquiries, ministatement requests and so much more; members can access these services by dialling the USSD code *850#. There are a myriad reasons to join Magereza Sacco; from high interest rates on deposits, good dividends on shares, a strong burial benevolent fund for members and spouses, low interest on loans, access to insurance products and services, fast financing and building on cash reserves. The Sacco also boasts a robust Customer Care Center, to respond to any queries or complaints from

Board member in credit committee, Mr. Samuel Thirata, accompanied by the finance manager Madam Grace Nyambega, address the turn out.

Honorable Secretary, Mr.B. Galgalo, accompanied by Secretary Credit Committee, Mr. Nuni K. Chemno and member of staff Alex Mbithi joined by the officer in charge and Magereza members.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

Embu Prisons, address by the Chairman of the Supervisory Committee, Mr. Evans Madisi, accompanied by Vice Chairman, Mr. J.K. Too and Officers in Charge.

EXCELLENCE

A section of directors and senior staff ready to address turn out at PSTC. Magereza Sacco member education drive at Nyeri Prison. members. Additionally, the executive management has opened direct communication to departments by providing office lines that are open to all members; ensuring they are assisted more conveniently whilst strengthening their branch operations. Members can also be sure that their funds are safe, because the Sacco highly values security and privacy, having already implemented proper cyber security procedures in place. The renowned Sacco operates on key core values of integrity, teamwork, professionalism, equality and equity, social responsibility, innovation and creativity; with the chief aim of providing financial services through mobilization of savings and advancing credit that improves the livelihoods of their members. The Sacco has remained true to their mission, of offering affordable and customized products and services that economically and socially empower members; which has led them to become one of the leading Saccos in the provision of excellent financial services. Corporate Social responsibility is at the heart of the Sacco, which regularly participates in welfare and charity activities; striving to continually improve the living standards of people in the community in terms of health, education and the environment.

In the wake of the Covid-19 Pandemic, the Sacco donated 15,000 face masks to Kenya Prisons, to curb the spread of the coronavirus. Corporate governance is also of paramount importance to Sacco; whereby delegates elect Board of Directors and the Supervisory Committee, who run and oversee the Sacco on behalf of members. As such, the Annual Delegates Meeting (ADM) is the supreme governing authority of the Sacco.

Mr. Patrick Aranduh, accompanied by the Chairperson of the Supervisory committee, Madam Florence Kahariri.

Established in 1971 by a section of Prisons Officers stationed at Shimo la Tewa prison, membership continues to be drawn from the Ministry of Interior and Coordination of National Government Magereza Sacco C.E.O, Mr. Augustine Mutisya, –Prison department, conducting an address to members, during the other government 2020 Education Drive. ministries, parastatals with salaries check licensed and accredited corporation off system, spouses and children of by the Sacco Societies Regulatory serving and retired members. Authority (SASRA), as one of the leading deposits taking Saccos in the The Sacco has recorded exponential country. growth over the years, with 2020 seeing a migration into a high grade Parting Shot:” We should continue system, the acquisition of an into patronize the Sacco, for optimal house ATM card machine, less lead growth of the organization; define time for payments of loans in history, what you want to achieve and a fervent delegate system, great within what period.” Mr. Augustine financial returns among many other Mutisya, CEO, Magereza Sacco. milestones. The Sacco remains a DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

UPDATE for the promotion of gender equality and empowerment of all women in the sector.

2020 World Savings Day: Key Insights for Saccos. By June Njoroge

“

When you save a bit, big things follow” was the 2020 theme for World Savings day, celebrated globally on the 31st of October. Its an awareness day to call attention to the importance of savings as a way to reduce poverty, promote financial literacy, educate people about saving and managing their finances. On this day a variety of activities and campaigns are conducted to advocate for financial education whilst encouraging people, to share their savings stories to create awareness on the topic and inspire others. Saving in an uncertain time in the backdrop of a pandemic, the topic of saving and managing finances bears paramount importance and could not be more timely. Kenya celebrated an entire week spearheaded by the African Confederation of Co-operative Savings and Credit Associations (ACCOSCA), in partnership with Sparkassenstiftung Eastern Africa and the Association for Micro-Finance Institutions (AMFI –Kenya). During the week a series of webinars were held to discuss critical issues to promote

a sustainable savings culture, with different financial institutions at the helm. Sacco Times Magazine identified takeaway points pertinent to Savings and Credit Co-operative Societies (SACCOS). The week kicked off with a powerful discussion on “Savings and Financial Inclusion-An Assessment of Savings Opportunities in Financial institutions. Saccos should ensure they have tailor-made products for their diverse membership from the youth to retirees; bridging disparities based on gender or demographic. Saccos must ensure they embrace diversity, equity and inclusion, not only in membership but also in governance. The second webinar delved into Sustainable Savings Promotion in Kenya- Reimagining Past Savings Products, the Present and the Future” with keynote guest speakers such as the Police Sacco Chairman, Mr. David Mategwa. Saccos were urged to take advantage of the age of digital disruption and depart from the past analogue mode of delivering products and services to members. A strong emphasis for Saccos to adopt technology for efficiency and convenience to their members; as the future of the sector in line with challenge 2025, set by the World Council of Credit Unions (WOCCU) to digitalize the global co-operative movement. Day three explored the topic of harnessing Savings Group Empowerment to increase Formal Financial Access among women in Saccos and the MicroFinance Sector based on the theme of women empowerment. Co-operative societies should adopt gender inclusion, strengthen sound policies and enforceable legislation,

