CO-OP NEWSPAPER by Gabriel M Sankale

SACCO

25 join SASRA’s new list of licensed Saccos »» Page 2

FOCUS ON SACCOS IN UPPER EASTERN »» Pages 5, 6, 7, 8, 13 & 26

REVIEW Website: www.saccoreview.co.ke

THE LEADING NEWSPAPER FOR THE CO-OPERATIVE MOVEMENT IN KENYA

AUG 20 - SEP 20, 2021

Kenya’s Richest Saccos revealed KSHS 50

ISSUE 68

STORY PAGE 4

BAT Sacco Chairman Patrick Muriira and General Manager Edith Murunga proudly display their licence certificate during the presentation of compliance certificates to 25 DT saccos that have met the Sacco Society Regulatory Authority (SASRA) regulations at Safari Park hotel, Nairobi. Photo/Daniel Ogendo

KMRC boost to first time home owners »» Page 9

The rise and rise of Sacco loan books amid Covid-19

»» Page 22

How Sacco loan boosted family business »» Page 31

Alarm as coffee thieves hit factories »» Page 22

2 | SACCO REVIEW

AUG 20 - SEP 20, 2021

25 NWDT Saccos comply with new regulations The CS said that the government is keen on ensuring transparency and strong governance structures among saccos while also securing members' assets and savings through the new regulations. The 25 Saccos included Mhasibu Sacco, Jogoo Sacco, Kenya Medical Association (KMA), Co-operative Bank Sacco, Smart Savers, Kewisco, Banki Kuu, Lompasago, BAT, Ubora, Njiwa, CIC, Mt. Kenya University Sacco, Balozi, Biblia, ESTA, Amref,Utabibu, Finnlemm Network, Kenya-Re, Waskom, Umoja Wendani, Blue Eagles and Family Bank Sacco. “The authority received 157 applications from 16 counties. Nairobi County had the highest share of 125, followed by Kiambu at 9, Mombasa 7, Machakos 3 and Siaya 2. The remaining 11 counties have one sacco,” says the chairman. He also said that Sasra now had 90 days as designed in the regulations to assess and decide on the remaining 132 Saccos that are awaiting authorisation. The regulations were effective from July 1st, 2021. Mr Munuve was speaking during the stakeholders breakfast briefing and issuance of the certificates of authorisation to the compliant Saccos that was presided

By Malachi Motano A section of specified Non Withdrawable Deposit Taking (NWDT) Saccos can now operate comfortably after Sacco Society Regulatory Authority (SASRA) issued them with authorisation certificates for complying with the new Sacco regulations. The new regulations, dubbed Regulations 2020, that came into effect at the beginning of the year (January 1, 2021) required the specified NWDT Saccos to prescribe the minimum capital and liquidity requirements that must always be maintained by the Saccos. Other prudential standards under the new regulations include investment decisions on lending or credit operations. According to Sasra Chairman, Mr John Munuve, only 25 specified NWDT saccos out of the 157 that applied for compliance managed to meet the June 30th deadline. The sacco regulator said most of the remaining Saccos are at different stages of the compliance process.

over by the Cabinet Secretary for Agriculture, Livestock, Fisheries and Co-operatives, Mr Peter Munya . The CS said the government is keen on ensuring transparency and strong governance structures among saccos while also securing members' assets and savings through the new regulations. “As a government we have to work tirelessly to transform the Sacco sub sector and ensure its stability. We have the responsibility to protect the savings made by members of the public in these Saccos through regulations,” says the CS. The CS said he is elated to note that many Saccos are now putting in place proper governance structures so as to meet the prudential legal framework provided in the new regulations. “Today I have the pleasure to issue authorisation certificates to 25 Bosa Saccos, which did not only comply, but have also successfully gone through the vigorous processes prescribed in the law before a certifi-

cate is issued. I would like to warn the Saccos that attaining compliance is one thing and maintaining it is a different thing all together,” noted the CS. Munya directed the Saccos Fraud Investigations Unit to fast-track criminal investigations within the SACCO subsector and recommended criminal prosecutions where criminal culpability is proved. He emphasized that the government shall take a firm action against persons or Saccos, which for selfish personal gains chose treacherous paths to operate. He appealed to members of the public to desist from undertaking sacco business with unregulated entities. The specified NWDT Saccos include those in which the total non withdrawable members deposits amounts to Sh100 million and above, those operating digital saccos and those whose memberships and subscription to its share capital are from

John Munuve, SASRA Board Chairman. persons in the diaspora. The Non-deposit taking (commonly referred to as Bosa Saccos) Saccos are savings and credit societies where members make deposits, but the savings are not available on call and can only be withdrawn when the member is leaving the Sacco. Currently Sasra is regulating 175 deposit taking Saccos. The government, through the authority is keen to bring more Saccos under the regulatory oversight to improve their performance and overall governance.

FOCUS ON NEWLY LICENSED SACCOS

CIC Sacco meets SASRA compliance requirements By Staff Reporter CIC Sacco is among the 25 Non-Withdrawable Deposit Taking (NWDT) Saccos issued with compliance certificates by the Sacco Society Regulatory Authority (SASRA). CIC Sacco Society Ltd is registered under the Co-operative Societies Act with its headquarters in Nairobi. The Sacco offers Back Office Services Activity (BOSA) to its

members. CIC Sacco Society Limited was registered on the 19th of May 1992 to facilitate savings and provide credit to employees of CIC Insurance Group and its subsidiaries. Over the years, the Sacco has witnessed growth in its assets, capital and membership. The Sacco is efficient in loan processing within two hours record and offers efficient service delivery to the members.

CIC Sacco is managed by directors who are elected by the members at the Annual General Meeting (AGM) and full time Sacco Secretariat who oversee the day-to-day operations of the Sacco. The Sacco was issued with the compliance certificate during a colourful occasion held at Nairobi’s Safari Park hotel that was presided over by Cabinet Secretary (CS) for Agriculture, Livestock, Fisheries and Co-operatives Peter Munya. Also in attendance was Principal Secretary (PS) for Co-operatives, Mr Ali Noor Ismail and Commissioner of Co-operatives Geoffrey Njang’ombe. The new regulations governing NWDT saccos, dubbed Regulations 2020 which came into effect at the beginning of the year (January 1, 2021), required the specified NWDT Saccos to prescribe the minimum capital and a liquidity requirement that must always be maintained by the Saccos. Other prudential standards under the new regulations include investment decisions on lending or credit operations. CS Munya said that through the new SASRA Regulations 2020, the government is keen to ensure transparency and strong governance structures among Saccos while securing members’ assets and savings. “As Government we have to work tirelessly to transform the Sacco sub sector and ensure its stability. We have the responsibility to protect the savings made by members of the public in these Saccos through regulations,” noted the Cabinet Secretary.

aUGUsT, 2021

CIC Sacco Chairperson, Florence Kimani (centre) receives a compliance certificate from CS Peter Munya.

INTRODUCTION

WHY YOU SHOULD JOIN CIC SACCO

CIC Sacco was dully registered as a savings and credit co-operative society domicile in Kenya in 19th May 1992 under Cap 490 and draws its membership across the country.

We are a solution-oriented Sacco that endeavors to improve the lives of our members. Our products and services are customized to meet your every need. Becoming a member means; you become the owner with equal rights and a voice on how we run our society democratically. We remain committed to high standards of corporate governance to ensure maximum member satisfaction.

REQUIREMENT FOR MEMBERSHIP

CIC Sacco Ltd admits into membership person who meets the following criteria:  Above 18 years  Pays a registration fee of Ksh 1,000.00 The minimum share capital is Ksh 20,000.00 and is mandatory for all members.

Merits of being a Member  Low interest rate.  Quick loan processing.  Member focused services.  Flexible loan repayment periods.  Competitive returns on Shares

HOLIDAY CONTRIBUTION

Ben Simiyu, Vice Chairman.

Cosmas Lelei, Treasurer.

Kelvin Mwambingu, Secretary.

Christine Ondari, CEO.

This a unique product open to CIC Sacco members tailored to assist them to save for festive season in the month of December. The contributions are done for a period of 12 months i.e. from December to November. On the first week of December, members are paid back the cumulative amount contributed along side interest earned for the year. PLAN YOUR HOLIDAY AHEAD

FOCUS ON NWDT SACCOS C

VISION To be the Sacco of choice in Provision of financial solutions. MISSION To promote Wealth creation amongst our members by providing quality and diversified products and services at sustainable rates.

OUR PRODUCTS

CORE VALUES 1.FromDEVELOPMENT /NORMAL PRODUCT left: Makueni MP. Daniel Manzo, CEO CIC Sacco and ChairFairness, Integrity man CIC Sacco at Safari park receiving the award. Care This is a loan granted mainly forTeamwork, theDemocracy, purpose of a long term development CIC Sacco Ltd was ranked position three as the Most project. Efficient Employer based Sacco during the year 2019 International Cooperative Day Celebration. During the same year, CIC Sacco Board launched a strategic

Pay promptly

plan OPTIMAL to guide the operations of the Sacco to even 2. PRODUCT Borrow wisely much greater heights. This loan is granted mainly for purposes of long term development, Save regularly expansion or extension of assets.

3. SCHOOL FEES PRODUCT CIC Sacco offers a short term product which is aligned to members education Phone: 0703099434 and/or that of their dependents. P.O.BOX 59485-00200 NRB From left: CIC Sacco CEO, CIC Sacco Chairman, PA to Director

Email: saccomanagement@cic.co.ke / condari@cic.co.ke

Marangu, CIC Sacco Patron and Director Marangu Coop bank 4. EMERGENCY PRODUCT presiding over the launching of strategic plan 2019/2023 We are located at CIC PLAZA 1, 2 Floor,Mara Rd,Upper Hill,NRB This loan is granted based on an urgent need. nd

5. BRIDGE PRODUCT Bridge loan is granted mainly to strengthen the member. 6. GUARDIAN PRODUCT This is the type of loan that shields member’s welfare and safeguards members against financial distress exposure. 7. RELAX PRODUCT This loan is a short term loan.

Phone: 0703099434 P.O.BOX 59485-00200, NRB. Email: saccomanagement@cic.co.ke/condari@cic.co.ke We are located at CIC PLAZA 1, 2nd Floor, Mara Rd, Upper Hill, NRB

AUG 20 - SEP 20, 2021

SACCO REVIEW | 3

FOCUS ON NEWLY LICENSED SACCOS

AMREF Sacco awarded SASRA compliance certificate By Staff Reporter AMREF SACCO is among the 25 Non Withdrawable Deposit Taking (NWDT) Saccos issued with compliance certificates by the Sacco Society Regulatory Authority (SASRA). The colourful occasion held at Nairobi’s Safari Park hotel on July 8th, 2021 was presided over by Cabinet Secretary (CS) for Agriculture, Livestock, Fisheries and Co-operatives Peter Munya. Also in attendance was Principal Secretary (PS) for Co-operatives, Mr Ali Noor Ismail and Commissioner of Co-operatives Geoffrey Njang’ombe. The new regulations governing NWDT saccos, dubbed Regulations 2020 that came into effect at the beginning of the year (Janu-

Alex Mugao, Chairman. ary 1, 2021) required the specified NWDT Saccos to prescribe the minimum capital and liquidity requirements that must always be maintained by the Saccos. Other prudential standards under the new regulations include investment decisions on lending or credit operations. Out of the 157 Specified NWDT Saccos that applied for compliance, only 25 managed to meet the June 30 compliance deadline that was set by SASRA, with the Regulator saying that most of the remaining Saccos are at different stages of compliance processing AMREF SACCO is a national savings and credit co-operative registered in 1983.

Morris Matheka, Vice Chair.

With an asset base of over 2 billion, AMREF SACCO offers a wide range of attractive savings products, affordable credit products and prime real estate products to its over 3,000 members. The SACCO Chairman, Mr Alex Mugao notes after receiving the compliance certificate, the SACCO will continue focusing on implementation of its strategic plan for year 2019-2023. “AMREF SACCO adopted the SASRA prudential guidelines in the last Strategic Plan 20142018. We have been preparing for the licensing since 2014 and therefore to us, this was a seamless transition into the new licensing,” explained the chairman. He further noted that the SACCO has been benchmarking and will continue to do so. “We have also been hosting other Saccos that are looking to benchmark with us. In the next five years, we aspire to be a pioneer SACCO with the first virtual FOSA,” Mugao added. On his part, the SACCO Chief Executive Officer (CEO), Mr James Warui said the Sacco membership currently stands at 3, 770. “Our membership strategy as entrenched in the AMREF SACCO strategic plan 20192023 is to recruit quality members that come with a high monetary value. We are not driven by absolute numbers and that is evident in our average saving per member which stands over KES 500,000; which is higher than most Saccos. We plan to continue with the same strategy,” notes Warui On the quality of products and services, the CEO noted: “We conduct periodic reviews of our products based on our members’ needs. We are planning to launch a Mortgage loan towards the end of the year.” Further the CEO noted that the Sacco had invested heavily in ICT. “The need to continue innovating has also been accelerated by the Covid-19 pandemic where we have strived to serve our members remotely via digital platforms. We deployed a mobile banking platform in the year 2019 that serves both as a self-care platform and a mobile loan lending platform. We have launched an online Loan application module this month and

Alice Mwanda, Treasurer.

this will enable our customers to apply for loans digitally without completing physical forms,” he said. Warui explained, “We have just deployed an Electronic Data Management System (EDMS) aimed at digitizing our registry and member records going forward. Additionally, this year we are also upgrading our Core Banking System (CBS) to include key modules like Business Intelligence (BI) that will enable us to generate various reports required by SASRA and other stakeholders. Also, the upgrade on the AMREF SACCO website is scheduled for the last quarter of this year. The new website will have a share trading platform where exited members share capital will be listed for purchase by existing members or joiners.”

James Warui, CEO.

AMREF SACCO adopted the SASRA prudential guidelines in the last Strategic Plan 2014-2018. We have been preparing for the licensing since the year 2014 and therefore to us, it was a seamless transition into the new licensing. - Sacco Chairman

John Mwangi, Hon Secretary.

Hon. Peter Munya, Agriculture, Livestock, Fisheries and Co-operatives Cabinet Secretary

We welcome this new regulation by the SACCO Societies Regulatory Authority which is aimed at promoting sound and prudential business practices in the Co-operative movement. With an asset base of over KES 2 Billion, AMREF SACCO provides competitive financial services that have been empowering our clients economically and socially since 1983. We have a wide range of attractive saving products and low-interest loan products to meet our clients’ needs. We draw our membership www.amrefsacco.org @amref.sacco both from NGOs and Corporates.We also accept individuals referred by existing members

www.amrefsacco.org

@amref.sacco

AUG 20 - SEP 20, 2021

4 | SACCO REVIEW

Kenya’s wealthiest Saccos named in 2020 SASRA supervision Report Ranking

Name of DT Sacco

Total Assets Sh. Billion)

MWALIMU NATIONAL

57.73

STIMA DT-SACCO

41.05

KENYA POLICE

39.05

HARAMBEE

32.56

AFYA

19.88

METROPOLITAN

16.73

UNAITAS

16.57

IMARISHA

14.16

UNITED NATIONS

14.08

TOWER

13.73

UKULIMA

12.74

INVEST & GROW (IG)

10.48

GUSII MWALIMU

10.44

BANDARI

10.01

HAZINA

9.69

IMARIKA

9.34

MENTOR

8.92

KENYA BANKERS

8.58

NEWFORTIS

8.18

BORESHA

7.94

KIMISITU

7.66

SAFARICOM

7.47

WINAS

7.13

COSMOPOLITAN

6.95

SHERIA

6.72

TRANS NATION

6.62

MOMBASA PORTS

6.57

KITUI TEACHERS

6.52

MAGEREZA

6.35

BINGWA

6.21

OLLIN

6.02

SOLUTION

5.64

WAUMINI

5.26

NACICO

5.13

USHURU

4.85

JAMII

4.67

K-UNITY

4.60

AMICA

4.55

KWETU

4.38

UNISON

4.33

MAISHA BORA

4.26

YETU

4.19

FORTUNE

4.08

CHAI

4.03

UKRISTO NA UFANISI

1.69

CAPITAL

4.03

KINGDOM

1.58

NYATI

3.79

WAKENYA PAMOJA

1.51

TAIFA

3.68

TRANS-ELITE COUNTY

1.46

TEMBO

3.61

SIMBA CHAI

1.41

SHIRIKA DTS

3.61

WANANDEGE

1.38

WANANCHI

1.37

By Malachi Motano

he Deposit Taking Savings and Credit Co-operative Societies (DT-Saccos) registered respectable growths in all the key measures of performance during the troubled 2020 financial year. According to the comparative growth and performance trends of the DT-Saccos (2019 – 2020) in Sacco Supervision report by Sacco Society Regulatory Authority (SASRA), total assets increased from Sh556.71 billion recorded in 2019 to reach Sh627.68 billion in 2020 representing a 12.75% growth rate compared to 12.41% growth rate recorded the previous year. The gross loans portfolio on the other hand recorded a growth rate of 13.16% to reach Sh474.77 billion in 2020, compared to a growth rate of 12.09% recorded in 2019 and amounting to Sh419 billion. The increase in the gross loans’ portfolio shows that notwithstanding the adverse effect of the COVID–19 pandemic and the associated governmental restrictions, the DT-Saccos continued to advance loans to their members. The resiliency of DT-Saccos despite the impacts of the COVID-19 pandemic on the general economy is further shown by the fact that the allowance for loan loss reduced from 26.95% in 2019 to 24.78% in 2020. This shows that a majority of the Sacco members continued to promptly serviceEGERTON their loan repay62 UNIVERSITY ments during theNATION period and very 63 few of the loans were not being ser64 MWITO viced in accordance with their con65 BIASHARA tractual obligations. 66The total deposits ARDHI portfolio on the67other hand increased to Sh431.46 TRANS NATIONAL TIMES billion in 2020 from Sh380.44 bil68 SKYLINE lion recorded in 2019, representing 69 a 13.41% growthDIMKES rate compared to 70 CHUNA recorded in a growth rate of 11.27% the71previous year.AZIMA

The increase in the total deposits also shows that on average members of Sacco Societies continued to meet their savings obligations to their respective DT-Saccos, notwithstanding the adverse effects of the COVID-19 pandemic on the national economy, and this was driven by a huge growth in the withdrawable deposits’ component of the deposits. The increase in total deposits can also be attributed to the fiscal interventions initiated by the govern-

Peter Njuguna, Ag CEO, SASRA. ment to cushion the economy from the impact of COVID-19 pandemic, especially the reduction in the rate of payment of income tax from 30% to 25% during the course of the year 2020, which had 2.30 the effect of increasing the amount of disposable 2.24 incomes in the hands of members of DT-Saccos. 2.13 2.07 also reports that The Authority there was a commendable increase 2.04 in the total core 1.92capital within the DT-Sacco system by 23.41% in 1.83 2020, compared to a marginal in1.76recorded in 2019 crease of 6.49% 1.72 which is evidence of financial soundness and 1.71 stability of the DT-