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

Being financial institutions, Saccos should work towards designing financial products and services specifically tailored towards women. Implementing new legal frameworks and undertaking regarding female representation in co-operative societies, will greatly aid the sector to achieve gender inclusion, effective participation and equal opportunities for leadership at all levels. This is sure to fuel sustainable economies and benefit credit societies. The penultimate of the 2020 World Savings Week highlighted the importance of savings promotion among the youth and how Saccos and the microfinance sector in Kenya can sustainably include them. There is a critical need to get the co-operative model to be understood by the younger generation. A study conducted by the Sacco Society Regulatory Authority (SASRA) in 2019, debunked the misconception that Sacco membership has no place for the youth. The report revealed that the youth comprised of a third of the total 4.97 million Sacco members, across the 174 Deposit –Taking (DT) Saccos. Saccos need to design more products that appeal to the youth. These tailor-made products need to address the needs and challenges facing the youth of today; to somewhat offer them solutions which will consequently lure them into joining. Millennials and Social media have become synonymous in this digital age we are in, making for a key catchment area for Saccos to recruit more youth. Marketing dynamics have shifted and evolved and Saccos should also move with the changing tide.

CSR

SACCO TIMES DOMINOES

So you say you are a part of the grand Co-operative movement, but how deep does your knowledge go, in matters pertinent to the sector? See if you can hack this Trivia Challenge, we prepared for you: 1. When was the first Co-operative established in Kenya? 2. Name the 5th Co-operative principle. 3. What do we call the court that hears and settles Co-operative disputes? 4. Are Saccos authorized subscribers of credit data to CRBs? 5. Who is the Commissioner for Co-operatives? 6. What do we call the rules and regulations that govern a Sacco? 7. What was the theme for the 2020 International day of co-operatives? 8. Which body was established under SASRA to tackle corruption in Co-operatives? 9. The global digitalization initiative by WOCCU is called? 10. Mention 2 Co-operative partners, to the KMRC affordable housing agenda. 11. Which Sacco scooped the “Best National Long and Short Term Financial Lender” award by the Global Credit Rating Company, for the second year in a row? 12. Name 2 African countries feted by WOCCU, in the 2020 Membership Growth Awards.

Answers 1. 1908 2. Education, Training &Information 3. Co-operative Tribunal 4. Yes. 5. Mr. Geoffrey Njang’ombe 6. By-laws 7. Co-ops for Climate Action 8. Sacco Societies Fraud Investigations Unit (SSFIU) 9. Challenge 2025 10. Harambee Sacco, Ukulima Sacco 11. Kenya Police Sacco. 12. Kenya & Ghana. The Answer to the Riddle in our previous October/November Issue is: SECRET

#Sacco Times Magazine Brain teasers. #Keep safe and edutained.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

TESTIMONIAL

Mentor Sacco Members Count their Blessings One by One Maina’s confessions to Mentor Sacco loan officers, every time she went to request for a loan. Jane Maina joined Mentor Sacco exactly two decades ago upon getting into employment, thanks to her teacher colleagues at Mbiri primary school in Murang’a County, who were already members. However, she was not able to use banking services since she could not raise the minimum deposit, that was a requirement of the bank. “I am a teacher by profession and have been a member of Mentor Sacco since 1990, a year after I got employed by the Teachers Service Commission (TSC). However, my salary could not meet Kshs 10,000 minimum deposit which was a mandatory requirement by commercial banks. My colleagues who were already members of Mentor Sacco, told me that it would add value to my life,” she stated. She joined the Sacco and after six months, borrowed some money to pay her fees at the university. “I had joined Kenyatta University but did not have money at that time, so I borrowed Kshs 40,000 to pay for my school fees,” she says. Committed to give the best education to her children, Jane wanted to transfer her two boys to a private school, but did not have enough money. In addition, she had not fully serviced the first loan. Luckily, Mentor Sacco had a top up product that enabled her to take another loan to complete the previous one and remained with some money, for other projects which she equally enjoyed. “I was moving my children from public school to a very expensive school called Technology school, where admission fee only was around ten thousand. I had to buy uniform and make sure they had enough books, as per school requirements. So I topped up with Kshs 16,000 that was around 1992 and it was a lot of money then,” says Jane. Having done special needs in education at the University, she didn’t go back to the primary school upon her graduation, instead she was transferred to Our lady of Mercy Centre in Nairobi to work at the resource center. By Malachi Motano

“

I know I have a very big loan to service and clear, but among the many loan products you have, just find something little for me. I don’t have anywhere else to go, just do your mathematics and find something small for me. I have children who need fees. I don’t even have fare to go to work and I can’t afford to pay my house rent.” the above were Jane

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

“I did not have the money to move with my family to Nairobi. I could not pay rent which was then only Kshs 2,000. Mentor Sacco had an emergency loan product which I borrowed. That is why I praise Mentor, it listens to individual needs. I would tell them that I was aware I had pending loans but since I had no other choice, I would ask them to consider me, which they did.’ she says. After settling in Nairobi and understanding the trends of the city, Jane wanted to put up a permanent residence. However, her savings and investments were not enough to help her secure a piece of land in the city,

TESTIMONIAL she was left with only one optiongoing back to Mentor Sacco.

young one is at Catholic university,” she says.