KENPIPE

3.39

NDEGE CHAI

3.28

TAQWA

1.36

KENYA HIGHLANDS

3.21

FARIDI

1.35

TAI

3.13

WANA-ANGA

1.30

KENVERSITY

3.12

UNIVERSAL TRADERS

1.30

NG’ARISHA

2.94

DAIMA

1.29

GDC

2.88

SOUTHERN STAR

1.24

ASILI

2.74

SMARTLIFE

1.24

THE NOBLE

2.57

ELIMU

1.23

QWETU

2.40

ECO-PILLAR

1.18

NAWIRI

2.37

CENTENARY

1.17

NSSF

2.34

KITE

1.06

EGERTON UNIVERSITY

2.30

FUNDILIMA

1.00

NATION

2.24

TELEPOST

1.00

MWITO

2.13

MAFANIKIO

0.97

BIASHARA

2.07

ARDHI

2.04

93 94

MUKI TABASAMU

0.90 0.88

TRANS NATIONAL TIMES

1.92

SULUHU

0.87

1.83

AIRPORTS

0.82

1.76

2NK

0.81

TIMES U

0.81

68 69

SKYLINE DIMKES

CHUNA

1.72

AZIMA

1.71

PRIME-TIME

0.80

UKRISTO NA UFANISI

1.69

100

K-PILLAR

0.77

KINGDOM

1.58

WAKENYA PAMOJA

1.51

TRANS-ELITE COUNTY

1.46

Sacco system. The capital reserves, which serve as a crucial component of institutional capital also increased by 18.18% in 2020 compared to 16.47% recorded in 2019 and thus evidence of higher retention of surpluses to build capital, especially in the wake of uncertainties associated with the impact of COVID-19 on the national economies. The report further shows that a total of 34 DT-Saccos had total assets above Sh5 billion in 2020 compared to 31 DT-Saccos which had similar asset’s size in 2019. In addition, these large-tiered DT-Saccos controlled 72.03% of the total assets within their system compared to 70.11% of the total asset’s portfolio which was controlled by the 31 large-tiered DT-Saccos in 2019. The increase of DT-Saccos in this category is informed by two institutions which crossed the threshold namely; M/S NACICO SACCO Society Ltd and M/S Waumini SACCO Society Ltd, both of which have their head offices in Nairobi City County and on the one hand M/S Kimisitu SACCOSociety Ltd which was newly licensed in 2020 with total assets above Sh5 billion. The number of mid-tiered DTSaccos however dropped from 58 in 2019 to 57 in 2020, while their cumulative proportion of total assets also dropped from 24.38% recorded in 2019 to 22.76% recorded in 2020. The drop in the number of midtiered DT-Saccos is informed by the fact that two of the previously mid-tiered DT-Saccos graduated to the large-tiered category, while one newly licensed M/S Ushuru SACCO Society Ltd fell in this category. On the other hand, the smalltiered DT-Saccos with total assets of below Sh1 billion also increased to 84 DT-Saccos in 2020 compared to 83 DT-Saccos recorded in 2019. Their proportionate total assets however, declined marginally from 5.52% of the total assets represented in 2019 to 5.21% of the total assets in 2020, as it depicts the fact that there exist very many small DTSaccos within the subsector, and whose growth rate remains comparatively low, when compared to the few mid-tiered and large-tiered DT-SACCOs. Individual performance In terms of the individual performance, M/S Mwalimu National SACCO Society Ltd remains the largest DT-Saccos in the country by total assets’ size which was posted at Sh57.73 billion in 2020 compared to Sh52.73 billion posted in 2019 and representing a 10.96% growth rate over the same period. The comparative analysis also shows that M/S Trans-Nation SACCO Society Ltd, which has its head offices in Chuka Town, TharakaNithi County registered the highest growth in total assets with a growth rate of 29.57% in 2020, which also saw it move from position 31 in 2019 to position 26 in 2020 among the large-tiered DT-SACCOs. It thus displaced M/S Tower SACCO Society Ltd with head offices in Nyandarua County which had in 2018 and 2019 registered the fastest growth rates in total assets.

AUG 20 - SEP 20, 2021

FOCUS ON UPPER EASTERN DT SACCOS

SACCO REVIEW | 5

Dhabiti Sacco to operationalize its Housing Subsidiary

By Staff Reporter he giant Dhabiti Sacco’s Housing unit has been registered and will be operational soon, a move that will see it play some role in achievement of the national government affordable housing agenda. The Sacco Chairman Augustine Mugambi noted that the unit is expected to take over some of the assets to ensure compliance with the regulatory ratio of land and buildings as a percentage of total assets. And as Kenya joined the rest of the world in marking the 99th Inter-

Some of the delegates who attended the Dhabiti Sacco 34th AGM at MCK Antubochiu on the outskirts of Maua town in Meru County.

Dhabiti Sacco Board of Directors Chairman, Mr Augustine Mugambi gives his speech during the institution’s 34th special delegates meeting. national Day of Co-operatives, locally christened Ushirika Day, Dhabiti Sacco had reason to look back with satisfaction and into the future with high level optimism. Dhabiti Sacco is among the fastest-growing Deposit-Taking Saccos that hold highest members’ savings in the country, the latest comparative analysis done by the Sacco Societies Regulatory Authority (SASRA) shows. The latest SASRA re-

port released in October last year, put Dhabiti Sacco’s total assets at Ksh0.62 billion while its total deposits stood at 0.40 billion. The Sacco, as per the SASRA report, had Gross loans of Ksh0.43 billion while total income stood at Ksh0.13 billion. And the Board chairman has called on members to continue subscribing to the M-banking platform in order to transact from the comfort of their homes rather than in the banking halls in a bid to curb the spread of

the Covid-19, noting that their ICT infrastructure continues to be a robust one. The Sacco Chief Executive Officer (CEO), Mr Titus Munjuri noted that the Sacco’s future remains promising given the determination of the board, staff and general membership. “We are all committed to making a difference and the focus each of us has is going to take us through all the challenges and ensure we prevail,” noted the CEO.

We are all committed to making a difference and the focus each of us has is going to take us through all the challenges and ensure we prevail. - CEO

June, 1987. It opened banking services in Maua town in 1991 at its own building known as Meru North Farmers Sacco Building, currently Dhabiti Sacco Building after the Sacco rebranded. The Sacco was founded by then coffee farmers from Igembe Co-operative Society, Tigania Co-operative Society and Miathene Co-operative Society. The total membership by then was over 40,000 coffee farmers from the entire Nyambene region. The Sacco opened its common bond in the period 1996 after the coffee sector declined in performance. Membership was invited from the tea sec-

Dhabiti Sacco Chief Executive Officer (CEO), Mr Titus Munjuri gives his keynote address during the institution’s 34th special delegates meeting. Dhabiti Sacco has its headquarters in Maua town with branches in Muthara, Mikinduri, Laare and Kianjai markets. They have a satellite branch at Miiciimikuru and Athi Mobile Unit in Igembe South Constituency. The CEO called on all the residents in Meru county and especially those living within the Nyambene region to join Dhabiti Sacco in order to benefit financially. The Sacco was registered by the Ministry of Co-operatives on 25th

tor, civil service and institutions. Becoming a member requires one to have an entrance fee of Ksh500, membership shares of Ksh1,000 and maintain an active account. To keep abreast with the financial market and remain competitive, the Sacco changed its name from Meru North Farmers Sacco to Dhabiti Sacco Ltd in the year 2012 and this bold move has really yielded positive fruits in its operations.

Continued next page...

6 | SACCO REVIEW

FOCUS ON UPPER EASTERN DT SACCOS

AUG 20 - SEP 20, 2021

...from previous page

DHABITI SACCO AT A GLANCE The Sacco is licensed by the Sacco Societies Regulatory Authority. The Licence authorizes the Sacco to collect deposits from members and disburse loans to them within the Regulators prudential guidelines. Janet Kobia, Hon. Secretary.

Jeremiah Koronya, Vice-Chairman.

BRANCHES NETWORK Maua Branch in Igembe South Constituency Mikinduri Branch in Tigania East Constituency Muthara Branch in Tigania East Constituency Kianjai Branch in Tigania West Constituency Laare Branch in Igembe North Constituency Athi Mobile Unit in Igembe South Constituency Luke Kanyoni, Board Member.

Stephen M’Ikiara, Treasurer.

DHABITI

“Our

Sacco Our Growth”

SACCO LTD

Vision To be the leading Sacco offering quality and secure financial services to our members within our outreach. Mission To mobilize savings and provide affordable credit to our members under sound management practices to improve their quality of life.

Peter Karuti Ncebere, Board Member.

OUR PRODUCTS

Lucy Kaindio, Board Member.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

LOAN PRODUCTS

FOSA PRODUCT Savings Accounts Toto Dhabiti Account Dhabiti Fixed Deposit Account Mpesa Waumini Savings Acccount Group Account Jaza Jaza Account School Fees Account School Fees Account Business Account Mbaine Account Schools / Colleges Savings NHIF

“Our Sacco Our Growth” WEBSITE: www.dhabitisacco.co.ke William King’ori, Board Member.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

ADVANCES Salary Advance 1 Month Crop Advance 1 month Salary Advance 6 Months Normal Loan 18 Months Biashara Loan 36 Months Group Loan Medical Loans Business Advance 6 Months Crop Advance 6 Months Normal Loan 12 Months Normal Loan 24 Months Personal Loans Maximum 72 Months Tank Loans Piki Piki Loan

P. O. Box 353 - 60600 Maua Tel: +254 064 21106, Cell: +254 (0)701 911765 Email: info@dhabitisacco.co.ke

AUG 20 - SEP 20, 2021

SACCO REVIEW | 7

FOCUS ON UPPER EASTERN DT SACCOS

Capital Sacco commits to empower members in poverty eradication labour finance and school fees. Still on the agricultural loans, the society has Tea Picking Advance designed to cater for farmer’s short term demands such as Tea Picking, Emergencies, Purchase of Farm Inputs, Tuition Fees, and Even Labour. It also has Tea bonus plus loan, a product for Tea Farmers with reference to the average amount of Tea Bonus Payment for the last two years. The product is meant for short-term development needs. Capital Sacco has Tea Welfare Loan aimed at farmers who deliver their products to KTDA and Private Tea Factories throughout the

By Malachi Motano Capital Sacco continues to provide base for financial growth and economic empowerment to its members with adorable and efficient products and services. According to the management, the Sacco is committed to empowering all shareholders to save and help them in poverty eradication. This they do by ensuring that we come up with loan products and services that suit their members’ needs. Some of the loan products at the Sacco include agricultural loans, salary loans, business loans and institutional loans. For Agricultural loan, Tea bonus plus classic loan is given to farmers with active accounts and who receive regular income from their tea earnings. It can be used to purchase agricultural inputs, equipment, livestock feed or raise

Peter Gikundi, Operations Manager.

Capital Sacco Headquarters.

CAPITAL SACCO REVIEWS ITS MILK PROCESSING FEE

apital Sacco has reviewed its milk processing fee in the dairy sector to cater for tariffs and a large population who earn less than Sh 1000 per month. The Sacco Operations Manager, Mr Peter Murithi Gikundi said they have stopped charging anything to farmers who are earning less than Sh1000 per month. “We have realised almost all farmers are able to get at least a litre of milk per day. Each litre sells at Sh 40 meaning they earn about Sh 1200 per month. This is a big population. That is why we have reviewed our milk processing fee to cater for

tariffs and those earning below Sh1000 monthly,” noted the operations manager. He said due to distance they have established Sacco branches in strategic locations to enable farmers and other clients to easily access cash and other products. He said previously they had been using points of sale to pay farmers but have now resorted to agents for the same. “All branches are networked. You can get services from across all branches in Meru County and Nairobi. Our fixed deposit rates are very favourable. Those willing to deposit can visit our branches and negoti-

ate. For business people we have current accounts and cheque books,” said Gikunda. Speaking in his office, Gikunda said the Sacco intends to open outlets in other areas including Maua and Chuka towns. He said they also have a product for Kangeta branch specifically catering for miraa people, noting that they have strategic plans with core values. He said they also do benchmaking with several Saccos visiting them to learn with the latest being Taifa Sacco, Trans Nation, Unitas and the Kenya Highlands Sacco among others.

Eliazar Kaburu, CEO Capital Sacco. country. The Loan is offered based on the accumulated kilos that a farmer has produced and delivered to the factory. The amount given depends on one’s personal needs. Even Coffee farmers are not left behind. The Sacco has Coffee development loan for coffee farmers with reference to the amount of Non-Withdraw-able Deposits that the member holds. The product is meant for development. Loan eligibility calculation will be based on 50% of a total of Three Previous Year’s Production. It also has Coffee Advance Loan, a product designed to cater for Farmer’s Short Term Demands such as Coffee Picking, Emergencies, School Fees, Purchase of Farm Inputs, and even Labour. For flower, fruits and vegetables farmers, the Sacco has Horticulture loan targeting Small Scale Horticultural Famers for purposes of production based on group lending methodology.

CAPITAL SACCO BASE FOR GROWTH

VISION A leading national SACCO offering superior financial services

MISSION To provide a range of quality, competitive and innovate financial services that empower members to undertake economic activities to improve their income and welfare”

MEMBERSHIP ELIGIBILITY ● A person of 18 years and above of good character and of sound mind. ● Must have minimum share contribution ● Individuals or organizations who open accounts with the SACCO. PRODUCT AND SERVICES OFFERED DEPOSITS Standing orders: For payment of one’s obligations Safe keeping of valuables: We provide safe deposits facilities on share certificates to our clients for important documents and other valuables at a small fee e.g. Title deeds, Share Certificate etc. Salary Processing: We process salary for Government employees, TSC employees and other Public and Private Institutions. Pension Processing: Education and Advisory services to the members. Ordinary Savings Accounts: Deposit of any amount is acceptable any time during banking hours in cash or cheque. Junior Savings Account: Under this account, you can save money to cater for its occasional expenses related to the child for birthday and school fees among others. The parent is the signatory to the account until the child attains the age of 18. Share Deposit Accounts: Under this account, you can accumulate your shares. Capital Bonus plus Fixed Account: Our fixed deposit accounts allows you to choose the maturity period that meets your needs with negotiable interest rates. CREDIT/LOAN FACILITIES ● Institutional Loans ● Crop Advances ● Coffee Development Fund (CoDF) ● Business Advance ● Salary Advance ● Production Loans ● BodaBoda Loans ● Development Loans ● Salaried Customer Loan ● JikoPoa Biogas Loan

MERU 0703770801 KANYAKINE 0703770760 GATIMBI 0703766016 NKUBU 0703770361 KINORO 0703769039 KIANGUA 0703770606 GITHONGO 0703770743

CORE VALUES: “QuITIC” ● Quality Service ● Integrity● Teamwork ● Innovation and Creativity ● Customer Focus

MICRO-CREDIT LOAN Micro-credit refers to small-scale services for both credit and deposits that are provided to: ● FARMERS ● FISH REARERS ● SELF HELP GROUP ● SERVICE PROVIDERS ● SALARIED PEOPLE ● ALL MICRO ENTERPRISES ● ENTREPRENEURS ● COMMUNITY BASED ORGANIZATIONS AGENCY BANKING Agency banking is a concept whereby a bank authorizes a third party to offer products and services on their behalf to customers Services offered by our Agency Banking ● Loan repayment ● Share Deposit ● Account opening ● Member registration

TIMAU 0703766521 KIONYO 0703769848 KIBIRICHIA 0703766534 MITUNGUU 0703769460 IGOJI 0703770739 CHAARIA 0703770739 KANGETA 0706715824

● Cash deposits ● Cash transfer ● Cash withdrawals ● Balance Enquiries ● Mini Statement MAZIWA PESA You can now borrow up to Kshs. one million to promote your Dairy Farming. The product is designed for dairy farmers who want: Buy high breed cows, Buy farm machinery, Construction of cowshed, General farm establishment. MSACCO Mobile banking services CAPITAL HOUSING INVESTIMENT An iniciative of Capital Sacco Ltd. ● Registration Fee Kshs. 200 ● Atleast Minimum of 10 Shares at Kshs 200 ● You can buy shares upto 25% of the investment

For more information please contact us P.O. Box 1479-60200, Meru Tel: 064-31446, 0708843287/8 Fax: 064-31675 www.capitalsacco.co.ke Email: agency@capitalsacco.co.ke Or any of our nearest branches:

8 | SACCO REVIEW

Simon M’Ikiara Kiruja, Chairman Meru Dairy.

FOCUS ON UPPER EASTERN DT SACCOS

A KENYAN JOURNEY

AUG 20 - SEP 20, 2021

Kenneth Gitonga, Meru Dairy CEO.

AUG 20 - SEP 20, 2021

SACCO REVIEW | 9

KMRC to offer zero stamp duty to first-time homeowners By Staff Reporter Kenya Mortgage Refinance Company (KMRC) is set to offer zero stamp duty to first-time homeowners as it continues to offer commercial banks and Saccos cash for onward lending to households. According to Agriculture, Livestock, Fisheries and Cooperative Cabinet Secretary Peter Munya, the noble initiative will enable co-operators to afford houses. “The Kenya Mortgage Refinance Company will ofAgriculture and Co-operative Development CS, Peter fer fixed-rate long term loans Munya with SASRA Chairman John Munuve. initially at concessional rates to financial institutions co-operatives, hence several The CS also noted that the .These loans will be offered reforms have been undertaken government has now finalized to participating financial institutions to finance affordable over the years to address these the process of reviewing the National Co-operative Policy housing loans as per the Gov- issues. Weak governance, high and added that the Bill is at ernment’s Big Four Agenda,” cost of finance, inadequate the tail end of the Parliamenhe noted. He also indicated that af- market access, delays and tary process. The policy recfordable housing loans are non-remittance of deductions ognizes Co-operatives as vecapped at Sh4 million within by employers, massive invest- hicles for realization of Kenya the Nairobi Metropolis (Nai- ments in non-core activities, Vision 2030 as well as private robi, Kiambu, Machakos and over dependence on exter- organisations that serve pubKajiado) and Sh3 million else- nal funding, non-performing lic good. “The two levels of Governwhere and will be extended to loans, obsolete technology, cybercrime and fraud; low ment shall continue to work borrowers with a monthly income of not more than Sh150, capital base; low participation closely with the Co-operative of youth and women and also Alliance of Kenya (CAK) 000. The CS maintained that inadequate human resource among other stakeholders to the government is cognizant capacity are among the main promote self-regulation. It is of the challenges faced by challenges facing co-opera- expected to provide direction tives. on the way the co-operative

tomation of services through Co-operative Management Information System (CMIS) to ease linkages with the counties and co-operative societies to enhance service delivery. “We are in the process of sector is governed in order to facilitating establishment of achieve socio-economic dethe Kenya Society for Profesvelopment,” Munya said sional Co-operators (KSPC) The CS was Speaking which is expected to enhance when Kenya joined the rest professionalism in co-operaof the world in marking the tives by setting minimum op99th International Day of Coerational and ethical standards operatives where he added as well as foster leadership that comprehensive review of and management capacities the Co-operative Societies Act within the co-operative sector and the Sacco Societies Act is to deliver to members’ satisalso underway as well as aufaction”, the CS said. Also present at the celebrations that were held in Weak governance, a Nairobi hotel was the Cohigh cost of finance, inadequate operative Alliance of Kenya market access, delays (CAK) CEO Daniel Marube who asked co-operative Sacand non-remittance cos to adhere to the new reguof deductions by lations that have been operaemployers, massive tionalized to provide direction investments in nonon how co-operative sectors core activities, over need to be governed. dependence on “SASRA is ready to handexternal funding, hold those co-operatives that non-performing loans, have not met the threshold on registration for licensing by obsolete technology, cybercrime and fraud; assisting them to ensure they register and adhere to the new low capital base; low participation of youth regulations,” he said. Dolphin Aremo, the Naiand women and also robi County Director of Coinadequate human operatives pointing out that resource capacity co-operatives are a devolved are among the main function with Nairobi being challenges facing in charge of over 70 per cent cooperatives. of co-operatives having mobi- Peter Munya lized assets worth Sh400 billion.

‘

Kenya’s Sacco deposits surpass Sh400bn mark By Our Reporter The total deposits held by deposit taking savings and credit co-operative societies (Saccos) in the country has now surpassed the Sh400 billion mark. This was revealed during the 99th International Day o f Co-operatives commonly referred to as Ushirika Day in Kenya. T h e total de-

posits held by the deposit taking Saccos increased from Sh380.4 billion in 2019 to Sh431.5 billion in 2020 showing an increase of 13.4 percent. In the same period, sacco assets rose by 12.7 percent from Sh556.7 billion at the end of 2019 to Sh627.7 billion in 2020 while Sacco gross loans increased by 13.2 per cent, hitting Sh474.8 billion from Sh419.6 billion. In December 2020, co-operatives restructured loans worth

Daniel Marube, CAK CEO during ICT Conference.

Sh7.7 billion compared to Sh2 billion in March of the same year. According to Co-operative Alliance of Kenya (CAK) Chief Executive Officer (CEO), Mr Daniel Marube, this year’s Ushirika Day celebration was based on the steps to full recovery from the ravages of Covid 19. “We all know that the outbreak of Covid-19 pandemic in the 2020 financial year has had severe impact as evidenced by some of our members in various Saccos and co-operative societies losing their jobs because of the shutting down of their mother employers, especially those in the hospitality industry,” Marube noted.. According to Marube, the pandemic led to reduction of business activities which ended-up supressing the Sacco earnings. “There was no saving for people who lost jobs. Most of these people were forced to exhaust their savings leading to depressed savings de-

posits and high up-take of CS Munya was accomloans from the sectors that panied by PS Co-operatives were heavily affected by Co- Hussein Noor Ishmael, the vid-19,” he explained. Chairman, National UshiriThe 2021 Ushirika Day ka Day Celebrations CounCelebrations, themed: ‘Re- cil, Chairmen, Co-operative build Better Together’ was Societies & Unions, among graced by Agriculture, Live- others. stock, Fisheries and Cooperative Cabinet Secretary Peter Munya. Sacco gross loans The CS recognised that increased by 13.2% Cooperatives cut across all sectors of the economy and sacco assets are critical in the contribution of equitable incomes. rose by 12.7% His ministry had appointed a task force to help operationalize the National Cooperative policy and review the Co-operative societies Act and the Sacco Societies Act. The task force will also look at the entire Co-operative structure; self-regulaIn December 2020, cotion to improve Co-operative operatives restructured governance, streamlining of finance and investment loans worth Sh7.7 billion procedures; co-operative re- compared to Sh2 billion in search and environmental March of the same year. concerns amongst others in the co-operative sector.

AUG 20 - SEP 20, 2021

10 | SACCO REVIEW

EDITORIAL

Progress as Sacco Compliance implemented As the saying about the language of money goes ‘save me today and I will save you tomorrow’ it is crucial to ensure that the funds of members are well secured in Savings and Credit Cooperative Societies (Saccos) through laid out policies for regulation. While Kenyans are encouraged to develop a saving culture, getting to commit part of their disposable income for future use and enabling them to raise their ability for borrowing, the same effort should be put in ensuring the safety and the stability of the Saccos. When the issues of economic and social importance are raised in co-operative institutions, that is where the regulations come in. Sacco Societies Regulatory Authority was founded after the Sacco Societies Act of 2008 with the mandate to license, regulate and supervise the subsector. Under the additional regulations dubbed Regulations 2020, SASRA licensed 25 Non-Withdrawable Deposit Taking (NWDT) Saccos this year. The regulations that came into effect on January 1, 2021 required Co-operative institutions to prescribe the minimum capital and liquidity requirements and have inclusive investment decisions on lending or credit operation to ensure growth. The regulator has come up with policies that aim at operational safety and efficiency of existing co-operative institutions, therefore, making them achieve their fundamental values. Moreover, other than protecting the Sacco employees by ensuring they adhere to the regulations in place, the organisations are also guarded against mismanagement, exploitation by swindlers, lawsuits by their clients or partners and other possible risks. Therefore, compliance ensures Saccos are accountable by conducting audits and carrying out inspections in adherence to the set internal or external regulations. For the avoidance of disastrous reputation damage, loss of clients, trade and business relationships, proactive and preventive compliance should be in place for the subsector to make good business sense and attract investors. The co-operative sector can put their hopes in SASRA.

SACCO REVIEW

Website: www.saccoreview.co.ke

Chief Executive Officer: Peter Silsil Business Development Manager: Stephen Makabila Editor: Allan Kibet Revise Editor: John Nyaosi Marketing Executives: Omari Onyango, Joseph Mbanda & Brenda Korir Layout & Design: Gabriel Sankale & Sydney Kimiywi Distribution Team: Daniel Maganya, Gerald Labatt & Peter Suge

Registered at GPO as a newspaper

OPINION Let’s rate Saccos based on how they empower members The origin of Saccos was motivated by the spirit of togetherness, mutual support and pooling of resources together for a common good. These virtues were later adopted by the international cooperative alliances to form part of the virtues of every cooperative society. The virtues ensured formation of great cooperative movements as the society witnessed the benefits derived by the act of collaboration. The fruits of cooperative movement are manifesting in almost every sector of the economy. An example is the dairy industry where we have the Kenya Cooperative Creameries, Kinangop Dairy Limited and many more. I would like to reflect on the basic reasons why we register as members of Saccos: savings and

Paul Ngugi Ruo

credit. I would also like to raise a fundamental concern on the direction most cooperatives are taking i.e. rushing to make big profits instead of advocating that members should save and ensuring affordable, flexible and cheap credit to members. Issues of dividends, bonuses and interests should be among the leanest motivations as to why an individual should join a Sacco. Sacco boards should check into their products and ask themselves one fundamental ques-

tion….. What are our products’ aims and objectives? Do they increase profits or are they geared towards making the lives of our members better? Every cooperative board should strive to ensure they stay focused and respect the meaning and the spirit of a Sacco: savings and credit. Saccos today have lost their memberships to self-help groups which mostly subscribe and connect more to members’ interests. Sacco leaders should ask themselves why their members are joining self-help groups whose objectives almost rhyme with those of Saccos. Cooperative officers and Saccos Societies Regulatory Authority (Sasra) need to ensure the products offered by Saccos are in tandem with the meaning

and spirit of the word Sacco. They should also ensure Saccos are not a profit making entity but rather an avenue to promote better living standards’ of members as well as being the absolute reason why the cooperative movement was originated. The success of a Sacco should never be rated by the amount of interests, bonuses and dividends issued to members but by how best a sacco’s products improve the living standards of members. I call upon all cooperators to consider how their Saccos are meeting the goals and objectives that encouraged them to subscribe as members of Saccos. Ngugi is a police officer based at NPCE campus. He holds a degree in cooperative business from the Cooperative University of Kenya

AUG 20 - SEP 20, 2021

SACCO REVIEW | 11

OPINION

Saccos need to formulate saving policies amongst members

he primary objective of Saccos has remained to be inculcation of a savings culture among members who create a pool of funds from which they access affordable loans for furthering their socioeconomic interests. Kenya is reputed as having the most vibrant sacco sub-sector in Africa. Be that as it may, beneath this remarkable achievement, there are challenges that go unnoticed by many industry players which I want to discuss briefly. To help one understand the real picture on the ground, it would be appropriate to pose the following simple but fundamental questions. • To what extent have ordinary sacco members utilized sacco loans to improve their living conditions by making meaningful and sustainable investments besides education of their children? • What mechanisms exist to monitor or evaluate how ordinary sacco members utilize their development loans? • What accounts for high rate of loan defaults whenever sacco members leave employment? • What is the actu-

al impact of ‘competitive’ short term loans that cooperatives keep developing in order to attract new members? • How have digital loans offered by nonsaccos impacted on the members’ credit worthiness and what are their likely effects on the members’ ability to service sacco loans? • What is the likely effect to sacco loanees and their guarantors who lose employment, in case they belonged to an employer-based sacco? • Has any research been done to determine the actual impact of Covid-19 on the sacco subsector in this country since its outbreak early last year? Although Covid-19 pandemic has been invoked as the major cause of decline in many businesses, the sacco subsector started experiencing challenges much earlier. The genesis of these challenges can be traced back to 1997 when the government liberalized the sector in line with the Sessional Paper No.6 of 1997 titled “Cooperatives in a Liberalized Economic Environment”. In the circular letter, the Commissioner of Cooperatives granted power to the saccos to formulate

their own Credit Policies deemed responsive to their members’ needs. He also advised the cooperatives to be guided by his earlier circular on the Model Credit Policy that had been applied uniformly in the entire republic. The highlights of the said model loan policy was that, cooperatives could grant a maximum of three loan products namely; normal/development, school fees and emergency loans.

Fred Sitati What happened immediately saccos were permitted to formulate their own credit policies? The saccos swung into action and came up with all manner of loan products since the policies made were only subject to approval by members at general meetings, at a time the very members

had insatiable appetite for short term loans. The clarion call from the leaders and some cooperative officers to the general meetings was that, since members’ interests came first, the committees should develop tailor made loan products to satisfy their needs so as to keep commercial bank loans at bay! That is the reason many saccos try to outdo one another by purportedly ‘innovating’ new loan products that only succeed in impoverishing their vulnerable members even more! When digital loans hit the country with a bang, the very members trooped to those digital platforms for more loans that turned out to be very expensive! The new National Cooperative Policy acknowledges that sacco members are today “net borrowers” and not “net savers”. They however do not prescribe appropriate interventions to reverse this unhealthy trend. What measures can be introduced to remedy the above scenario? Saccos need to be prevailed upon to formulate “Savings Policies” besides “Loan policies” so as to make it obligatory for sacco members to make

It’s time to create more jobs for our Kenyan youths By James Muthui Kogi As politicians elbow for attention in the run up to the country’s general election, a lot of promises have been made concerning what ails Kenya. This debate will end up with a new administration next year which is likely to shape our political and public discourse for another ten years. Have you ever wondered where those Government of Kenya and parastatal owned vehicles are always rushing to? The officers will drive off at top speed to their ivory tower offices but upon arrival, hung their jackets on the seats and lazy around just waiting to be sped off back home in the evening. What do these officers rush off to do? Indeed, there is little to show for all these bureaucrats we employ and pay while millions of our youths sit around waiting to be guided into the uncertain future with little prospect of a well-paying job.

Have you ever wondered why alcohol selling clubs have large parking areas for their revelers while we are told not to drink and drive? Drunk driving should be punished by permanent withdrawal of the driving license and thereby saving lives on our roads while creating a forced job for an eager Kenyan youth who is employed as a permanent driver. It is noteworthy that a prominent Kenyan Senator got his break into the political arena while working as a driver and through mentorship, his skills and natural gifting were recognized by his employer bringing him to the high table. Our youths are just looking for a chance to get a breakthrough. It is no wonder our embassies and high commissions abroad are filled with elites who would be much happier back home in Kenya playing a round of polo or golf. We have trade attachees in these embassies who cannot account for how much trade

gains they have won for Kenya since their postings. ''If we are to maintain the peace and stability we’ve enjoyed since independence, it’s time for Kenya to become the hub for Africa where all Africans are welcome to live and work without the fear of xenophobic attacks or targeted harassment.'' - Kogi Many value addition industries in Kenya are in their infancy processing products like honey, canned fruits, milk and tea. These industries have the potential of employing multiples of Kenyans were they to access more international markets. While the efforts of Kenya Association of Manufacturers, Kenya Private Sector Alliance and Kenya National Chambers of Commerce and Industry are laudable, more still needs to be done. According to the Youth Impact Labs, Kenya’s online gig economy is currently valued at $100

million and employs an estimated 36 thousand Kenyans. This is a drop in the ocean when compared to the potential. Jua Kali sectors have continued to labour under rudimentary technology producing the same low quality of goods. China has managed to lift a massive 350 million of its population out of poverty through technical skills emphasis in their education system coupled with the government supported growth of their cottage industries which makes them produce simple items for global markets. These global markets were made possible by government initiatives of bilateral trade agreements with other countries. In addition, the heavy investment industries were mostly started as government parastatals which were professionally run in diverse industries such as automotive, construction equipment, pharmaceutical and textile sectors.

some minimum savings while still in active membership. The savings would provide some fallback to them after exiting employment. I would like to commend Shirika DT Sacco for fixing minimum deposits by members at 10% of their monthly gross earnings. Saccos should amend their Loan Policies accordingly to include “Collateral” as an alternative security guarantee. This can be done by making a provision in the Credit Policy that before a property is accepted as security, the sacco needs to do a security perfection using a conveyancing lawyer of their choice and any resultant costs( legal and otherwise) thereof be borne squarely by the loan applicant(s) . Saccos should also invest in member education, especially on “Personal Financial Planning”. When all is said and done, saccos will only be useful vehicles of empowering their members sustainably if a lot of attention and resources are directed towards granting long term investment loans to their members. Sitati is a consultant in the Sacco Movement. Kenya is required to create 20 million jobs over the next ten years in order to absorb the youth into gainful employment. Large untapped markets await our Kenyan products in countries like DRC Congo, South Sudan, Tanzania and Nigeria many of whose populations are all projected to be among the top ten in the world by the year 2040. However, this will call for large government support of the Small and Medium Enterprise sectors. If we are to maintain the peace and stability we’ve enjoyed since independence, it’s time for Kenya to become the hub for Africa where all Africans are welcome to live and work without the fear of xenophobic attacks or targeted harassment. Beyond the campaigns and the new coalition building, it is time to look ourselves in the mirror and bequeath our children and future generations a more promising country. If Singapore, Malaysia and South Korea did it , we can also do it. Kogi is the Chairman, Kenya Motor Repairers Association (KEMRA).

12 | SACCO REVIEW

AUG 20 - SEP 20, 2021

Protect co-operatives from external interferences

I want to appreciate the State Department of Cooperatives for its continued promotion of cooperative movement in Kenya. Today, I write to request the commissioner consider do a review of the existing cooperative laws. It’s important to note that different cooperatives societies are at different stages of development and hence experience diverse challenges in their operations and each cooperative society has always strived to adopt policies and make regulations to ensure a continued growth and more profitability to ensure better returns to their members. Principles of cooperatives however need to be brought into perspective before all the policies or amendments to cooperatives are adopted and the commissioner ratifies, unfortunately the com-

missioner have at times overlooked this fundamental principle An example is the principle of voluntary and open membership. Cooperatives have always adopted retrogressive policies that bar new entrants in being part of their managements. Take an example of cooperatives who have adopted delegates systems as their mode of representation in their meetings, most delegates have always without reasonable reasons hiked the minimum share capital required for one to be elected as delegate to ensure they stay in office thereby blocking others to take this positions as well as new minds in the Sacco leadership It’s on the above reason that today I write to the commissioner to find it prudent to set a law to protect cooperative society members with minority shares from manipulation by

the majority shareholders. This can be done by regulating the amount of minimum shares by setting a percentage of members who should have the shares before they are adopted e.g. a cooperative society

Paul Ngugi Ruo who have 25 percent of its members with below Sh200,000 should not set a minimum amount for one to be elected as a delegate above Sh80,000. In fact the commissioner should borrow this from company law that has set regulations that ensures minor-

ity shareholders are not manipulated majority shareholders but are thoroughly protected. The commissioner should also ensure regulations to protect loan guarantors from cooperatives that attach their assets without the process of trying to seek legal redress or attaching assets of the defaulter. I have seen cooperative members abuse the rights of attaching defaulters assets due to lack of regulations to that effect that have compelled to request the commissioner set regulations to protect cooperators from unscrupulous individuals who have developed cartels to the disadvantages of cooperators. The use of law of agency should be relooked within the cooperative movement. I would equally rise against any proposal for cooperatives to have cooperatives hire inde-

pendent directors as proposed by Mr. Fred Sitati in the last month edition of Sacco Review as this would open a Pandora box within the cooperative movement. My proposal would be cooperatives should hire competent individuals in the Sacco management as well as have experienced cooperators and consultants hired to offer training and education to the Sacco directors. The other proposal would be to allow cooperatives’ identify requisite talents and expertise within their membership and later utilize them within the Sacco. This will not only be effective but also cost effective. Let’s protect cooperatives by ensuring no law, policy or regulation will interfere or may open cooperatives to outside interference outside its membership. Mr. Ruo is a police officer currently stationed at National Police College Embakasi A campus and holds a bachelor’s degree cooperative business from the Cooperative University of Kenya

FEEDBACK COLUMN Introduction of Sacco compliance rules laudable The introduction of Regulations 2020 that took effect early in the year is a step in the right direction. The Sacco or the co-operative movement (directly and indirectly) account for 45% of Kenya’s Gross Domestic Product and 30% of national savings and deposits. Unfortunately the sector has never been well regulated. As a result, we have had many cases where Kenyans lose their hard earned money to unscrupulous people who purport to be either Saccos or Co-operatives. Most of them have always hidden in the back office - the NWDT while others did not even have physical office. -Sharon Muhonja (muhonjasharz@gmail. com), a Co-operator.