“I sold a plot which I had bought in Murang’a and bought a plot in Nairobi. Mentor Sacco gave me Kshs. 300,000. I only managed to do the foundation with the money. After another two years, I went back to the Sacco and since I had sold another plot bought together with family members and deposited some money at the Sacco, my shares were good. So they gave me another Kshs 600,000.”

In 2017, she borrowed Kshs. 2 million to buy a big car. “Currently I have a big loan of Kshs 3.6 million to see the successful establishment of Plateau Lounge and restaurant, a business which I partnered with six other like-minded individuals, grow to fruition. I have never stayed without loans since I joined Mentor Sacco. After I won their confidence nowadays I ask for a loan, they simply tell me to walk into any branch around me like in Nairobi or Thika. Getting guarantors is not a problem, because I have recruited many teachers into the Sacco so I can always get a loan.” she says.

Her house was not yet complete and had to go for more top-ups at Mentor Sacco. “I remember I didn’t have iron sheets so I went back to the Sacco and asked for another loan, to complete my house. I was given Kshs 70, 000 to buy the iron sheets. Today I am a proud owner of a house in Mimbley estate in Ruiru, courtesy of Mentor Sacco,” she proudly declares. By 2014, Jane had become a Curriculum Support Officer. Her work involved visiting different schools to assess teachers. She started admiring her colleagues, who would visit different schools driving and could not withstand her situation. “I went back to Mentor and asked for a loan to buy a small car to avoid compromising my work. The Sacco gave me a top up of Kshs. 300,000 to complete the previous Kshs. 600,000, I had taken to build and then enabled me to buy a small car. That is how I got my first car,” she says.

“I have been selling used motor vehicle spare parts for a long time along Kirinyaga road, before coming to Ngara about five years ago where I joined Mentor Sacco. I knew the Sacco’s former Chairman, who introduced me to the branch in Ngara. After learning of their good products and services I joined, became a member and started saving with the Sacco.” He noted. Daniel saved with Mentor Sacco for only six months but qualified for a big first loan. “After the six months I got my first loan of Kshs 2 million. My loan uptake journey with Mentor Sacco did not stop there. I got another loan of Kshs 5 million, which I have been topping up and am currently servicing a total of 10 million.” he says. The businessman, has also introduced some of his colleagues who have joined the Sacco.

On giving back to the Sacco, Jane has won many savers. “I have introduced many to the Sacco, including my first born. Recently, we had a teachers meeting where I shared how the Sacco has helped me and very many teachers joined the Sacco, courtesy of my talk. At one point I had gone to Dubai and gotten stuck, despite of having my Visa card. I called the branch manager in Murang’a and told him I needed money and he was able to assist me.” She added. Like Jane, Daniel Mwangi, is another beneficiary albeit being fairly new. He has been a member of Mentor Sacco for only five years, but is a big beneficiary nonetheless.

By 2015, Jane had a house and a car but her children were still learning, so needed more money. “Because my two sons were going for university education, I went back to the Sacco to take more emergency loans to pay their fees. I developed a culture where I would borrow a FOSA loan to re-pay the emergency loan I took earlier, then borrow an emergency loan to repay FOSA and the trend continued. My first born completed his studies at Strathmore University, while the DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

CO-OP TRADE

African Continental Free Trade Area:

Co-operatives Fostering Implementation By June Njoroge In addition, it was meant to share knowledge that enables Co-operatives and other stakeholders in Africa; to engage effectively in advocacy and policy dialogue mechanisms to support the negotiations and subsequent implementation of AfCFTA.

he African Continental Free Trade Area (AfCFTA) is a game changer in the African regional and international trade; projected upon completion to become the largest free trade area in the world, since the establishment of the World Trade Organization (WTO). The Co-operative business model was highlighted as instrumental and an invaluable conduit in the fulfilment of this endeavor, with African Co-operatives identified as key vehicles in the successful realization of this new economic path for the continent. AfCFTA creates a single continental market for goods and services as well as Customs Union, with free movement of capital and business persons unleashing great potentials and opportunities which include, reduction in tariffs, better co-ordination within the supply and demand chains, improvement of agricultural value chains among many more. The estimated value of Co-op to Co-op trade in 2013 was US$ 10 billion (ICA 2015). The Dalberg (WTO, 2015) analysis shows that the opportunity for Co-op to Coop trade could increase to US$13 billion and realistically achievable to US$18 billion. The International Co-operative Alliance Africa (ICA-Africa) held an online regional conference in mid-October on â&#x20AC;&#x2DC;Fostering

The regional Director of ICA Africa, Dr. Sifa Chiyoge, shed light on the interface between AfCFTA and how African cooperatives can leverage and engage in intra-African trade.