I miss Ushirika celebrations I am a keen follower of matters Sacco since my life is a testimony that Saccos are agents of transformation. What I missed this year is Ushirika awards. Imagine Ushirika Day celebrations without Saccos bagging trophies God have mercy, let go Corona. It is from these awards that Sacco take cue to improve their products and services. I recognise that at least the government tried and had a virtual celebration as opposed to last year when it didn’t at all. Let’s hope that things will be right in 2022.to enable Ushirika celebrations committee organise a grand celebration. -Chrispinus Simiyu (chrissikuku096@gmail. com) from Kitale,

Saccos should invest in counties I have a concern; now that Saccos are no longer supervised by the National government since devolution while some of them are even bigger than commercial banks, can these established Saccos partner with County governments to offer some social services? I mean can Saccos be allowed to run schools, put up hotels among other social services? Some Saccos have tried but just through corporate social responsibility. Can a policy paper be developed to make it official? -Mohamed Birik Ali (moha25332405@ gmail.com) from Mombasa.

E-mail: saccoreview@shrendpublishers.co.ke / marketing@saccoreview.co.ke / Website: www.saccoreview.co.ke

AUG 20 - SEP 20, 2021

SACCO REVIEW | 13

FOCUS ON UPPER EASTERN DT SACCOS

SASRA: Times-U Sacco total assets hit Ksh 810m their ever increasing members. Some of the products include, Growth Oriented Enterprise Loanloans for boosting existing businesses, Development Loan-for development and investment, Boda Boda Loan- tailored to enable youth and any other willing person to own a motor bike, Jitegemee Loan, secured using movable household or chattels mortgage and Majani Loan–Loan for tea farmers. The Sacco also has Education Loan for school fees payments, Maziwa Plus Loan available to all dairy farmers whose milk payout is at Times U Sacco, Kilimo Bora Loan for seasonal farming e.g. Horticulture, Emergency Loan to help farmers counter any misfortunes which are emergency in nature as aUGUsT, 2021 Mr G.K. Kinoti, a member, Tender Loan which is Times U Sacco Chairman in a past event. mainly an LPO financing loan and Inuka Na Mshahara Loan which is affordable and has attractive interTimes U Sacco, investments. We ensure our mem- est rates. bers are able to grab the opportuOther loan products at the Saca timely financial nities as they come. We are com- co include Afya Njema Loan which

covers 7 people, Outpatient Ksh 50,000, Inpatient Ksh 250,000 and Burial arrangements Ksh 50,000. To enjoy the facility one must be a member of the Sacco, have shares and can get loan up to 3 times the value of the shares (deposits). The Sacco has affordable NHIF Loan to settle patient’s bill. In addition to the loan products, the Sacco also has insurance product which include Biashara Salama product to insure business property, stocks, assessed property and loan at affordable rates. Times U also has SACCO ASSURANCE to insure vehicle comprehensively and third party insurance at minimal rates and livestock The society also offers non-financial products/services like Safe custody, Training, Study tours and Exchange programmes. Its Fosa services include Biashara Account with low withdrawal charges, with business advances, Group Account where the loans is

partner in UpperEastern is rated by SASRA among the top 100 DT-Saccos nationally.

Meru County based Times-U Sacco’s total assets have hit Ksh 0.81 billion (Ksh 810 million ) as per the latest Sacco Societies Regulatory Authority (SASRA) Supervisory Report. SASRA’s Report for the year ending December 31st, 2020, also shows Times-U Sacco;s total deposits currently stand at Ksh 0.58 billion while its Gross loans stands at Ksh 0.66 billion. The Report released on August 13, 2021, further shows the Sacco has total income of Ksh 0.13 billion. The Sacco based in Nkubu town is rated number 98 out of the 175 DT-Saccos under SASRA supervision. Apart from the 175-DT Saccos, SASRA also supervises another 300 Non Depositt taking Saccos, with the first lot of 25 Saccos having already received compliance certificates according to the report on DT Saccos signed by SASRA chairman John Munuve and Chief Executive Officer (CEO) Mr Peter Njuguna. And given Times –U Sacco’s impressive growth, farmers, businessmen, civil servants and the employees in the private sector in Meru County should not worry at all of possible financial short fall when carrying out their businesses as Times-U Sacco offers to be a timely financial partner. “The difference between success and failure in business can be attributed to how soon your credit or financial needs are addressed. Every opportunity in business depends on how smart and fast you are able to grab it,” says Times U Sacco Chief Executive Officer (CEO) Catherine Mwamba. She adds: “At Times U Sacco we are able to address your financial needs at the time of your need and offer financial advice for wise

Times U Sacco Board and Management in a group photo. mitted to walk as per our slogan reads, Your Timely Financier.” According to the CEO, the Sacco has a qualified human resource through whom it ensures that it delivers what it promises to the members believing in all-round growth (members, directors, management and the entire Sacco family). “We believe we are growing stronger every day and as we grow, our members also grow. Our endeavour is to socio-economically transform the lives of our members through the provision of affordable, quality, competitive and market-driven financial solutions,” says the CEO. To achieve all that the Sacco endeavours to excel and its board of directors and management, led by the abled CEO, have ensured that they come up with products and services that meet the needs of

Catherine Mwamba, CEO. sacco review

given after saving for eight weeks and five times of the savings to group members, Haba na Haba Account, Hekima Account, Savings Account which accepts deposits in cash and cheque and members can channel their monthly proceeds like tea, milk, salary, coffee, payment. Still on Fosa accounts Times U Sacco has Special Deposit Account (Fixed), Timers Junior Account, M-Sacco Banking/Mobile Banking, Sacco link ATM Service, Agency banking services with Cooperative Bank Agency, Post Bank Agency, Equity Agency and KCB Agency. Committed to take services closure to its members, the Sacco has spread its branch network all over upper Eastern with their Headquarters at Nkubu, Imenti South on the Meru–Nairobi highway-opposite Nkubu police station with the branches at Mitunguu, Kariene, Githongo and Makutano.

TIMES U SACCO SOCIETY LTD Your Timely Financier

OTHER PRODUCTS BOSA PRODUCTS Growth Oriented Enterprise Loan Loans for boosting existing businesses.

Development Loan Loan-for development and investment.

Boda Boda Loan A product tailored to enable our youth and any other willing person to own a motor bike.

Jitegemee Loan Loan secured using movable household or chattels mortgage.

Majani Loan Loan for tea farmers.

Education Loan Loan for school fees payments.

Kilimo Bora Loan Repayment mode: Quarterly basis – half yearly.

Tender Loan This is a LPO financing loan.

Inuka Na Mshahara Loan Maximum repayment period is 24 months.

Tank Loan Instant loan for water harvesting.

Afya Njema Loan

FOSA SERVICES

Covers 7 people. Outpatient Ksh 50,000. Inpatient Ksh 250,000. Burial arrangements Ksh 50,000

NHIF Loan Affordable loan. To settle patient bills.

Maziwa Plus Loan Available to all dairy farmers whose milk payout is at Times U Sacco.

Emergency Loan Helps counter any misfortunes which are emergency in nature as a mem

Address: P.O Box 310-60202 Nkubu

Business Advance Loan Crop Advance Loan Group Empowerment Fund Maziwa Loan Salary Advance Loan M-TIME Pesa Ulipo M-PESA

Email: info@timesusacco.co.ke

Biashara Account Group Account Haba na Haba Account Hekima Account Savings Account Special Deposit Account Timers Junior Account M-Sacco Banking Sacco link ATM Service Agency Banking Services Web: http://www.timesusacco.co.ke

AUG 20 - SEP 20, 2021

14 | SACCO REVIEW

Sh5bn owed to Saccos by employers in non-remittance, says Report As the regulator, we are seriously concerned with the ever-increasing amounts of Non-remittances owed to Saccos. We are much concerned with the ever-growing amounts of non-remitted deductions which some employers continue to owe to DT-Saccos -SASRA Chairman John Munuve By Malachi Motano Despite the stellar performance of the Deposit Taking (DT) Saccos during the troubled 2020 financial year, Sacco regulator SASRA blames perennial delays in remittances of statutory deductions for topping the list of unwarranted challenges that hamper the growth and development of the societies. According to the SASRA’s 2020 Sacco supervisory annual report, the Sacco sub-sector is owed a sum of Sh5.04 billion by the employers of different employer based Saccos, which is an increase from the sum of Sh3.87 billion recorded during the year 2019; thereby calling for a rethink at the policy, legal and administrative structures aimed at addressing the problem. The report also indicate s that the sector also suffers low usage of ICT and other technologically enabled mobile devices in the provision of services, as well as short-term illiquidity needs resulting in delays by some DT-Saccos to make prompt refunds of members’ deposits as some of the teething problems facing the subsector. “As the regulator, we are seriously concerned with the ever-increasing amounts of Non-remittances owed to Saccos. We are much concerned with the ever-growing amounts of non-remitted deductions which some employers continue to owe to DT-Saccos,” SASRA Chairman John Munuve says in the report. The Chairman noted that Public Universities and Tertiary Colleges are the greatest culprits in failing to timely remit the deductions due to DT-Saccos which stood at Sh2.95 billion as at September 2020 compared to Sh2.86 billion as at September 2019. Private sector companies and institutions owed the second highest amount of non-remitted deductions which increased to Sh0.85 billion as at September 2020 from Sh0.48 billion reportedly owed as at September 2019. “Even the amounts of non-remitted funds owed

by the national government ministries, agencies and constitutional commissions increased to Sh0.58 billion as at September 2020 compared to Sh0.037 billion over the same period in 2019,” said the Chairman. Consequently, it is apparent that the policy and administrative initiatives undertaken by the national Government, the State Department for Co-operatives and the Regulatory Authority to reduce this menace of non-remittances are yet to bear fruit. In this regard, the Authority calls for an overhaul of the existing legal framework for recovery of non-remitted funds owed to DTSaccos, particularly from defaulting public entities which have proved to be perennial culprits. It also entreaties the National Co-operative Policy Ministerial Implementation task force which was appointed in December, 2020 to overhaul the legal framework for recovery of such non-remitted funds owed to Saccos by various employer-institutions, including criminalizing intentional failure to remit such deductions. On a positive note, DT Saccos recorded an aggregate asset base of Sh627.68 billion representing an annual increase of 12.5% and total deposits of Sh431.46 billion representing an annual increase of 13.41%. The report unpacks the critical role played by DTSaccos in deepening financial inclusion in the country, with a reported loan portfolio of Sh474.77 billion, constituting a yearly increase of 13.16%. “The Report is a testament to the fact that DT-Saccos continues to be a critical source of access to credit facilities by many Kenyans, particularly the household economies as well as the SME’s. Indeed, statistics in the report reveal that in the aggregate, DT-Saccos were able to defy the disruptions caused in the national economy by the impact of Covid-19 pandemic and the associated restrictions,” commented SASRA’s acting Chief Executive Officer

(CEO) Peter Njuguna, while releasing the report on the performance of the DT Saccos. Development During the year in review, the Authority licensed three new Saccos to undertake deposit taking Sacco business in Kenya. The new licensees which commenced operations in 2020 included M/S Ushuru Sacco Society Ltd, M/S KIMISITU Sacco Society Ltd and M/S ACUMEN Sacco Society Ltd. This increased total number of DT-Saccos with deposittaking licenses in Kenya to 175 DT-Saccos compared to 172 DT-Saccos back in

John Munuve, SASRA Chairman. 2019. The Authority continued to maintain surveillance in the market to ensure that there was no violation of Section 23 of the Sacco Societies Act which prohibits any person from undertaking deposit taking Sacco business without a valid license issued by the Authority. The total membership in the DT-Sacco system distributed among the 175 DT-Saccos was 5.47 million individuals in 2020 compared to 4.5 million reported in 2019. This increase in membership was primarily attributed to the increase in the number of licensed DTSaccos by three in 2020. Regrettably, a large proportion of the total membership within the DTSacco system accounting for 25.09% were reportedly inactive during the year 2020, implying that this portion of members had not made

any transaction with their DT-Saccos for six or more months. The majority membership of DT-Saccos were reported among the 49-Farmers based DT-Saccos which accounted for 41.93% of the total members while the 43-Teachers based DT-Saccos came second accounting for 22.91% of the total members. Taken into consideration the total number of members reported by the 43-Teachers based DT-Saccos vis-à-vis the total number of people generally employed within the common bond of Teacher’s based DT-Saccos, it is apparent that the Teachers based DT-Saccos are among Saccos which have largely opened their common bonds and admitted persons who are not necessarily within the original common bond of the teaching and teaching related professionals. Year 2020 also saw the Sacco Societies Fraud Investigation Unit (SSFIU) fully operationalized to combat financial frauds in the Sacco subsector following a Presidential directive in March. The Unit staffed by specialized personnel drawn from the Directorate of Criminal Investigations (DCI) are now in-charge of detection and investigation of criminal activities within the subsector, particularly those relating to embezzlement of members’ funds, cyber-related attacks, as well combating fraudulent schemes perpetrated by illegal entities posing as Saccos. Regulations 2020 SASRA also developed Regulations 2020 which took effect from 1st January 2021, bringing on board the Authority’s supervisory framework which are three clusters of Non-WDTSaccos. These are the NonWDT-Saccos with non-withdrawable deposits above Sh100 million, the Diaspora based Non-WDT-Saccos and the Digital or Virtual based Non-WDT-Saccos. “These categories of Non-WDT Saccos have for a very long time remained outside the supervision of the Sacco Societies Act because the necessary regulations had not been made,”

REMITTANCE

Public Universities/ Tertiary Colleges Sept 2020 -2.95B/- Sept 2019 -2.86B/-

Private Sector Companies & Institutions Sept 2020 -0.85B/- Sept 2019 -0.48B/-

Agencies & Constitutional Commissions Sept 2020 -0.058B/- Sept 2019 -0.037B/-

said SASRA Chairman John Munuve. However, with the publications of the Regulations 2020 and the appointment of their commencement date by the Cabinet Secretary Peter Munya, the Board reports that a substantial portion of the Saccos sector shall henceforth be brought under a standard prudential and market conduct framework According to the Chairman, implementation of the Regulations 2020 will weed out the operations of the many fraudulent and pyramid scheme-like entities,

which have for long fleeced the public of their savings by falsely pretending to be Saccos. In addition, compliance with the Regulations 2020 will ensure financial stability and soundness of Non-WDT Saccos, deepening confidence and trust in these Saccos as worthy financial institutions for making savings by the public, just like their DT-Saccos counterparts. “Indeed 2020 marked another important policy epoch in the supervisory and regulatory framework of the Saccos Subsector in Kenya,” the Chairman concluded.

AUG 20 - SEP 20, 2021

SACCO REVIEW | 15

Farmers’ saccos lose market share in total assets and deposits –Report By Malachi Motano The 2020 Sacco Supervision Report by Sacco Society Regulatory Authority (SASRA) reveals that farmer based Savings and Credit Co-operative Societies (Saccos) lost their market share for total assets and total deposits on financial performance of DepositTaking (DT) Saccos under the Common bond clusters. According to the SASRA report, whereas the 49 farmers based DT-Saccos controlled the largest chunk of membership at over 41%, the same is not true with regard to their market share for total assets and total deposits, which was reported as a paltry 10.20% and 9.87% respectively in 2020. Just like in the previous years, the 37 Governement based DTSaccos and the 43 Teachers based DT-Saccos continued to control the largest market share of both the total assets and total deposits’ portfolios within the DT-Sacco system. Whereas these two clusters accounted for less than a half of all the DT-Saccos, their aggregate respective share of the total assets and total deposits stood at 73.47% and 73.12%. The 37 Governement based DT-Saccos controlled the largest proportion of the total assets

and total deposits market share at 37.18% and 37.43% respectively; followed by the 43 Teachers based DT-Saccos at 36.29% and 35.69% respectively. The 24 Private sector-based DT-Saccos and the 22 Community based DT-Saccos remain the smallest in terms of the proportion of their total assets and total deposits. The 24 Private sector based DT-Saccos had their total assets at 8.63% and total deposits at 9.36%; while the 22-Community based DT-Saccos had their total assets accounted for 7.71% and total deposits accounted for 7.65%. Financial stability Based on the Capital adequacy, Asset quality, Earnings and Liquidity (CAEL) financial measurements, the DT-Saccos system reported increased capitalization during the year 2020 bolstered by the high overall retention by DT-Saccos in the wake of uncertainties associated with the aftereffects of Covid-19 pandemic on the national economy. The core capital in absolute terms increased to Sh97.74 billion in 2020 from Sh 79.20 billion reflecting an impressive 23.41% year to year change. With the high growth in the core capital, the DT-Sacco system was able to meet and maintain the prescribed capital adequacy re-

The reduction in the ratio was mainly pushed by the increase in withdrawable deposits during the period. However, it is important to point out that in the aggregate a majority of members of DT-Saccos are still net borrowers rather than net savers, which is informed by the structural inefficiencies arising from the Saccos business model quirements namely the core capital to total assets, total assets to total deposits and institutional capital to total assets. The core capital to total assets ratio increased to reach 15.57% in 2020 compared to 14.23% in 2019, against the prescribed statutory minimum ratio of 10%. The core capital to total deposits ratio grew to reach 22.65% in 2020 from 20.82% recorded in 2019

against the prescribed minimum ratio of 8%. The institutional capital, which reflect the level of retention of surpluses by DT-Saccos also increased to 11.39% in 2020 from 10.63% recorded in 2019 against the prescribed minimum ratio of 8%. The foregoing reflects the overall growth in capital reserves by DT-Saccos. Total income among the 175-DT-Saccos also grew to reach Sh86.04 billion in 2020 from Sh79.88 Billion recorded in 2019, and therefore representing a 7.71% increase. The total income was generally generated from the loans which accounted for 85.77% of the total income reported. It is also important to observe that 35.58% of the total income amounting to Sh30.61 billion was expensed as interest on deposits and paid back to members, thereby underscoring the comparative advantage of DT-Saccos as alternative savings’ financial institutions. The statutory liquidity ratio equally remained at a high of 48.50% which was well above the prescribed minimum statutory of 15%, although this was a slight dip from the ratio of 50.92% recorded in 2019. The total loans to total deposits ratio which measures the ability of DT-Saccos to fund their loan portfolio from the deposits remained high at 110.04% in 2020, although this was a slight drop

Taifa Sacco envisions significant growth in its strategic plan are membership growth, product and services, credit management, financial performance, infrastructure and operations, human resources, leadership and governance. The pillars, he said, are also expected to continue being the foundation on which the sustainability aspect of the Sacco is anchored on.

The expected outcome in the plan is meant to improve quality of services to members and especially the financial empowerment in the Agriculture and rural development sector. “This will uplift farmers and rural communities in their economic endeavours and aspirations,” he said. “I have no doubt in my mind

Taifa Sacco Chairman, James Giting’a.

Samuel Ngugi, Taifa Sacco CEO.