Implementation of the African Continental Free Trade Area through Co-operatives,â&#x20AC;&#x2122; with key government officials, Co-operative leaders, partners and other stakeholders. The conference was aimed at identifying potential synergies, issues, opportunities and benefits for African Co-operatives, emanating from the implementation of AfCFTA; spurring and reengineering co-operative organizations in Africa to engage in Co-op to Co-op trade; enhancing Co-operative network and building the Cooperative ecosystem for intra-trade through AfCFTA; identifying the importance of leveraging on technology to enhance Co-op to Co-op trade in Africa.

...the World Bank notes that the agreement could add $76 billion in income to the rest of the world.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

ILO Co-op was a chief participant and the manager Ms Simel Esim, highlighted findings from an ILO assessment, on the potential of co-operatives in the SADC region to engage in imports and exports, with a focus on the agricultural sector. She noted that trade was deeply connected to Co-operative development, underlining how co-operative development programmes can be integral in unlocking the potential of Cooperatives; towards becoming better integrated into global supply chains. She further noted that cooperative to co-operative trade, can be a socially innovative model toward more inclusive, transparent and sustainable global supply chains, aligned with SDG 12 on sustainable consumption and production. She pointed out that during COVID-19 pandemic, shortening supply chains by establishing direct purchasing

CO-OP TRADE lines between producer and consumer co-operatives, can help reduce the risk of inflated food prices and improve food security of local communities. Key Benefits of AfCFTA to Cooperatives: • Increase in the economies of scale and access to cheaper raw materials and intermediate inputs. • Better conditions for regional value chains and integration into global value chains. • Catalyzing the transformation of African economies towards greater utilization of technology and knowledge. • Facilitating both intraAfrican and external direct capital flows to African countries • Creating a labour market and a demand pull throughout the continent. Governments were called upon to go beyond the usual policy making and develop strategies for implementation of policies; creating a conducive environment and enact enabling policies to support small to medium-

sized enterprises(SMEs) and Co-operatives, as they form the majority of the African economies. Co-operation among Cooperatives is also essential as it will contribute to the full realization of the AfCFTA. Albeit delayed by the Covid-19 pandemic, the implementation of AfCFTA, is set to begin anew in January 2021, with a focus first on easing trade for SMEs, which account for 90% of jobs created on the continent. According to the United Nations Economic Commission for Africa, AfCFTA will cover a market of more than 1.2 billion people and up to $3 trillion in combined GDP, when it comes to effect, with the potential to increase intra-African trade by over 50%. In reiteration, the World Bank notes that the agreement could add $76 billion in income to the rest of the world. During the 12th ICAAfrica African Ministerial Co-operative Conference (AMCCO) held in AbujaNigeria in October 2018; the

Ministers responsible for cooperative development in Africa, committed to continue with the promotion of the Cooperative business model, to foster economic growth in Africa. In order to ensure that Cooperatives can benefit, its crucial for the movement to understand what the AfCFTA future negotiations will cover. They should also ensure their voice is heard, as governments craft and operationalize the agreement. The 2019 issue of the World Cooperative monitor, published by the ICA and Euricse, paints a picture of the scale and strength, of the global cooperative movement. The Economic Commission for Africa (UNECA) suggests that AfCFTA, has the potential to boost intra-African trade by 52.3% by eliminating import duties and to double this trade, if non-tariff barriers are also reduced. Headquartered in Accra, Ghana, the AfCFTA Secretariat, is expected to lead the initiative and implementation of the agreement’s aspirations through strategic collaborations, stakeholders’ engagement and resource mobilization, as Africans move towards achieving Agenda 2063 of the Africa we want. The AfCFTA will boost intraAfrican trade by providing a more comprehensive and mutually beneficial trade agreement among member states; covering trade in goods, services, investment, intellectual property rights and competitive policies.

President Uhuru Kenyatta signs advocating for AfCFTA at the launch in 2018. DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

TECHNOLOGY are encouraged to make data analytics central to their growth plans because the traditional selling points are slowly being eroded by emerging competitors. Knowledge is power, and data provides that knowledge; hence the need for Co-operatives to leverage data as a competitive advantage. To compete effectively, Saccos need to use data to understand their customers on a personal level so that they can develop digital products that meet their needs.

Hon. Peter Munya, CS, Trade, Industry & Co-operatives.

Fraud Mitigation: Saccos to Deploy Data Analytics By June Njoroge

he digital wave that has swept across the Cooperative movement to address membersâ&#x20AC;&#x2122; needs more efficiently and conveniently, has exposed the gaping vulnerability in the sector, as the cases of fraud and money laundering have become ever so rampant. In light of this, Deposit Taking Savings and Credit Co-operative Societies (SACCOS) have been advised by the State Department of Co-operatives to adopt a strong anti-fraud stance in order to protect member funds. The Sacco Societies Fraud Investigation Unit (SSFIU) is already operational, initiated to curb the cases of fraud and corruption in Co-operatives, by the Sacco Societies Regulatory

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

Authority (SASRA), Directorate of Criminal Investigations (DCI) and the Ethics and Anti-Corruption Commission (EACC). This was followed by a Presidential directive in July for the unit to be set up. The Co-operatives Cabinet Secretary Peter Munya, has been spearheading the initiative to curb fraudulent dealings in Kenyaâ&#x20AC;&#x2122;s Co-operative sector. Among the measures adopted by Co-operatives to mitigate fraud is forensic data analytics which aids in fraud detection and prevention. Its basically a combination of technology and analytical techniques with human interaction; to help in detecting instances of fraud, corruption, abuse and other forms of noncompliance either before or after a transaction. Saccos

If Saccos continue to maintain data in traditional data warehouses, they cannot be able to solve emerging problems, because the structured data model, lacks flexibility to adapt new business challenges. Co-operatives need to make informed decisions to help meet the emerging needs of their membership. Data analytics can also help identify hidden opportunities, accelerate member engagement, prioritize offers, influence digital adoption and identify at-risk members. In a global survey, 40,000 certified fraud examiners revealed that proactive data monitoring and analysis is an invaluable addition to an organization to limit potential financial and reputational losses from fraud. Data analysis uncovers hidden patterns and insights which enhances understanding of customers and the products they need. Some Saccos utilize data lakes, which are vast pools of raw unstructured data, which complements a data warehouse. This allows the Sacco to use their data to identify and solve any business problem, because they are flexible and extendable. Data analytics enhances the ability to identify trends, forecast outcomes

TECHNOLOGY and prescribe solutions. The fundamental function of data analytics is to aggregate and distribute data so that Saccos can get a clearer perspective of the members they are serving, their needs and expectations; so that they can formulate a roadmap or blueprint on how to meet this needs to elicit customer satisfaction thereby, standing a big chance in retaining them. Big data analysis and video analytics, allow Co-operatives to investigate threats in a more intelligent manner and generate actionable intelligence from collected data points to achieve their strategic intelligence and business objectives. Saccos should adopt a sophisticated approach to data analytics and governance, by adopting a data strategy that answers basic business questions by first defining their objective. The data analytics journey comprises of the below steps to be effective: Steps for Co-operative Data Analytics Journey 1. Statement of Objective and Strategic Planning This is the brainstorming stage; what problem/issue does the Sacco want to address? How to reward the most valuable members?

A successful Sacco analytics program is dependent on the right tools; capable hardware and supporting systems and an effective software. 2. Analytics Platform Implementation This is where Saccos need to assemble their teams, infrastructure, ascertaining that all the software, hardware and key players are in place. 3. Analytics adoption and penetration. This stage is about getting actionable data to your business users. 4. Management and Control measures. This stage is about metrics; can you measure the impact? Calculate ROI? Does your solution work?

A successful Sacco analytics program is dependent on the right tools; capable hardware and supporting systems and an effective software. The latter will determine how the Sacco stores data? How to move, transfer, integrate and report that data. This calls for robust tools to maintain data safety, quality, accessibility and motility. Analytics are the missing piece to bridge the divide of security and risk in Saccos. Data analytics is broken down into four basic types. 1. Descriptive analytics describes what has happened over a given period of time. Has the Sacco increased membership in a given year? Are deposits growing more this month than last month? 2. Diagnostic analytics focuses more on why something happened. This involves more diverse data inputs and a bit of hypothesizing. Did the latest education drive bring new members on board? Has the Covid-19 pandemic affected the asset base? 3. Predictive analytics moves to what is likely going to happen in the near term. For instance, if the Sacco conducts a back to school promotion in January, its likely to be more successful than conducting it in March or April. 4. Prescriptive analytics suggests a course of action. For instance, if a Sacco is to embark on an online education campaign; it should first ensure it has a digital platform, channels and an adequate if not large following. By mitigating fraud risks, Saccos increase member confidence which is key because members fuel the institutions.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

OPINION

Saccos Diversify from the ‘Rich’ Pool of Traditional

Savers, to the Low-Income Boda Boda Riders By Malachi Motano

he motorcycles (Boda boda), tricycle (Tuktuk) industry, is increasingly attracting many young people by offering a rich pool of daily income earners; that resonates well with the Savings and Credit Cooperative Societies (Saccos) movement model. As a result of being seen as the fastest growing income group, many Saccos just like other financial institutions like banks and microfinance companies; are developing loan products targeted at them especially for the Saccos based at the counties, that are working hard to increase membership to strengthen their deposit base. “Many Saccos are diversifying from the rich pool of traditional members like teachers, to boda bodas since that is where the money is. Unfortunately, they live in a situation where they are not very much informed. They make a lot of money but saving is not a culture in their lives,” says Kwetu Sacco CEO, Stanley Kyelenzi.

Bodaboda operators at the launch of Imarika Sacco in Mtwapa.