By Asa Maina Taifa Sacco envisions attaining a significant growth in various key performance indicators in its 2021/25 strategic plan. Chairman James Giting’a said the indicators include growth in share capital, deposits, loan book, savings and management of the loan defaulting. Speaking during the Sacco’s thanksgiving and the launch of the five year strategic plan recently, Mr Giting’a said the plan is build on seven pillars which

Nyeri Governor Mutahi Kahiga unveils Taifa Sacco 2021-2025 Strategic Management Plan.

that after we successfully implement the seven pillars in our strategic management plan, our beloved Sacco is expected to grow in leaps and bounds and further cementing the Sacco’s strategic position of being the largest financial services provider in the region,” he noted. Taifa has 18 branches spread across Nyeri, Laikipia, Nyandarua, Nakuru, and Nairobi counties. During the implementation of

from the 110.28% ratio reported in 2019. The reduction in the ratio was mainly pushed by the increase in withdrawable deposits during the period. However, it is important to point out that in the aggregate a majority of members of DT-Saccos are still net borrowers rather than net savers, which is informed by the structural inefficiencies arising from the Saccos business model. The external borrowing loans ratio equally reduced to an impressive 3.67% in 2020 compared to a ratio of 3.88% reported in 2019, against the prescribed maximum ratio of 25%. Consequently, it is evidenced that despite the impacts of Covid-19 on the national economy, DT-Saccos did not increase their external borrowing but exercised restraint to finalise their activities with internally generated funds. Although the DT-Saccos witnessed a marginal increase on the Rate Of Returns (ROA) on the total assets which measures the rate of income that DT-Saccos can realise from their total assets to 2.65% in 2020 from 2.60% which is very commendable; this increase was slightly dimmed by the increase in the NPLs ratio which increased to 8.39% in 2020 compared to an NPL ratio of 6.15% reported in 2019.

the 2016/21 plan, the Sacco implemented the plan at 85 percent despite the Covid-19 pandemic, he said. The financial institution pays members a dividend and interest on deposits of over Sh 100 million yearly with the lion’s share being paid to Nyeri county members who are the majority. On services and product pillar, the Sacco will align its products and services to meet the current and emerging needs of its members in the agricultural sector, the small and micro-enterprises as well as established businesses. On the credit management pillar in the last strategic plan, Taifa Sacco was able to disburse cumulatively over Sh 5 billion to members in agricultural, SME, education sector, business community, salaries and pensioners as well as asset financing including land buying ventures. It, however, for the last two years, had some sectors that were adversely affected by the economic slowdown occasioned by the Covid-19 pandemic. “The Sacco sustained its financial performance growth and within the five years of the just concluded strategic management plan, its financial performance had significantly grown in terms of income (liquidity and savings),” he noted.

16 | SACCO REVIEW

AUG 20 - SEP 20, 2021

Lompasago Sacco awarded compliance certificate by regulator By Staff Reporter

ompasago Sacco is among the 25 Non Withdrawable Deposit Taking (NWDT) Saccos issued withcompliance certificates by the Sacco Society Regulatory Authority (SASRA). Lompasago Sacco Society was registered on 20th June, 1980 by the Commissioner of Co-operative Development, under Co-operative Society’s Act. The Society’s main aim is to promote the economic interests of members by encouraging thrift through the mobilization of deposits, savings and investments. Since inception, the society has undergone a series Lompasago Sacco officials pose with their compliance certificate. of transformation which include introduction of various cal Deposits, Christmas de- case loan amog others. Principal Secretary (PS) for products and services. posits, and Focus deposits. The colourful compliance Co-operatives, Mr Ali Noor The society is governed On the other hand, the certification occasion held at Ismail and Commissioner of by 9 elected Board of DirecSacco’s Loan Services in- Nairobi’s Safari Park hotel Co-operatives Geoffrey tors supported by a superviclude Development/Nor- was presided over by Cabi- Njang’ombe. sory committee that consists mal loan, Emergency loan, net Secretary (CS) for for The new regulations of 3 members. school fees loan, salary ad- Agriculture, Livestock, Fish- governing NWDT saccos, Among its savings servicvance, mobile loan, jiokoe eries and Co-operatives Pe- dubbed Regulations 2020 es include Normal Deposits, loan, welfare loan, instant ter Munya. that came into effect at the School fees deposits, Mediloan, jipange loan, and land Also in attendance was beginning of the year (Janu-

SACCO DIARY The Ins & Outs in the Industry

Egerton University Sacco Gets New CEO CPA Jane Kaimuri is the new CEO at Egerton University Sacco, a position she has now held for nine months since December 2020. She was previously the general manager at Co-op Bank Staff Sacco for seven years and ten months from March 2013 to December 2020 where she was overseeing the overall management of the Sacco. Jane also served as the Chief Executive Officer (CEO) at Kewisco Sacco for six years and a month from March 2007 to March 2013. She holds a Bachelor’s degree from Moi University and Master degree from Kenyatta University. She also has a CPA K qualification from Vision Institute of Professional Studies.

Jane Kaimuri, Egerton Sacco CEO.

ary 1, 2021) required the specified NWDT Saccos to prescribe the minimum capital and a liquidity requirements that must always be maintained by the Saccos. Other prudential standards under the new regulations include investment decisions on lending or credit operations. Munya said that through the new SASRA Regulations 2020, the government is keen to ensure transparency and strong governance structures among Saccos while securing mebers' assets and savings. “As Government we have to work tirelessly to transform the Sacco sub sector and ensure its stability. We have the responsibility to protect the savings made by members of the public in these Saccos through regulations,” said Mr Munya. The CS said through the new Sasra regulations the government is keen to ensure transparency and strong governance structures among Saccos while securing mmebers’ assets and savings.

Magarini Sand Harvesting

Co-operative Society CEO retires By Tsozungu Kombe Magarini Sand Harvesting Co-operative Society Chief Executive Officer (CEO), Mr Samuel Konde has retired from the society after attaining the retirement age of 60 years, Sacco Review has reliably established. Speaking to Sacco Review from his Kidemu village homestead in Bamba Division, Kilifi County recently, Mr Konde said he has served as the society's CEO for 10 years. He added that he has left the society while it was still progressing well in terms of service delivery to members and the general public. He has been replaced by the society’s Finance Manager, Ms. Florence Kimanthi who has taken over as the acting

Chief Executive Officer. Mr Konde urged all stakeholders to accord his successor the necessary co-operation to enable her discharge duties at the society more efficiently and effectively.

Mr Samuel Konde, Magarini Sand Sacco CEO.

HUMOUR W RLD

AUG 20 - SEP 20, 2021

SACCO REVIEW | 17

It’s hard sell for Samantha during this rough Corona times “Wama (cousin) it was hectic getting Samantha to town. The stubborn animal broke loose at the village matatu stage and getting hold of it and loading it on the lorry was a very tiresome experience” Timotheo lamented wiping foam from the corners of his mouth. I didn’t have to be told that as I could easily see how tired he was from his haggard look. “The lorry owner is also a very mean fellow. He overcharged me for the transportation cost.” Timotheo went on. Dealing with livestock movement matters is not everyone’s cup of tea and my late father could have attested to that. The hardworking old man used to run the only butchery in the village. To get his animals, he would criss-cross the hills and valleys haggling

and bargaining with livestock owners. At times, he would walk for kilometers with stubborn animals that would reach a point and refuse to move. My no nonsense father would curse, kick and cajole the poor animal till it began moving. If it was a goat, he would literally carry it on his back. Such were the hassles my father would go through to put food on our table. I can recall the days he would arrive home in the dead of the night holding one of his cut Tanga sandals in his hands .He would curse, light a fire and roast a panga till it was red hot then mend the sandals by melting and joining the parts. When we complained about the revolting smell of rubber that permeated the whole house, he would ignore us mumbling about children who

By Pascal Mwandambo don’t know what parents go through to get them a decent living. I was musing over this story and reminded Timotheo about my old man. “To succeed in any business venture, sacrifice is necessary” I reminded him. I was concerned about what would happen if

my friend Wakwitu, the butcher guy in Mavumbi town, refused to buy the poor animal and I was cork sure my landlord Makaveli would protest over the animal staying in our compound for a couple of days. Luckily, we found Wakwitu in very good moods chatting heartily with his kinsmen about the political events in his home county. Wakwitu speaks very amusing Kiswahili so when he talks of his Samsung ngalax, you need a gift of hindsight to know how stuff works. The smile on Timotheo’s face was amplified when Wakwitu agreed to accompany us to see the animal. “The cow is called Samantha. It is in good health and…’ Timotheo enthused but Wakwitu

Form groups to get loans, cassava farmers urged By Tsozungu Kombe Cassava farmers in Malindi sub county in Kilifi county have been urged to form groups in a bid to secure loans from MicroFinance Fund from the Kilifi county government to bost their farming activities. Speaking to Sacco Review in her office in Malindi town recently, Malindi sub county Cooperative Officer, Mrs Flister Moraa Ziro said that the loans from the Microfinance Fund would enable farmers to maximise cassava crop production Malindi Sub-County Co-opin the area. She stated that the erative Officer, Mrs Flister Micrifinance Fund is giv- Moraa Ziro.

en to people who are in registered groups for ease monitoring of the groups’ progress. The sub county Co-operative Officer said the Microfinance Fund is a revolving fund given to registered groups to enable them expand their businesses or activities and repay the same later so that others could also benefit from the same fund. She asked Cassava farmers to come forward and form groups in large numbers to acquire loans from the Microfinance Fund to increase their Cassava acreages as there is ready market for their crop at Rimoto Co-operative Society, a private society, at

cut him short saying he was not interested in the animal’s name but to know if it was worth buying. Timotheo winked at me and I did likewise. When we arrived home, Wakwitu looked at the animal and frowned. “Hii ng’ombe haifikishi hata kilo mia” Wakwitu said slapping the scared animal on the backside. That’s how buyers behave when they want to purchase your items at a throw away price. The gods of business were however on our side and after haggling and bargaining, Wakwitu decided to buy Samantha. I almost asked him to tell me when he slaughters the useless animal so that I don’t buy meat from his place. I doubt if a cow that has outlived better days can produce any appetizing beef.

Tezo area near Kilifi town where they can sell their Cassava crop. She said Rimoto Cooperative Society is a processing plant and deals in Starch processing among others

Farmer Thomas Randu tending his cassava crop in his farm in Malanga village, Malindi sub county in Kilifi county. Photo/Tsozungu Kombe

AUG 20 - SEP 20, 2021

18 | SACCO REVIEW

SASRA: Fariji Sacco’s total assets hit Ksh 420m

Mr Humphrey Njihia Muitaime, Chairman.

Mrs Salome Njeri Kariuki Vice Chair.

Mr Fredrick Kinuthia Mwicigi, Hon. Secretary.

Mr David Ndungu Mugoya Hon. Treasurer.

Francis Ngure Njihia CEO.

iambu County based Fariji Sacco’s total assets have hit Ksh 0.42 billion (Ksh 420 million ) as per the latest Sacco Societies Regulatory Authority (SASRA) Supervisory Report. SASRA’s Report for the year ending December 31st, 2020, also shows Fariji Sacco’s total deposits currently stand at Ksh 0.25 billion while its Gross Loans stands at Ksh 0.26 billion. The report released on August 13, 2021, further shows the Sacco has total income of Ksh 0,08 billion. The Sacco based in Githunguri town is rated number 126 out of the 175 DT-Saccos under SASRA Supervision. Apart from the 175-DT Saccos, SASRA also supervises another 300 Non Deposit taking Saccos, with the first lot of 25 Saccos having already received compliance certificates

The Report on DT Saccos was signed by SASRA chairman John Munuve and Chief Executive Officer (CEO) Mr Peter Njuguna. Fariji Sacco, whose Asset base shot up from Ksh 256 million to Kshs 343 million, in year 2019 (an increase of 33.9%,), has lately been registering impressive growth as a result of focused management . The Management has for example embarked on a major turnaround initiative that will see its members double share capital under a new 3-year Strategic Plan that is on-course. While the current share capital stands at Ksh 5,000, massive efforts are in place to it that each of its over 12, 000 members pushes the figure to Ksh 10,000. The Sacco has maintained an upward trajectory amid hostile economic and political environment. And in its quest to propel the Sacco

forward, tap into the emerging opportunities and effectively and efficiently serve its members, the board has in recent months taken deliberate efforts to strengthen the Sacco’s capacity to raise both share capital and debt equity to support the ever growing demand for credit. The Sacco has 3 operational outlets in Kirasha in Lari, Mundoro in Gatundu South and Kanyoni in Gatun-

du North as its newest outlet. It however plans to upgrade these outlets into full branch status in the coming years when granted authority by SASRA. Fariji Sacco has also improved its technology channels by introducing a new and more user-friendly mobile platform (*850#) which allows members to transact through the mobile phone. The Sacco, has fur-

ther embarked on a plan to upgrade its core banking from Microsoft Navision Dynamics 2017 to the latest version of Microsoft 365 business central. This solution will bring in more advanced modules missing in the older version. To cushion its dairy members, the Sacco has partnered with CIC to ensure their dairy cattle used to secure milk loan facilities are covered.

ij i S a c

Far

FARIJI SACCO SOCIETY LTD Count on us

MOTTO

VISION

Count on Us

The Sacco of Choice

CORE VALUES

Credit Facillities

• • • • • • •

Team WORK Professionalism Equity and Equality Integrity Accountability Corporate Social Responsbility

• • • • • • • •

Business Loan Development Loan Milk Loan Crop Loan Salary Advance Loan Emergency Loan Special Advance Fariji Cash Loan

Other Services • Cheque Discounting • Save Custody • School Fees Cheque

Kigumo Branch Cell: 0719 872 314

MISSION We exist efficiently to satisfy our customers diverse needs through provision of innovative financial services

Savings • • • • • •

Savings Account Business Account Group Account Fixed Deposit Account Junior Account Salimia Account

OUR BRANCHES Kagwe Branch Cell: 0700 252 394

Mundoro Branch Cell: 0792 790 107

Kirasha Branch

Gachika Branch

Cell: 0792 790 107

Kimende Branch Cell: 0727 935 722

Cell: 0727 935 722 Fariji Sacco members during Kagwe Tea Factory FFS Graduation.

HEAD OFFICE

Diplomat House P.O BOX 589-00216 Githunguri Cell: 0727 389 699 Email: saccokcdf@yahoo.com

AUG 20 - SEP 20, 2021

SACCO REVIEW | 19

COAST

Dairy farmers urged to join co-operatives By Michael Oduor Dairy farmers in Werugha, Wundanyi Sub-county, Taita Taveta County have been urged to register themselves in the different coioperative societies to benefit from the different initiated government projects and those from other non-governmental organisations. Speaking to farmers in Werugha, the County Executive Committee Member (CECM) in charge of Agriculture, Livestock, Fisheries and Irrigation Davis Mwangoma reiterated the need to invest in dairy farming using quality feeds that will ensure increased milk production. "Dairy farming requires farmers to have knowledge on how to take care of the livestock in order to improve milk production. Milk production needs hay, silage and other nutritious animal feeds," said Mwangoma. He urged residents to take good care of the cooling plant,

middle men who exploit them using the underlying challenges in the milk production process leading to low profits and losses," he added. However, the farmers lead by the chairperson of Ngache Co-operative Simingtone Mwadime decried the high cost of animal feeds, one of the challenges they say may make them sell their milk at high prices. "Dairy meal price was raised and currently County Executive Committee Member (CECM) there is no grass to feed our livestock. There is a for Agriculture, Livestock, need to have subsidized Fisheries and Irrigation dairy meals so that farmDavis Mwangoma. File photo ers can be able to increase milk production. The rise adding that with time it will in the cost of animal feed not only be the cooling point may be the reason for the inbut it will develop to be an increased price for the milk we dustry that will serve residents produce," he stated. in the region. The milk cooling and stor"There is need to have age plant is set to start benefitdairy farmers training in or- ing the farmers from five vilder to improve milk produc- lages soon. tion and prevent farmers from

Women, youth asked to go for Uwezo fund loans

Mombasa County Co-operative Director Nelson Nyoro (left) who was the Chief Guest chats with Mombasa Port Sacco Supervisory Chairman Harry Arigi during the ADM. By Tsozungu Kombe Women and youths in Mombasa county who are in registered groups have been asked to co-operate fully and acquire loans from Uwezo fund to boost their businesses. Speaking in Mombasa town, Mombasa county Co-operative Director Nelson Nyoro advised the youth to

take advantage of the funds provided by the government to establish different development projects in the area. Nyoro added that engaging in business would prevent the youth from engaging in criminal activities. He said the Co-operative Movement plays an important role in the country as it uplifts the living standards of people.

CENTRAL

Boda boda Sacco Transforms Youth in Murang’a Meet George Mungai Njoroge. He is the vice chairperson of a Bodaboda Sacco in Murang’a County. He shares with Malachi Motano how the Sacco that was formed only five years ago has become a source of inspiration after transforming the lives of its members who are majorly the youth. “ It is high time for youths to understand that operating a Boda boda business is work like any other and should be taken with the seriousness it deserves. Our Sacco is an example that Boda boda operators can prosper just like in any other profession, they only need to organise their earnings,” he says. From a humble beginning, the Sacco that today boasts of about 100 members has enabled the youth to improve their livelihoods and earnings from their savings. The Sacco came into the limelight in the 2019 financial year when it made profits amounting to Sh1.1 million. “Every individual member took home dividends of not less than Sh3,500 while others earned Sh8,000 depending on one’s contributions. The members save at least Sh500 every week, totaling to Sh2 million every month and from the contributions, members are able to access cheap loans

that have enabled them to educate their children and support their families. In return, the Sacco makes profits from the interest charged on the loans. Investment According to the Vice Chairman, the Sacco is also engaging in other income-generating activities that complement their profits. “We have invested in Bodabodas and Tuk tuks. We have also procured a two acre parcel of land valued at Sh1.2 million,” says Mr. Njoroge. He acknowledges that the Sacco has also established a welfare programme that caters for members who fall sick or lose their lives. The vice Chairman reports that the Sacco also has previously issued loans amounting to Sh5.6 million to its members. “As a result of all these investments, most members have been able even to expand their finances by establishing businesses

for their spouses. Others have been able to construct

About 100 members

Dividends of not less than Sh3,500 We have invested in Bodabodas and Tuktuks. We have also procured a two acre parcel of land valued at Sh1.2 million - Mr Njoroge.

their own homes and procure Tuk tuks through loans from the Sacco,” he says. Testimonies “I have now upgraded from a Bodaboda to a Tuktuk. I joined the sector 5 years ago and immediately joined the Sacco. After saving enough money through the Sacco, I acquired a loan that helped me to buy a Tuk tuk which gives me more earnings. Joining a Sacco encourages one to save his earning while providing an opportunity to access cheap loans,” says Emmanuel Wanyoike, a member. Kamau Kang’e is the Chairperson Kabati business community. He says the area is now safe after the operators consolidated themselves into a Sacco. He says the Sacco is able to control its members through its internal regulations which has worked for the benefit of the community and also works closely with security agents which helps to flush out crimi-

nal elements. “The unity of the operators has made the area unconducive for criminals as they are easily flushed out,” he adds. “We are so proud of them because they have demonstrated that it is possible for youths to set goals and accomplish them. It is a rare occurrence for youths and especially Boda boda operators to come together in such a platform to empower each other,” says Kandara OCPD Paul Wambugu. He adds, “They seem to see very far. I attended one of their annual general meetings and learnt that they had vision to ensure all members had licences and procure Tuk tuk, and they have done all that and managed to increase their profits,” he explains. He asked the youths to reach out to more operators and encourage them to join Saccos instead of operating individually. “The ones that operate singly are the ones that give us headaches in terms of security,” the OCPD said.