According to him, Saccos are therefore reaching out to such groups with education on savings and also developing products for them, that can help improve their lives as well as their businesses.

importation of motorcycles for commercial use, employing thousands of youth. The Saccos are now helping such youth to form small chamas, just as is the case with the women groups.

“At Kwetu Sacco we are helping them to adopt a savings culture. Covid-19 has taught us a lesson that working and living for a day is not sustainable, “Kyelenzi says. The upsurge of bodaboda riders in Kenya reached its peak when former President Mwai Kibaki, zero-rated tax on importation of motorcycles. There was increased

However, while some Saccos see bodabodas as a high-risk pool of members, some of the riders have been bold enough to form their own co-operative societies; as the case with Murang’a based Kabati Flyover Operators Sacco that brings together over 87 riders. Their members save at least Kshs 500 a week, the entity has grown a pool within which members can borrow for their own development and also earn dividends.

...The challenge with bodabodas, is that they don’t have time, during the day and so, we are using mobile tools, to allow them to save and also access information, about our products.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

The same members also contribute Kshs 200 per month, as a form of insurance to its members and immediate family members in case of accidents or illness. Other than Kabati Flyover Operators Sacco, another entity is Nanyuki Bodaboda Savings and Credit Society (Nabosa) which began in 2009, where members

OPINION were only saving Kshs 50 a day. Today their Sacco has a Kshs 100 million housing project, partly funded by the National Co-operative Housing Union. Such examples of success, have attracted Saccos to go after bodaboda groups with targeted products. A number of Saccos are seeing it as an opportunity to win new members and grow the deposit base, which is used for financing loans to members. This comes at a time when the Sacco movement deposits have grown at the slowest pace, in seven years amid rising appetite for loans. Data from SASRA indicates that deposits grew at 11.27 per cent, to Kshs 380.44 billion last year up from Kshs 341.91 billion in the previous year. However, the concern remains on deposits that are getting more concentrated, in the hands of a few big Saccos. According to the data the top 20 deposit taking (DT) Saccos controlled combined deposits of Sh224.75 billion last year, being more than half (59.08 percent) of the Sh380.44 billion total deposits held by the 172 DT-Saccos. Kenya Highlands Sacco Chief

Executive Alice Kosgei, says the Sacco is also eyeing youth groups, such as bodabodas alongside women chamas. Saving and business management skills are seen by Saccos as the key bridge in transforming youth and women groups, into loanable members with lower risk of defaulting. At Kwetu Sacco the management came up with a department called microcredit, to target the groups that it equips with skills. Under the product bodaboda groups are trained together with women chamas, that want to start businesses such as catering facilities and are given loans,

NABOSA housing project site

Kabati Flyover Operators Sacco vice chairman George Mungai during the Sacco’s annual general meeting.

to buy assets such as tents and chairs. Imarika Sacco is also working with bodabodas, through targeted products to fit their needs. “We have products targeted at bodaboda riders. For instance, the Sacco has agreements with dealers who supply motorbikes, then we facilitate the payments through those agreements. However, the busy schedules for bodaboda riders, is posing a challenge when it comes to training.” says Sacco chief executive Mr. Daniel Masha. He says many of the riders hardly find time to attend training on crucial topics such as savings, given that most of them are busy throughout the day. The only advantage, Mr. Masha says is use of technology that pass information to them, as well as giving them room to save without having to physically visit branches. “The challenge with bodabodas is that they don’t have time during the day and so, we are using mobile devices to allow them to save and also access information about our products,” says Mr. Masha. The Sacco sub-sector Demographic Study Report of 2019 revealed that DT-Saccos, alone had about 190,000 nonnatural members such as selfhelp groups, like women chamas.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

BRIEFING ROOM

Sacco News Round up Compiled by June Njoroge & Malachi Motano

Wananchi Sacco Feted in the 2020 Taxpayers Awards

ananchi Sacco was feted by KRA in a virtual ceremony hosted by the President as the Top Player in Central Region.

Kenya Police Sacco Opens New Branch Kenya Police Sacco has opened a FOSA branch office in Eldoret, in a bid to take services closer to members.

Tower Sacco members mourn the demise of their Vice Chairperson Members of Tower Sacco were left in utter grief after their Vice Chairperson, Mr. Benson Chege Ruhangâ&#x20AC;&#x2122;a, passed away while undergoing treatment at Nakuru War Memorial Hospital on 1st of November 2020.He was also the head teacher at Gituru Primary School in Naivasha and contributed immensely to the growth of Tower Sacco, with over 42 years of experience in Sacco matters. He will be remembered for assisting the Sacco in attaining numerous achievements most notably being the most improved and fastest growing Sacco nationally in 2017; when the Sacco emerged at the top and being rated, as the overall best Sacco, in Nyandarua County, with FOSA products during the International Co-operative Day. He also assisted with the expansion of the Sacco, by setting up branches in 5 counties which include; Nyandarua, Nakuru, Laikipia, Samburu and a marketing office at Mtwapa in Kilifi; with smaller satellites offices in the interior parts of Nyandarua County. The late was laid to rest on November 5, in his home in Githabai village in Wanjohi Nyandarua County.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

SASRA Holds Stakeholder Validation Meeting The Sacco Societies Regulatory Authority (SASRA), held a stakeholder validation meeting, engaging its primary stakeholders, on the proposed policy and legal framework for central liquidity and shared services, coupled with other government instruments.