20 | SACCO REVIEW

ADVERTISING FEATURE

AUG 20 - SEP 20, 2021

SACCO REVIEW | 21

FOCUS ON NEWLY LICENSED SACCOS CERTIFICATION IN PHOTOS

Mhasibu Sacco officials receive their compliance certificate from Agriculture, Livestock, Fisheries and Co0operative CS Peter Munya at Safari Park Hotel, Nairobi recently .

Njiwa Sacco official (centre) receives SASRA compliance certificate from Agriculture, Livestock, Fisheries and Cooperative CS Peter Munya and SASRA Chairman.

Ubora Sacco official (centre) receives SASRA compliance certificate from Agriculture, Livestock, Fisheries and Cooperative CS Peter Munya and SASRA Chairman.

Biblia Sacco official (centre) receives SASRA compliance certificate from Agriculture, Livestock, Fisheries and Cooperative CS Peter Munya and SASRA Chairman.

UASIN GISHU

Bronjo Diaries Co-operative Society revived four years after shutdown

By Rosemil Oduor Four years after it closed its doors due to management challenges Bronjo Diaries Co-operative Society has been revived. The society started in 2006 as a self-help group called Bronjo Self-help Group with 200 farmers. They each contributed Sh4, 500 to buy a one acre piece of land at Sh1 million where their operating headquarters was established. The progress was good and years later, in 2014, they registered as a co-operative: Bronjo Diaries Cooperative Society. Between 2014 and 2016, business within the society was booming and they collected be-

tween 3000-4000 litres of milk daily. Misfortune struck and due to challenges, the society collapsed .Members of the society experienced lots of difficulty as they could not find markets for their produce. They then sat down and decided to revive their old society. John Kipketer, the current chairman of the society alongside other eight members recruited 80 members who registered with Sh1, 000. There has been progress made since its revival because currently, the society collects 400 litres of milk daily up from 85 litres last year. Kipketer said that they

were prompted to come up with a solution so as to stop dealing with middlemen who were making huge profits from the hard work of the farmers. “We are currently buying milk from 40 famers at Sh35 then sell it at Sh39 per kilo. We have come up with strategies to ensure we do not shut down again amongst them seeking partnerships,” he stated. Bronjo Co-operative Society has made an agreement with Kenya Co-operative Creameries (KCC) to buy their milk. It has also partnered with the Department of Co-operatives in Uasin Gishu County for artificial insemination services.

The co-operative has put plans to help famers secure loans from banks for them to expand their dairy farming, buying motorbikes to be used for door to door milk collection and being able to produce their own dairy meals. Farmers are also receiving training from experts in dairy production on ways of increasing milk production. Currently, the biggest challenge the co-operative has is having farmers who want to be paid immediately after delivery. Since that is impossible, the famers resort to middlemen who pay them Sh7 less than what the co-operative offers.

The co-operative has put plans to help famers secure loans from banks for them to expand their dairy farming, buying motorbikes to be used for door-to-door milk collection and being able to produce their own dairy meals.

AUG 20 - SEP 20, 2021

22 | SACCO REVIEW

EASTERN MERU

KITUI

Alarm as coffee thieves hit factories By Our Reporter Security agencies in Meru County have raised the alarm after three coffee factories lost more than 360 bags of coffee valued at Sh5.8 million in the last six months. Police now suspect insiders could be colluding with criminals to have the coffee stolen. This is because most of the incidents are said to happen immediately after members meet and decide on when to deliver the coffee for milling. Security agencies now agree with this theory saying the manner in which the theft is executed is suspect. Meru County Commissioner Karuku Ngumo said the theft has left small-scale farmers grappling with poverty from losses running into millions of shillings. Speaking recently during a meeting attended by chairpersons from various Coffee Societies and coffee factory leaders in Meru, Ngumo noted that three factories have lost 364 coffee bags worth Sh5.8 million to theft this year. These are the Kieru Factory which lost 234 coffee bags worth Sh3.1 million, Tigania Factory where robbers stole 80 coffee bags worth Sh2 million and Kiambogo Factory which lost 50 bags worth Sh700, 000. Mr Ngumo accused the coffee factory managers and committees of employing incompetent watchmen and failing to liaise with police espe-

Meru County Commissioner Karuku Ngumo addressing the media. Photo/Our Reporter

cially when coffee beans are dry and ready for sale. “Rampant coffee theft started in 2019 in this region and since I came in January this year three factories have been raided. I may not be able to speak on what happened before I came to this region, but I know what it means to farmers to lose their coffee because I am a farmer too”, Ngumo said. The commissioner authorized Deputy County Commissioners to vet all coffee factory managers and watchmen serving in various factories in the county. Ngumo cautioned coffee factories against storing large quantities of coffee beans for a long period when ready for sale.

The Commissioner urged coffee managers to inform the Officer in Charge of Station (OCS) whenever a factory has a large quantity of coffee beans waiting to be sold. According to Ngumo, informing the OCS will enable securing of the coffee and will also hold the officer in charge accountable if the coffee is stolen. Mr Ngumo also called on the managers to ensure coffee factories are well protected through employing capable watchmen, erecting security fences, installing CCTV and security lights among other security measures. Meru County Police Commander Nyaga Muchungu called on coffee farmers to ensure people representing them as leaders are reliable and honest. Muchungu asked the coffee managers to ensure people protecting the factories as watchmen are capable and skilled. Meru County Co-operatives Director Mugambi Sandi noted that coffee factories have also been losing land to grabbers. Meru Central Coffee Union Chairperson Ephantus Majau called on farmers to unite and ensure their factories are safe. Majau also asked coffee managers to ensure farmers and the OCS are aware when the coffee is in stores as a way to curb theft. Meru County has 144 coffee factories. The county also has 47 Sacco societies under the Meru Coffee Co-operative Union, with a membership of over 80,000 farmers.

Sacco puts up chicken abattoir By Boniface Mulu The Kitui County Poultry Traders Savings and Credit Co-operative Society Limited has constructed a chicken abattoir at a cost of Sh4.2 million. The abattoir is at the Wikililye market in Katulani region of Kitui County. The money spent on the project was part of the Sh9.8 million funding by the National Agricultural and Rural Inclusive Growth Project (NARIGP) channelled to the Sacco. Mr Mutie Ngolo, the chairperson of the society said NARIGP is one of the state corporations under the Kenya’s Agriculture, Livestock and Fisheries Development Ministry. Ngolo announced that the Sacco has procured processing machines for the factory at a cost of Sh2.6 million from the funding, noting that the factory has the capacity of slaughtering 1,000 chickens per day. He said this during the Sacco’s poul-

Kitui Teachers Sacco Chairman, Reverend Augustus Munuve.

try farmers’ meeting held at the Africa Brotherhood Church (ABC) in Kitui town where Francis Mutuku, an official from Kitui County Trade, Industry and Co-operative Development Ministry was the chief guest. Ngolo said that in 2019 the Sacco also received a Sh1.4 million grant from NARIGP that enabled them to recruit a total of 5,845 poultry farmers within Kitui County. He further added that the 70 member Sacco started in August 2018 with 40 members from Kitui County. “The Sacco has conducted a market survey in and outside Kitui County. You will enjoy the factory’s benefits because you will get annual profit for your supplies.” he said and urged farmers to take poultry farming seriously to ensure they satisfy the market. In his speech, Mutuku said that the only way through which the farmer can benefit is by joining the Kitui County Poultry Traders Sacco. The officer said that the Sacco has laid down good plans for the poultry farmers. Bernard Ng’etich, an official from the Co-operative Bank of Kenya Kitui branch, who also addressed the event, told the poultry farmers that they have arranged with the Sacco to have a model where the farmer can be paid by the bank through the Safaricom’s MPESA service after delivery of chicken to the Sacco. The farmers led by Tabitha Singa and Joshua Kaloki, said they will support the abattoir by supplying it with chickens.

Sacco loan book grows fastest amidst Covid-19 hardships By Sammy Chivanga Savings and Credit Cooperative Organizations (Saccos) members tapped Sh54.19 billion additional loans last year on the back of coronavirus disruptions that hurt incomes for households. The new credit saw the loan book of Deposit-Taking (DT) Saccos rise by 13.41 percent to Sh473.74 billion from Sh419.55 billion, being the fastest jump in four years. Only in 2016 was the rise (15.3 percent) higher than this. Sacco Societies Regulatory Ng'arisha Sacco delegates during a recent ADM. Photo/ Authority (SASRA) report says the Tony Wafula finding means that Saccos continued while microfinance banks cut their The increased pace of lending by to lend to their members in the same loan book by 3.2 percent to Sh48.85 Saccos was despite a deterioration in way they did in the previous years billion. the non-performing loans (NPLs) radespite the impact of Covid-19 PanPart of the motivation to lend tio from 6.15 percent in the previous demic on the national economy. more was the recovery in the pace of year to 8.39 percent in 2020. “The increase in the gross loans’ deposits mobilization—a key source Actual gross NPLs jumped from portfolio shows that notwithstanding for lending. Sh25.79 billion to Sh39.86 billion, the adverse effect of the Covid–19 Deposits grew at 13.41 percent highlighting the impact of disrupted pandemic and the associated govern- to reach Sh431.46 billion, marking income flows for households in the mental restrictions, the DT-Saccos the fastest pace of growth in this key pandemic period. continued to advance loans to their lending resource since 2016. The rise in the portion of credit members,” says SASRA. “These deposits formed the bed- which had gone for at least 90 days Saccos were a safe harbor for rock of sources of funding of the as- without being serviced was directly millions of members seeking loans sets and shows that notwithstanding attributed to the impact of the panfor survival. At 13.41 percent, the the impacts associated with the Co- demic which resulted in delay of reloan book of Saccos expanded at a vid-19 pandemic, DT-Saccos were payments of some loans advanced to faster pace than that of banks. still able to mobilize deposits at a the members particularly among the Commercial banks’ loan book near similar rate as the growth in their non-employer-based Saccos. grew by 8.36 percent to Sh3 trillion assets’ portfolios,” notes SASRA. This was evidenced from the in-

crease in the substandard, doubtful and loss categories of the loan portfolio, which together constitute the NPLs portfolio. Many firms were laying off workers, cutting salaries and sending others on unpaid leaves in an environment of falling revenues, making it difficult for some Sacco members to keep up with loan obligations. Economic fallout saw the number of dormant members in Saccos surge by 79.55 percent to 1.37 million. The pace of growth in dormant membership was the fastest in recent years and came on the back of economic fallout that hit Kenya after Covid-19 set in mid-March last year. The Sacco members who are no longer active savers now account for a quarter of the 5.4 million total members in deposit-taking (DT) Saccos, according to Sacco Societies Regulatory Authority (SASRA) report. However, SASRA analysis showed a total of 66 DT-Saccos had their NPLs below five percent, out of which 30 had their NPLs below two percent. This implies that almost 98 percent of their loans were generally performing, giving Saccos the impetus to lend more. SASRA says Saccos demon-

strated resilience by cutting the allowance for loan loss reduced from 26.95 percent to 24.78 percent. “This shows that a majority of the Sacco members continued to promptly service their loan repayments during the period and very few of the loans were not being serviced in accordance with their contractual obligations,” said SASRA. NPLs ratio tracks the portion of total loans that has remained unpaid for at least three months and a higher figure points to customers struggling to keep up with repayments. The latest NPL ratio is above the maximum of five percent that is prescribed by the SASRA but better off than that of banks. DT-Saccos have consistently been able to register a lower nonperforming loans rate compared to the commercial or the microfinance banking institutions. For instance, the 8.39 percent NPLs ratio in Sacco movement was still below the 14.5 percent and 26.6 percent that was reported by commercial banks and microfinance banking institutions. Saccos usually face a delicate balance between stability and loaning to members given that societies run on a multiplier model that allows members to access loans of up to three times of their savings.

SACCO REVIEW | 23

AUG 20 - SEP 20, 2021

NAIROBI

Govt blames co-operatives for slow uptake of Coffee Cherry Fund By Malachi Motano Blame has been shifted to the coffee co-operative societies for hindering plans by Kenya Planter Co-operative Union (KPCU) to disburse the Sh3 billion Coffee cherry funds. This is due to the continuous trend by the co-operative societies of wooing farmers with loans. Statistics at the Ministry of Agriculture show that out of the Sh3 billion cherry fund, only Sh50 million has been taken up by coffee farmers in the last one year, since August 2020 to date. “Coffee co-operatives are holding farmers hostage by persuading them to take their loans, limiting the absorption of the Sh3 billion coffee cherry funds which is really frustrating efforts by the Kenya Planters Cooperative Union (KPCU) to disburse the fund 100 per cent,” said Peter Munya, the Cabinet Secretary for Agriculture, Livestock and Cooperatives. “These co-operatives have been convincing growers to take their loans as opposed to the Coffee cherry fund which in turn, they recover from the sale of the growers produce. They (Co-operatives) block the absorption of coffee cherry fund,” he added. During the said period, Nyeri county is leading in the disbursement where farmers have taken

Agriculture CS, Peter Munya at New KPCU Dandora mills. Next to him is Henry Kinyua, New KPCU Chairman. up to Sh23 million, followed by Meru, at Sh10 million, and Muranga at Sh3.8 million. According to co-operative society officials, there was a slow uptake by small scale farmers especially in Central Kenya where coffee farmers were not able to borrow from the government’s advance levy fund. While the government sets up the revolving fund to give farmers cheap loans as they wait for their earnings from coffee marketers, farmers are apprehensive about

what will come after getting the money. Amongst their fears is losing the free will on who gets to mill and market their produce. “Getting the funds, which are being channelled through the New Kenya Planters Co-operative Union, will force farmers to get tangled with the governmentbacked miller, hence monopolizing it and stifling competition,” said Mukua Chiira, an official at the Ndaroini Co-operative Society in Mathura. Mukua explained that the

main reason why most farmers are yet to borrow these funds is due to the believe that channelling of the funds through New KPCU is aimed at giving monopoly to the government-sponsored mill. The New KPCU came up after its predecessor was liquidated owing to decades of mismanagement of farmers’ funds. CS Munya has been holding meetings with coffee co-operative officials in coffee-growing areas to assure farmers that there are guaranteed safety of funds being disbursed by the New Kenya Planters Cooperative Union. Munya maintains that the government has successfully weeded out cartels who had looted the previous union, therefore, rendering it bankrupt. He assures that the New KPCU is fully under

‘

The government will not force any farmer to market their coffee produce through KPCU. It will only serve willing and interested farmers. - CS Munya.

the control of the national government and that no single shilling is going to be lost. According to the CS, the new KPCU has the capacity to mill all coffee grown in the country in its Sagana, Meru and Dandora coffee mills even though the government will not be pushing farmers to mill or market their coffee through KPCU. He said that any engagement will be on a voluntary basis. “The government will not force any farmer to market their coffee produce through KPCU. It will only serve willing and interested farmers,” he said. Early in the year Munya indicated that government was considering expanding the Sh3 billion coffee cherry funds to offer additional services in the sector following a slow uptake by farmers. He explained that even though the funds are acquired through loans, it is sufficiently large and can be utilised for other activities within the sector. “I believe it is large enough and can be utilised for other things, but we still want it to remain a revolving fund to help stabilise the coffee sector. We do not want to take it to risky businesses,” stated Munya.

Saccos urged to stop delaying members’ refunds By Malachi Motano

Boresha Sacco Eldoret Branch Manager Mr Alfred Chelimo (centre) with a branch official receive a trophy from Uasin Gishu Governor Jackson Mandago (right) during the 99th Ushirika Day celebrations on July 3, 2021. Photo/Dennis Bett

Sacco Society regulatory Authority (Sasra) has asked savings and credit cooperative societies (Saccos) to quickly refund members who quit their deposits. Sasra chairman John Munuve said members always feel frustrated when they want to liquidate their money. “In a very fast evolving technologically driven financial sector in Kenya, impediments that make exit from Saccos tedious only serve to drive away potential members, who will not hesitate to invest their funds in the many other available alternative financial institutions,” said Munuve. He said that the authority will institute stiff regulatory sanctions against saccos and officers found to unreasonably delay refunding members their deposits and in the process tarnishing the reputation of the entire subsector. He encouraged saccos to adopt better mechanisms that would quickly and efficiently resolve member complaints, particularly those seeking refunds of their deposits or sav-

ings after exiting from membership. “Saccos must make it easy for exiting members, just as it has made it easy for joining members. This will endear them to more membership. Doing so is also consistent with the International Co-operative Principle of free entry and free exit.” Munuve said. Sasra reckoned that saccos are having difficulty attracting younger people because they are not competing well with digital alternatives which are easy to invest in and easy to exit. In the 2020 sacco supervision annual report, the Chairman indicated that 2021 will see the authority not only ensuring the overall stability and soundness of the DT-Saccos system but will also be on-boarding the NonWDT-Saccos, which for the first time will be subjected to a prudential regulatory framework. He said in conformity with the key thematic visions of its Strategic Plan 2018-2022, the authority will continue to put emphasis on policy, legal and administrative initiatives aimed at boosting public confidence and trust in Saccos.

24 | SACCO REVIEW

AUG 20 - SEP 20, 2021

Co-op Bank partners with Enwealth to launch Kenya’s first pension-backed mortgage

o-operative Bank of Kenya, in partnership with Enwealth Financial Services Limited, has launched a Pension-backed Mortgage loan facility for members of pension schemes. The new facility is expected to enable the over 3 million members of pension schemes in Kenya, who otherwise would have found it difficult to raise enough funds to buy a home, to qualify for a mortgage. In addition, the facility will enjoy an extended repayment period of up to 20 years, subject to the retirement age of the borrower. The new mortgage is the first such facility in

Jacquelyne Waithaka - Director, Corporate and Institutional Banking at Co-op Bank and Peter Waiyaki - Board Chair, Enwealth Financial Services Limited, sign a partnership agreement to launch the Pensionbacked Mortgage Loan at Co-op Bank’s Property Hub in Nairobi. Looking on are Head of Mortgage Finance at Co-op Bank Chris Chege (left) and Simon Wafubwa, Managing Director, Enwealth Financial Services Limited.

Dr. Gideon Muriuki, Group CEO Co-operative Bank.

the market, and has been made possible by the recent changes to the law, specifically the Retirement Benefits (Mortgage Loans) Act, Regulations Amendment 2020 that now allows members of pension schemes to utilise up to 40% of their accrued pension benefits as downpayment to buy a home. This facility is targeted at pension scheme members whose 40% of their

pension benefits cannot cover the full cost of buying a house. In those circumstances, a member will approach the Bank to access a credit facility to cover the difference. With this facility, a pension scheme member can purchase a developed property anywhere in Kenya with a ready title deed or certificate of lease, provided that the house is a residential property for

the member’s own occupation. The application can be done by an individual pension scheme member or jointly with a spouse thereby consolidating their pension benefits to access a higher amount. Speaking during the launch event held at the Co-op Bank Property Hub, the Director Corporate Institutional Banking at Co-op Bank, Mrs Jacqueline Waithaka, lauded the partnership between Co-op Bank and Enwealth Financial Services that brought about the new home ownership solution, adding: “This product is a deliberate response by the bank in support of the Government’s affordable housing pillar of the Big Four Agenda. We are excited to pioneer this innovation that will enable a wider pool of Kenyans to realize their dream of owning a home.” Speaking at the launch,

the Chief Executive Enwealth Financial Services, Mr Simon Wafubwa said: “Owning a home and having an adequate income at the point of retirement are most critical pillars for a lifetime of financial well-being and dignity. We are excited to partner with Co-op Bank to make available this innovative home-ownership solution that gives our clients access to affordable mortgages in line with the new Retirement Benefits regulations.” Additionally, the Chairman of Enwealth, Mr Peter Waiyaki reiterated the need for innovative social security financial products that are responsive to the needs of the times as a way of achieving economic resilience, noting, “The pessimist may complain about the wind while the optimist would expect it to change, but through strategic synergies, the leader adjusts the sails.

This partnership between Enwealth and Co-op Bank seeks to adjust the sails for the mortgage landscape in the country.”

Owning a home and having an adequate income at the point of retirement are most critical pillars for a lifetime of financial wellbeing and dignity. We are excited to partner with Co-op Bank to make available this innovative home-ownership solution that gives our clients access to affordable mortgages in line with the new Retirement Benefits regulations. -CEO, Enwealth

SACCO REVIEW | 25

AUG 20 - SEP 20, 2021

CS Peter Munya speech during Ushirika Day Celebrations on July 3rd 2021 at Safari Park Hotel, Nairobi.

he Chairman, National Ushirika Day Celebrations Council, Chairmen, Cooperative Societies & Unions, Chief Executive Officers, Distinguished Guests, Ladies and Gentlemen. It gives me great pleasure to join co-operators here in Kenya and globally in marking this important day. The United Nations decided that every year on the first Saturday of July be designated as Global Co-operatives Day. We have religiously observed this day annually in what has become to be popularly known as Ushirika Day here in Kenya. Let me thank the National Ushirika Day Celebrations Council from the outset for ‘Kenyanizing’ this day. It feels very much at home that way as we observe this 99th Ushirika Day Celebrations virtually. This has been necessitated, as you already know, by the global COVID -19 pandemic. The theme for this edition is “REBUILD BETTER TOGETHER”. Just as the old Swahili maxim says ‘umoja ni nguvu na utengano ni udhaifu’, we must work together as we rebuild this sector. This follows the ravages occasioned by the pandemic that have had unprecedented impact on all aspects of our lives the world over. When we work together, we shall be successful in our undertakings. Mitigating measures have been rolled out rapidly including the speedy production of vaccines. We have been affected directly and indirectly in one way or another through the disruptions from this global pandemic. I urge all co-operators to embrace all measures that have been put in place including vaccination. Dear Co-operators, during the on-gong COVID-19 pandemic period, my Ministry through the State Department for Co-operatives joined other wellwishing Kenyans in providing care to other Co-operators in line with one of the principles of Cooperatives of showing Concern for members of our Community. We constituted the Co-operatives Coronavirus Responsive Committee (CCRC) that mobilized the Co-operative Movement’s collaborative support. It supported vulnerable co-operative members and their families with over 500, 000 survival kits. I wish to congratulate the committee for a job well done. I have also been informed that, during this year’s celebrations, various co-operatives will showcase how they are managing the COVID -19 crisis with

solidarity and resilience. The focus will be on: Human-centred business model, sustained Co-operative values of self-help and solidarity and ethical values of social responsibility and concern for the community and on how they can amongst others to reduce inequality, create shared prosperity, and respond to the immediate impacts of COVID -19. Ladies and Gentlemen, I need not remind you the importance of Co-operatives and the role they play in the Socio-economic development of our country. Co-operatives cut across all sectors of the economy and are critical in the contribution of equitable incomes. Some of their activities include food production, value addition, savings mobilization, financial deepening and provision of affordable decent housing. Cooperative values and principles which are the pillars of the co-operative spirit have withstood the test of time and are resilient against any form of economic ideology. The co-operative business model is the best vehicle for supporting the low income and middle-income segment of our population so as to minimize the levels of high poverty. This resonates well with the Government Policy of promoting financial inclusion and access by targeting majority of the population to participate in the formal market economy. As you are already aware, the co-operative philosophy is anchored on the co-operative principles. They are the guidelines through which co-operatives regulations and practices are derived from. They are: open and voluntary membership, democratic member control, economic participation, THEME “REBUILD BETTER TOGETHER"

The Government has strengthened the newly established Kenya Mortgage Refinance Company (KMRC), a National Treasury-backed lender, which will offer banks and SACCOs cash for onward lending to households and offer Zero Stamp duty to first-time homeowners. - CS

autonomous and independent, education, training and information, co-operation amongst cooperatives and concern for the community. My Ministry recognizes that Co-operatives are better placed to bring about equitable development in addition to social cohesion and continuity in communities. Co-operatives possess the institutional capability to realize government intentions for sustainable development. Mr. Chairman, since independence in 1963, the National Government through policy formulation and legislative framework has continued to support the growth and development of the co-operative movement as a significant economic actor. We recently completed the formulation of the National Co-operative Policy (NCP). The objective of this policy is to promote competitive and sustainable cooperatives for socio-economic development. Challenges facing the co-operative movement have been identified. The policy advocates for a more proactive engagement between the co-operative sector and stakeholders. Last but not least, it delimitates the role of the two levels of Government in co-operative development through growth and development of co-operatives in Kenya. You will recall that, I recently appointed a Taskforce to help operationalize the National Cooperative Policy and review the Co-operative Societies Act and the Sacco Societies Act. This taskforce will look at the entire Co-operative structure; self-regulation to improve co-operative governance; streamlining of finance and investment procedures; co-operative research, education and training; youth and gender; and environmental concerns amongst others in the co-operative sector. Ladies and Gentlemen, the Government has strengthened the newly established Kenya Mortgage Refinance Company (KMRC), a National Treasurybacked lender, which will offer banks and SACCOs cash for onward lending to households and offer Zero Stamp duty to first-time homeowners. I wish to encourage Cooperatives and Co-operators to take advantage of this noble initiative. The Kenya Mortgage Refinance Company will offer fixed rate long term loans initially at concessional rates to financial institutions. These loans will be offered to participating financial institutions to finance affordable housing loans as per the Government’s Big

Peter Munya CS, Agriculture, Livestock, Fisheries and Co-operatives.

Four Agenda. Affordable housing loans are capped at 4 million shillings within the Nairobi Metropolis (Nairobi, Kiambu, Machakos and Kajiado) and 3 million shillings elsewhere and to be extended to borrowers with a monthly income of not more than KES. 150,000. Dear co-operators, the Ministry is cognizant of the challenges faced by co-operatives such as weak governance, high cost of finance, inadequate market access, delays and nonremittance of deductions by employers, massive investments in non-core activities, over dependence on external funding, nonperforming loans, obsolete technology, cybercrime & fraud; low capital base; low participation of youth and women and inadequate human resource capacity among others. Several initiatives and reforms have been undertaken over the years to address these issues. Some of the recent reforms being undertaken by my Ministry are:- We have finalized the process of reviewing the National Co-operative Policy and we are at the tail end of the Parliamentary process, the 2020 Regulations for Non-Deposit Taking (NDT) SACCOs have been operationalized covering Non-Deposit Taking Saccos with over 100 million deposits, diaspora co-operatives and Saccos operating on virtual platforms, comprehensive review of the Co-operative Societies Act and the SACCO Societies Act is under way, automation of services through Cooperative Management Information System (CMIS) to ease linkages with the counties and Co-operative societies in order to enhance service delivery, facilitation of the establishment of Sacco Societies Fraud investiga-

tion unit to combat cybercrime, fraud and misappropriation of members’ funds, reforms in the coffee cooperatives to improve production, marketing structures and payment to farmers, facilitation of the establishment of a Central Liquidity Fund (CLF) and Shared Services platform to provide short term financing and enable co-operatives to participate in the National Payment System. This will restore public confidence and investors’ trust in co-operatives, facilitate establishment of the Kenya Society for Professional Co-operators (KSPC). This is expected to enhance professionalism in co-operatives by setting minimum operational and ethical standards. This will also foster leadership and management capacities within the co-operative sector to deliver to members' satisfaction and progressive recovery of all outstanding SACCO dues as provided for in the Co-operative Societies Act. As I conclude, let me reiterate that the National Cooperative Policy recognizes Co-operatives as vehicles for realization of Kenya Vision 2030. It also identifies co-operatives as private organizations that serve public good. The two levels of Government shall continue to work closely with the Co-operative Alliance of Kenya (CAK) among other stakeholders to promote self-regulation. It is expected to provide direction on the way the co-operative sector is governed in order to achieve socio-economic development. Finally, let me thank the National Ushirika Day Celebrations Council for organizing this important event in the calendar of co-operators. Asanteni

26 | SACCO REVIEW

FOCUS ON UPPER EASTERN DT SACCOS

AUG 20 - SEP 20, 2021

SASRA: Centenary Sacco total assets hit Kshs 1.17 Billion

Centenary Sacco Chairman Michael Mbaabu (left), receives one of the sacco's trophies from Meru County Governor, H.E. Kiraitu Murungi, who was the Chief Guest at the 2019 Ushirika Day celebration.

Meru County based Centenary Sacco’s total assets have hit Ksh 1.17 Billion as per the latest Sacco Societies Regulatory Authority (SASRA) Supervisory Report. SASRA’s Report for the year ending December 31st, 2020, also shows Centenary Sacco;s total deposits currently stand at Ksh 0.91 Billion while its Gross loans stands at Ksh 0.94 Billion. The Report released on August 13, 2021, further shows the Sacco

has total income of Khs 0.14 Billion. The Sacco based in Meru town is rated number 88 out of the 175 DT-Saccos under SASRA Supervision. Apart from the 175-DT Saccos, SASRA also supervises another 300 Non Deposit taking Saccos, with the first lot of 25 Saccos having already received compliance certificates. The Report on DT Saccos was signed by SASRA chairman John

Munuve and Chief Executive Officer (CEO) Mr. Peter Njuguna Centenary Sacco has for some years maintained its winning streak. The Society was for example during the last public Ushirika Day fete in 2019 before Covid-10 landed, feted for being the Sacco with the highest promotion of education and training services (FOSA category) to members in Imenti North Sub-County, Meru County. The Sacco also bagged first position trophy for the highest gender balance in the Sub-County. Centenary Sacco CEO Benson The financial institution has M. Mugiira. been on a rapid growth trajectory CENTENARY SACCO SOCIETY fuelled by quality P.o Box 1207 60200 – Meru Meru: 0715 467 290 Chuka: 0714 974 287 services and prudent Kinoro: 0732 880 930 Mutuati: 0789 406 551 www.centenarysacco.org E-mail: info@centenarysacco.org management. Centenary Sacco Mission: To mobilize resources for all, with an aim of promoting our people economically Chief Executive Our irrespective of their economic status and background. Vission: To become an outstanding credit union in the country in mobilization of resources and Officer (CEO), Mr Our efficient provision of credit facilities at very competitive rates. Benson Mugiira PRODUCTS AND SERVICES noted that the SociFOSA LOAN PRODUCTS ety continues to be SAVINGS PRODUCTS - FOSA ♦ Classic Loan (a) Salary account compliant to all reg♦ Salary Loan (b) Savings account ♦ Salary Advance ulations as provided (c) Jifunze junior account ♦ Salary Overdraft (d) Fixed deposits account ♦ Jifunze Junior Loan for by SASRA. (e) Group/institutions account ♦ Kamua Pesa Loan “We are com♦ Vuna Majani Advance FOSA UTILITY SERVICES ♦ Vuna Majani Loan mitted to ensure ♦ M-pesa PayBill Services ♦ mobile banking services necessary measures BOSA LOAN PRODUCTS ♦ ATM Services - Saccolink Visa Card ♦ Instant Loan and controls are in ♦ Personalised Cheque Books ♦ Normal Loan ♦ Mobile App- X-Mobi ♦Asset Finance place to enhance the safety and security Centenary SACCO aims at bringing affordable credit of members' funds,” facilities, credit management skills and drive its members to economic prosperity from whatever economic status. noted Mr Mugiira.

This supplement focusing on Saccos in Upper Eastern region continues in the next issue

MKU Sacco awarded compliance certificate as NWDT Sacco By Staff Reporter MKU Sacco is among the 25 Non Withdrawable Deposit Taking (NWDT) Saccos issued with compliance certificates by the Sacco Society Regulatory Authority

Co-operative PS, Ali Noor Ismael

(SASRA). The colourful occasion held at Nairobi’s Safari Park hotel was presided over by Cabinet Secretary (CS) for for Agriculture, Livestock, Fisheries and Cooperatives Peter Munya. Also in attendance was Principal Secretary (PS) for Co-operatives Mr. Ali Noor Ismail and Commissioner of Co-operatives Geoffrey Njang’ombe. The new regulations governing NWDT saccos, dubbed Regulations 2020 that came into effect at the beginning of the year (January 1, 2021) required the specified NWDT Saccos to prescribe the minimum capital and a liquidity requirements that must always be maintained by the Saccos. CS Peter Munya (left) awards a compliance certificate to MKU Sacco official (centre).

AUG 20 - SEP 20, 2021

SACCO REVIEW | 27

Bingwa Sacco unveils strategic plan to fine-tune service delivery

Francis Muriithi, Chairman. By Malachi Motano Bingwa Savings and Credit Co-operative Society (Sacco) is committed to be the leading sacco in offering viable financial services to members by ensuring provision of excellent products and sustainable socio-economic growth. As a result of the great vision, the society has again developed a new five years strategic plan for 2021-2025 that focuses on ensuring the Society’s continuous growth With the new strategic direction, the Sacco, among other things, is aiming at growing membership by 15 percent, increase loan portfolio by 10 percent, grow non-withdrawable deposits by 15 percent and share capital by 15 percent annually. As at the end of the last financial year that witnessed many economic disruptions as a result of drought, locust invasion, political uncertainty and Covid -19 pandemic coming as an unfortunate climax, membership however against the odds hit over

201,500. The Sacco disbursed loans worth Sh3.2 billion while deposits and share capital stood at Sh1.987 billion. According to the Sacco Chairman, Mr Francis Muriithi Mugo, the outstanding financial performance posted by the giant Deposit Taking Sacco is as a result of innovative services and products coupled with improved use of information and communication technology (ICT) in service delivery guided by the proper strategic direction of its able management team. “We (Bingwa Sacco) employ innovative services, best customer practices for excellent growth. Guided by the previous strategic plan, we waded out through the troubled 2020 economic times to register encouraging performance in all our key segments,” Mugo stated. He notes that in the same 2020 financial year, the Sacco Societies Regulatory Authority (SASRA) allowed installing of a centralized computer system, which was upgraded to ensure members get notifications via SMS when their accounts are credited. More developments The Chairman reported that the Sacco completed the extension of its head office building in Kerugoya, which stands as a landmark in the town and greatly improving the Sacco’s image. “We believe the extension will boost our rental income and improve members’ dividends in future. I am grateful to our members who enabled the Sacco to complete the construction of Bingwa Sacco complex without borrowed funds,” said the Chairman. The Sacco also renovated its banking halls, giving them a new look with new executive customer lounges to serve mem-

bers better. It has also acquired plots in places it has branches to reduce high rent expenses. Last year, it bought new plots and buildings at Kianyaga, Gatwe, Kutus, Kangaita, Kiamutugu, and Githure trading centres. In 2019, the Sacco acquired a building and plot at the Kiangai trading market. Sacco Chief Executive Officer (CEO) Jane Mugo noted that the growth in membership from 187,488 in 2019 to 201,558 in 2020 is a demonstration that the fast-growing DT Sacco is committed to offering unique products and services that are tailored to members’ needs and demands. Bingwa Sacco’s asset base also increased from Sh5.810 billion in 2019 to Sh6.208 billion, while deposits and share capital increased to Sh1.987 billion from Sh1.838 billion in 2019.

We employ innovative services, best customer practices for excellent growth. Guided by the previous strategic plan, we waded out through the troubled 2020 economic times to register encouraging performance in all our key segments. - Francis Muriithi

6.208 THE ASSET BASE in 2020, a rise from 5.810 the previous year. The Society disbursed loans worth Sh3.2 billion in the year. Since its inception in 1984, the Sacco has disbursed loans worth totalling Sh23.9 billion. Moving on “In line with our new strategic plan, the Sacco intends to acquire the best system in the market to enable provision of efficient services to our members,” stated the Sacco chairman. The Chairman said Bingwa Sacco will leverage ICT to improve efficiency and achieve its targets. The Chairman and the CEO were speaking during the 36th Annual General Meeting at Kerugoya Catholic Church ground where the Sacco’s 2021-2025 strategic management plans was unveiled. Background Bingwa Sacco Society Ltd (former Kirinyaga Tea Growers Sacco Ltd) was registered in 1984 being the first of its kind in the Republic of Kenya and Africa. Initially, it started its operations with BOSA Services, but introduced FOSA services in 1993 to meet the increasing demand by the growing clientele. The Sacco was first licensed

Jane Mugo, CEO. by SASRA (Sacco Societies Regulatory Authority) for deposit taking in year 2011 being among the first Saccos to be registered in the country. The society is managed by 7 Directors and 3 supervisory Directors elected directly by the members (shares holders). “Currently we have over 190,000 members derived from all sectors of the economy in the country and Assets Base of over Sh6.3 billion, and provide both financial and Non-financial needs to our members,” said the CEO. She said the Sacco stands out because of its innovative products and services that suit the needs of customers. “We all have dreams and to attain them we need partners we can walk with. We will walk with you through this journey. Our Membership is open to all: Individuals, Micro and Small Businesses, Corporates and Institutions (Governmental and NonGovernmental Groups/Chamas.) Enjoy the very best of banking and investment services by joining us today,” she said.