Mombasa Port Sacco Conducts CSR Mombasa Port Sacco, engaged in Corporate Social Responsibility (CSR), giving a generous donation of desks to the Sacred Heart Primary School in Ganjoni.

Amica Sacco Holds ADM and Launch its 2021 Budget Amica Sacco held its ADM and launched its 2021 budget, amid the Covid-19 Pandemic; after previously launching its 20202022 strategic plan.

Ufanisi Sacco Holds 47TH AGM via a Virtual Link. Ufanisi Sacco sets pace in holding its 47th AGM, via a virtual link, with a keen observance on the precautionary measures set by the Ministry of Health to curb the Covid-19 pandemic.

BRIEFING ROOM

Sacco leader becomes KNBS Director General Hazina Sacco Vice Chairperson Macdonald George Obudho will now assume the highest office at the Kenya National Bureau of statistics (KNBS) as the new Director General (DG). He succeeds Zachary Mwangi and is expected to lead the bureau for the next 8 years. Holding Master of Science Degree in Statistics and Bachelor of Science in Mathematics and Computer Science from the Jomo Kenyatta University of Agriculture and Technology (JKUAT) has been working at the Bureau since 1995, rising through the ranks from Statician to the current position of Director General. According to KNBS in a statement, Obudho has vast experience in conducting population and housing census’ including the first ever Kenyan digital census conducted in 2019.The statement reads “He has competency in designing and carrying out statistical sample surveys and compilation of official statistics. He has successfully spearheaded many surveys in the areas of demography and social statistics” He was honored with a State Award, The Moran of the Order of the Burning Spear (MBS). His experience in top management spans over 13 years and gives him a rich administrative and technical experience.

Kenyan Saccos Access Credit to Plant Trees for Environmental Conservation

The Global Women Leadership Network Kenyan Chapter Celebrated its 2nd year The Network celebrated the second year since inception and seeks to empower women in Kenya to seize leadership positions in the Co-operative movement. Created in 2009, the network has reached women in over 60 countries worldwide. According to Ms Scholastica Odhiambo, the chairperson, GWLN is the only international platform dedicated to addressing and facilitating gender balance in leadership positions. “There is need to build gender parity within the Sacco movement,” said Dr Nancy Muriuki, KASNEB Chairperson, adding that the GWLN resonates well with the objectives of KUSCCO Women forum to advocate for women leadership in Saccos.

Bandari Sacco Launch a Tree Planting Campaign Bandari Sacco embarked on a tree planting campaign, in order to increase tree cover in the region and contribute to environmental conservation.

Former ICA President Lars Marcus passes away

The Kenya Union of Savings and Credit Co-operatives (KUSCCO) partnered with The Nature Conservancy (TNC), an environmental conservation organization, to implement a project dubbed ‘Kuza Miti’ to increase tree planting and sustainable wood supply in Kenya, through smallholder forestry initiatives. The project is aimed at commercializing tree planting in Kenya through the co-operative movement and also support environmental conservation especially in mitigating climate change. The project will enable, Saccos to access certified tree seedlings from the Tree Biotechnology Program Trust, for planting within their communities, and thus contribute to achieving 10% forest cover in the country.

The cooperative movement is mourning the loss of one of its pioneers, Lars Marcus, who died in Stockholm at the age of 95. Lars served as the President of the International Cooperative Alliance (ICA) between 1984 and 1995. A tireless advocate and defender of cooperatives, he also supported cooperative leaders in emerging democracies, helping to build an international cooperative development aid programme. In a statement Ariel Guarco, ICA President noted: “I deeply mourn the passing of Lars Marcus, the 11th President of the International Cooperative Alliance, who led our movement between 1984 and 1995. His visionary leadership helped our organization to consolidate on a truly global scale and to be an open house for all cooperatives in the world. He was among those instrumental in taking international cooperation to regions beyond Europe.

DECEMBER 2020 - JANUARY 2021 | SACCO TIMES

TESTIMONIALS

Here is what our readers had to say Saccos Awarding Big versus Consistent Savers! Saccos, are adopting this new trend, of rewarding big savers, as a retainment chip, as competition among them stiffens. They have been giving tokens such as cash, certificates, trips, trophies and so much more, to recognize, thus encouraging other members, to take the cue and increase their savings. However, they need to award consistent savers too, they might not have enormous savings, but are loyal and consistent savers, who patronize the Sacco’s products and services. These recognition schemes, should also cover, those who have taken loans and repaid, on a timely basis. Tabitha Enashipae, West Pokot.

Compiled by June Njoroge.

Mergers & Acquisitions are the way to go for small Saccos! Indeed, mergers and acquisitions, are the way to go for small Saccos, that risk getting insolvent. Many of them are struggling to operate, in terms of meeting loan demands, regulatory capital requirements and even making the switch to digital services, which has now become a necessity in the sector. These systems require gigantic investments, which small Saccos cannot accommodate; they might end up settling for a system, that is not adequately secure and end up falling prey, to cyber-attacks, thereby risking member funds. Some leaders of small Saccos, feel threatened to lose their leadership positions, when they merge. However, they should look out for the interest of their members and not self-centered individual interests. The Regulator, should now embark on educating these small Saccos, on the advantages of merging, especially, because some of them, are grappling with liquidity crisis, under the weight of the Covid-19 Pandemic. Patrick Ogola, Busia.

Share More Success Stories from Sacco Members, Its Very Inspiring! I really enjoyed your November Issue, which I thought was very inspiring, to hear stories of the success that people have achieved and transformed their lives, through their Saccos. I am also a beneficiary from my Sacco, but this is my first month in business, so I don’t have so much to tell. All I can say is that my Sacco, helped me set up my beauty parlour, early in October. I took a loan of one million shillings, that enabled me to book rental space, buy equipment, hire a few employees and now we are up and running, thanks to my Sacco. It was refreshing to read stories of other people, that have also benefited from their Saccos. This is just the beginning for me, I have always wanted to own a beauty parlour and now thanks to my Sacco, my first business venture is underway. We need to hear more of such inspiring stories. Eunice Mwilu, Meru County.

Saccos Should Build Their Brands to Attract Members! Saccos are in a rush to recruit more members, but they need to take a step back and assess their brand, to see if its working for them or against them. The rapid proliferation of Saccos, has brought about cut-throat competition, as each Sacco strives to attract more members, so there is an urgent need, for them to asses their public image and perception. If their reputation or visibility is wanting, they should consider rebranding and engage PR firms in this endeavor. Andrew Kiberia, Nairobi County.

SACCO TIMES | DECEMBER 2020 - JANUARY 2021

Saccos Should Consider Availing Dividend Advances! Saccos have been instrumental in offering relief to their members, especially in the wake of the Covid-19 Pandemic, that seen many lose their jobs, while others have experienced salary cuts. If Saccos were to avail dividend advances to their members, it would go a long way, in resuscitating the well-being of families and businesses. Freezing dividend payouts, in order to preserve capital and retain reserves; to ultimately avoid a liquidity crisis, is a wrong move and Saccos, should strive to support their members, during this turbulent times, by making dividend advance payouts accessible. David Muhoho, Murang’a 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.}

It’s The Little Things That Count

2021

CALENDER

Adding Value to Life

Head office: Mentor complex building, Uhuru highway, Murang’a town Branches : Nairobi, Kenol, Ithanga, Thika, Kiria-ini, Kandara, Kangari,Kahuro, Kangema Address: Box 789-10200, Murang’a Tel: 0704066827, 0739745220, 0713072137, 0771084440, DECEMBER 2020 - JANUARY 2021 | SACCO020-3580167 TIMES 47 Email: info@mento rsacco.co.ke | website: www.mentorsacco.co.ke

Education Loan

Repayable within 12 months. Interest monthly amortization at 1.0% One off process fee of 0.5% approved amount. FOR MORE INFORMATION VISIT UKULIMA SACCO SOCIETY LIMITED Kisumu Branch: Head Office: United Mall, Fround floor, Wing A, Ukulima Co-operative House, P.O. Box 1378-40100 Kisumu. Haile Selassie Avenue, Tel: 057 2020169. P.O. Box 44071-00100, Nairobi Tel: 020 2785000, 2227710/13 SACCO TIMES | DECEMBER 2020 - JANUARY 2021

Mombasa Branch: Bahman Trust Building, Mikindani Street, P.O. Box 86051 – 80100, Mombasa. Tel: 020 2616972, 041 2312444

Eldoret Branch: Sirikwa Hotel Building, Oloo Street, P.O. Box 6703 – 30100, Eldoret. Tel: 053 – 2032364.

Email: info@ukulimasacco.coop | www.ukulimasacco.coop

Embu Fosa Branch: Kenyatta Avenue, Eastern Emporium Building, P.O. Box 992 – 60100, Embu

SACCO TIMES EDITION 31

Articles inside

Mentor Sacco Members Count their Blessings One by One

Fraud Mitigation: Saccos to Deploy Data Analytics

African Continental Free Trade Area: Co-operatives Fostering Implementation

Magereza Sacco Leads in Conducting Countrywide Member Education Drive

Lengo Sacco Embraces Technology to Spur Growth

Of Co-operative Conversations: Re-evaluating the Co-operative Identity

New Law: Securing Sacco Loans Using Household Items

Imarika Sacco Set to Soar Higher in 2021 Driven by Technology

Ukulima Sacco Introduces a Mortgage Product

Effective Strategies Against Cyber-Attacks

Africa’s Agenda 2063: Key Contributions by Kenyan Saccos

Members Urged to Embrace M-Boresha to Curb the Spread of the Covid 19

Age of Digital Saccos: Kenya Police Sacco Feted for Excellence

Saccos Catalyzing Change in The Lives of Members