SASRA asks digital saccos to register for regulation By Malachi Motano Sacco societies Regulatory Authority (Sasra) asked all digital Savings and Credit Cooperative Societies (saccos) to register with Sasra and to submit their accounts to the regulator regularly for regulation. Sasra’s acting Chief executive officer (Ag CEO) Peter Njuguna said there has been a rise of co-operatives operating online without physical presence raising the risk that citizens may lose their money. “Many Kenyans have lost their hard-earned money to online schemes that entice them to quick riches. Therefore, it is in

order that saccos operating in the digital platform should face strict regulatory oversight even as the government moves to protect Kenyan deposits,” said Njuguna. He noted that the move will protect citizens from unscrupulous institutions and individuals who raise funds and then disappear in thin air. “We must authorize digital financial institutions before asking Kenyans to deposit with them. Saccos need close supervision even when they are small in terms of savings and assets,” he said. Njuguna noted that digital saccos have been operating in a

different environment escaping regulatory oversight like the traditional institutions. “While traditional Saccos have a social bond, virtual ones lack such and it is hard to even trace the officials that run them. The whole idea is to ensure that they are properly anchored and their bylaws are clear,” said Njuguna. The new regulations were gazetted in January this year, requiring the digital Saccos to comply within six months. Recently the Sasra oversight has been extended to Non-deposit Saccos that have assets size exceeding Ksh 100 million. Sasra warned the public

While traditional Saccos have a social bond, virtual ones lack such and it is hard to even trace the officials that run them. The whole idea is to ensure that they are properly anchored and their bylaws are clear -Njuguna.

against dealing with any Sacco that has not been authorised. The deadline for compliance for non withdrawable deposit saccos was on June 30th. “Any person, including members of the public and public entities who undertake such specified non-deposit-taking business transactions or other businesses with an unauthorised person, entity, or Sacco society shall be doing so at his or her risk and peril,” said Njuguna in a statement. The regulations not only affect saccos with physical offices but also those that conduct their businesses virtually.

and in line with Capital Markets Authority guidelines, the bank is progressing to make the dividend payment for ratification at the next Annual General Meeting.

28 | SACCO REVIEW

In this regard we hereby give notice that the dividend shall be paid on or about Thursday, 23rd April 2020 to the shareholders on the register at the close of business on Wednesday, 15th April 2020.

AUG 20 - SEP 20, 2021

SASRA Awards Co-operative Bank Sacco compliance certificate as NWDT Sacco By order of the Board Samuel M. Kibugi Company Secretary

By Staff Reporter

o-operative Bank Sacco is among the 25 Non Withdrawable Deposit Taking (NWDT) Saccos issued with compliance certificates by the Sacco Society Regulatory Authority (SASRA). The Sacco which is headquartered in Nairobi, offers a variety of loans to its membership, ranging from Development loans, Short-term loans, School fees loans, and Investment loans. Under development loans are normal development loans, enhanced development loans and super development loans. The Sacco’s short term loans covers Emergency loans, SARF loans, Super SARF loans, holiday loans, Insurance Premium Financing loans and Swift loan. School fees loaning facilities include the normal school fees loan, Higher Education loan and HELB waiver loan. Lastly, the Investment loan category has Share purchase loan, Asset finance loan and domestic consumer loan. The colourful compliance certification occasion held at Nairobi’s Safari Park hotel was presided over by Cabinet Secretary (CS) for Agriculture, Livestock, Fisheries and Co-operatives Peter Munya. Also in attendance was Principal Secretary (PS) for Co-operatives, Mr Ali Noor Ismail and Commissioner of Co-operatives Geoffrey Njang’ombe.

Co-operative Bank is regulated by the Central Bank of Kenya.

CS, Peter Munya who was the Chief Guest makes his speech. Out of the 157 Specified NWDT Saccos that applied for compliance, only 25 managed to meet the June 30 compliance deadline that was set by SASRA, with the Regulator saying that most of the remaining Saccos are at different stages of compliance processing, Currently SASRA is regulating 175 deposit taking Saccos.

Co-operative PS, Ali Noor Ismael makes his speech during the awards ceremony.

The government, through the authority is keen to bring more Saccos under the regulatory oversight to improve their performance and overall governance. Munya said that through the new SASRA Regulations 2020, the government is keen to ensure transparency and strong governance structures among Saccos while securing members’

assets and savings. “As Government we have to work tirelessly to transform the Sacco sub sector and ensure its stability. We have the responsibility to protect the savings made by members of the public in these Saccos through regulations,” stated the Cabinet secretary. The CS said through the new

Sasra regulations; the government is keen to ensure transparency and strong governance structures among Saccos while securing members assets and savings. The specified NWDT Saccos include those in which the total non withdrawable members deposits amount to Sh100 million and above, those operating digital saccos, and those whose memberships and subscription to its share capital is from persons in the diaspora.

As Government we have to work tirelessly to transform the Sacco sub sector and ensure its stability. We have the responsibility to protect the savings made by members of the public in these Saccos through regulations. - CS, Peter Munya.

SACCO REVIEW | 29

AUG 20 - SEP 20, 2021

NYANZA

Encourage children to save, parents urged By Gilbert Kobi Kisii County Commissioner for Co-operative Development, Pamela Kemunto has urged parents to support their children to embrace the culture of borrowing loans, making investments and saving in Savings and Credit cooperative (Sacco) societies to boost their incomes and strengthen the societies. The Commissioner challenged the parents to secure loans from the Sacco societies and help their children invest in viable projects to generate profits, repay the loans and qualify for more loans. Pamela implored them to engage their children in viable projects during the holidays so that they do not engage in drug abuse and activities that could spread Covid-19. “The children can venture into poultry or fish farming, save at the Sacco and secure loans at friendly and affordable interest rates” said the Commissioner. Her sentiments came after the realization that members of the Sacco were not taking loans from the Sacco as lending decreased in the year 2020 compared to that of 2019. Speaking at Kisii Cultural Centre during the Sacco’s Annual Delegates General Meeting (AGM), the Chairman Hezekiah Nyasamba said the pandemic had affected the Sacco’s business, stressing it has embraced virtual meetings to curb

the spread of the pandemic. “I urge Sacco members to take advantage of the reduced interest rates to secure loans from the society to increase its loan portfolio and the Sacco’s investments” Nyasamba said. At the same time he urged delegates with Non-performing Loans (NPLs) to service them to qualify for re-election as required by the Sacco Societies Regulatory Authority (SASRA). Supervisory Committee Chairman, Joseph Nyakundi said the Sacco’s income decreased from Sh433, 791, 257 in 2019 to a staggering Sh379,939, 661 in 2020. He, however, attributed it to the challenges of Covid-19 and the government’s regulations to control the spread of the disease. “The Sacco’s expenditure decreased to Sh335, 628, 673 in 2020 compared to Sh386, 674, 483 in the previous year. The Committee commends the Finance Department for controlling the expenditures” Nyakundi told delegates during the AGM. He then appealed to the Board to start Agency Banking and open Pay Points at Etago, Magena, Borabu, Kegogi, Gesima and Sondu to bring services closer to Sacco members. The officials further urged the Sacco to put measures in place to enable recovery of Non-Performing

recruit new members to meet 2021 target. The Sacco also increased its shares by Sh17, 088, 410 from Sh482, 460, 273 in the year 2019 to Sh499, 748, 683 in the year 2020 while the savings increased to Sh797, 525, 915 in the year 2020 from Sh777, 087, 189 in the year 2019 representing an increase of Sh20, 438,726.

KSh/Wakenya Pamoja Sacco CEO Isaac Omwenga , Board Chairman, Hezekiah Nyasamba with other society officials. Wakenya Pamoja Sacco CEO Isaac Omwenga. Photo/Gilbert Kobi. Loans (NPLs), assess and appraise members seeking to secure loans to reduce the loss of lending opportunities. “Delegates need to take prudent judgment to transfer Sacco surplus to reserves when necessary to improve the Institution’s capital to total asset ratio” Nyakundi added.

He also noted that the active membership increased to 97, 948 in the year 2020 from 96, 026 in the year 2019 representing a 2% increase while dormant membership increased to 61,135 from 56,397 representing an increase of 45,738 as the dormant accounts advised the marketing department to find ways to activate dormant accounts and

The Commissioner challenged parents to secure loans from the Sacco societies and help their children invest in viable projects to generate profits, repay the loans and qualify for more loans.

WESTERN

Lake region gets fish processing factory Kakamega is one of the counties with the highest potential for aquaculture in Kenya that is why my Government is diversifying into the enterprise to ensure farmers who have been struggling with sugarcane and maize farming due to poor yields earn more- Governor Oparanya By Cally Imbayi Fish farmers in the Lake Region Economic Bloc (LREB) which includes Kakamega, Kisumu, Siaya, Kisii, Bungoma, Busia, Bomet, Vihiga, Migori, Homa Bay, Trans-Nzoia, Nyamira, Kericho and Nandi have reason to smile after the opening of a fish processing plant in Kakamega. The Kakamega County Fish Processing Factory that was commissioned on 12th July 2021 by the Swedish Ambassador Her Excellency Caroline Vicini is set to market fish produced by local farmers locally and to European Union (EU) countries. The Swedish envoy revealed that the factory meets the standards to export fish to the EU market. “EU has stringent rules and regulations on food sold in its market, but I am happy to note that this fish factory meets the standards to export fish to the EU market,” said Madam Vicini. She encouraged fish farmers in the County to supply their fish to the factory saying the demand for fish is high and it is one way of

earning income. Kakamega Governor Wycliffe Oparanya said operationalization of the factory will be a game changer in the fisheries sector adding that the plant has the capacity of processing 20 metric tons per day. He said the county has 6,976 fish farmers with 9,988 fish ponds which can supply 1,798 metric tons of fish to the factory. This translates to Ksh 539 million. “My Government has invested Ksh 20 million in the construction of a fish feed warehouse, an access road and a perimeter wall around this factory,” said Governor Oparanya. He added that, “Das Group who are running the factory on a Public Private Partnership basis has pumped Ksh 40 million into this project to ensure the factory meets all standards and requirements for export to EU Countries.” Oparanya noted that the County Government is supporting fish farmers in the county through fish feeds subsidy programme where they get feeds at a half price. He also said the factory will address the challenge of marketing

farmers to diversify to other farming practices apart from sugar cane and maize farming pointing out out that Sweden through EU had initiated various development projects in the Western region. Kisii Governor James Ongwae said Governors from LREB will greatly benefit from the plant as they will ensure that farmers in their respective counties supply fish to the plant. Ongwae who is also the LREB vice chairman noted that Governors from the region graced the occasion to learn so that they can promote fish farming in their counties. County Executive Committee Member (CECM) for Agriculture, Livestock, Fisheries, Co-operatives Swedish Ambassador Caroline Vicini with Kakamega Govand Irrigation Madam Rachael ernor Wycliffe Oparanya during the commissioning of a fish Okumu said fish farmers had waitprocessing plant in Kakamega. Photo/Cally Imbayi ed for long for the operationalization of the plant since it would turn that has been affecting fish farm- my Government is diversifying around their fortunes. Governors Prof Anyang’ ers in the region and enable farm- into the enterprise to ensure farmers earn more money. During his ers who have been struggling with Nyong’o (Kisumu), Dr Wilbur speech, he revealed that his county sugarcane and maize farming due Ottichilo (Vihiga), Wycliffe Wangamati (Bungoma) and Patrick had earlier on been awarded a cer- to poor yields earn more,” he said, tificate for being the best AquaculOparanya said the factory had Khaemba (Trans Nzoia), Deputy ture County by the Aquaculture employed 93 people, adding that Governor Prof. Philip Kutima academy. its growth will see more locals se- (Kakamega),Kakamega County He attributed the success to cure employment. He thanked the Secretary and Head of Public Serhard work, dedication by County National Government for starting vice Madam Jacinta Aluoch, Chief Fisheries Department officers and the project through the Economic Officer Mr Jeremiah Namunyu farmers. Stimulus Programme to enhance (Agriculture) and senior officers “Kakamega is one of the coun- the economic growth of the region. from both National and County ties with the highest potential for Devolution Cabinet Secre- Government graced the occasion. aquaculture in Kenya that is why tary Hon Eugene Wamalwa asked

30 | SACCO REVIEW

FOCUS ON NEWLY LICENSED SACCOS

AUG 20 - SEP 20, 2021

Network Sacco awarded compliance certificate by SASRA By Staff Reporter Network Sacco is among the 25 Non Withdrawable Deposit Taking (NWDT) Saccos issued with compliance certificates by the Sacco Society Regulatory Authority (SASRA). The colourful occasion held at Nairobi’s Safari Park hotel was presided over by Cabinet Secretary (CS) for for Agriculture, Livestock, Fisheries and Co-operatives, Mr Peter Munya. Also in attendance was Principal Secretary (PS) for Cooperatives, Ali Noor Ismail and Commissioner of Co-operatives Geoffrey Njang’ombe. The new regulations governing NWDT saccos, dubbed Regulations 2020 came into effect at the beginning of the year (January 1, 2021) and required the specified NWDT Saccos to prescribe the minimum capital and liquidity requirements that must always be maintained by CS Peter Munya(left) awards Network Sacco immediate the Saccos. Other prudential standards Edward Teka (centre) the compliance certicicate. under the new regulations inis highly profitable. Memclude investment decisions on bers have put in deposits of lending or credit operations. more than Sh150 million and Out of the 157 Specified growth continues. Upon joinNWDT Saccos that applied for ing The Standard Group Ltd compliance, only 25 managed or the other approved compato meet the June 30 compliance nies, any staff member is free deadline that was set by SASRA, to apply for membership,i.e. with the Regulator saying that membership is voluntary. most of the remaining Saccos are Membership fee is at different stages of compliance Sh500.00. After becoming a processing. member one begins to save Network Sacco Ltd was (deposit contributions). Savregistered in 1992 as a savings ings are made in order to borand credit co-operative society row more or earn interest on (SACCO). the savings. The initial employer organ“The minimum one can isation was solely Kenya Telesave in a month is Sh3,000. vision Network but has since However, we encourage diversified to include many more members to save more decompanies in media industry. Mr Dancan Kizito, pending on their capability.” The Sacco’s Asset base is Network Sacco current noted Sacco Chairman, Mr well over Sh210 million and it Chairman.

Network Sacco officials led by Mr John Warui, CEO (left), the immediate former Chairman, Mr Edward Teka (right) and the immediate former Treasurer Jacqline Ringera (middle) display the sacco’s compliance certificate.

former Chairman, Mr Edward Teka. The 25 Saccos that have complied include (not in any order) Network Sacco, Jogoo Sacco, Kenya Medical Association (KMA) Sacco, Co-op Bank Sacco, Smart Savers, Kewisco Sacco, Banki Kuu Sacco, Lompasago Sacco, BAT Sacco, Ubora Sacco, Njiwa Sacco, CIC Sacco, Mt. Kenya University Sacco, Balozi Sacco, Biblia Sacco, ESTA Sacco, AMREF Sacco, Utabibu Sacco, FINNLEMM Sacco, Mhasibu Sacco, KenyaRe Sacco, Waskom Sacco, Umoja Wendani Sacco, Blue Eagles Sacco and Family Bank Sacco. Munya said that through the new SASRA Regulations 2020, the government is keen to ensure transparency and strong governance structures among Saccos while securing members assets and savings. “As Government we have to work tirelessly to transform the Sacco sub sector and ensure its

stability. We have the responsibility to protect the savings made by members of the public in these Saccos through regulations,” says the Cabinet Secretary. The CS said through the new Sasra regulations, the government is keen to ensure transparency and strong governance structures among Saccos while securing members’ assets and savings. The specified NWDT Saccos include those in which the total non withdrawable members deposits amount to Sh100 million and above, those operating digital saccos, and those whose memberships and subscriptions to its share capital are from persons in the diaspora. Currently, SASRA is regulating 175 Deposit Taking (DT) Saccos. The government, through the authority is keen to bring more Saccos under the regulatory oversight to improve their performance and overall governance.

Co-operative PS, Ali Noor Ismael makes his speech during the awards ceremony.

AUG 20 - SEP 20, 2021

SACCO REVIEW | 31

SACCO TRAILBLAZERS

According to Esther, whereas financial institution has so many processes even for small loans like Sh500, 000, the Sacco processes loans within a very short time.

How Sacco loan boosted family business growth By Malachi Motano Michael Ochieng and his partner Esther Omcheni co-own Afritech, a print media investment which has been in the industry since 1997. The couple share about the sweet journey they have walked with Universal Traders Sacco (UTS) since they became members three years ago, more so during the Covid-19 pandemic. “I came to know of the Sacco through one of its directors called Peter Nzagi. Every time I passed Mlolongo I could see colours that looked like Cooperative bank and I wondered whether co-operative bank was already here until the day I went to market my photocopiers to them thinking it was Co-operative Bank, that I met Peter. That is how our relationship started,” Michael who is the company CEO begins their story. His wife Esther who is the MD at the company says the Sacco provides them with safe havens to seek refuge in bad times. “We joined the Sacco

Esther (in red) and Michael (fourth left) together with the Afritech's staff. at the beginning of 2019 and have benefited a lot in terms of securing loans, and overdraft facility. When we wanted some money to pay entry duty for some of our goods but came short of ShI million, we went to our branch in Mlolongo and within that day, they released the money to us. While their major clients were hit very had by the outbreak of Covid -19 pandemic, the company

had to look for means to remain afloat. “Our main clients are schools which were closed when cases of Covid-19 heightened. Another big client is Kenya Literature Bureau (KLB) which also closed. We had their stock but could not deliver. They also had some of our money which we could not get meanwhile, the business had to continue. We are proud that UTS stood firmly with us,” she says

the MD. According to Esther, whereas financial institution has so many processes even for small loans like Sh500, 000, the Sacco processes loans within a very short time. “We have taken two loans thus development loans worth Sh28 million. We also took education loan recently for our two sons who were going to study in UK. Currently we have undertakings

with our staff payroll, and all our 15 staff members have joined the Sacco as members. Nowadays my members of staff even get salaries on 24th or 25th, as if they are banks,” says Esther.. Afritech therefore has no challenge with Salaries. I just give out a pay roll, and they pay salaries to my staff. They even advance salaries to my staff. When other companies were reducing staff during the pandemic, we maintained ours. According to the MD, the Sacco is flexible, listening to customers. Even the newest branch in Mlolongo has good management that listens and acts promptly on customer’s needs. “You don’t need to go to the headquarters in Machakos when Mlolongo is here. Whatever we need from Machakos we can get in Mlolongo. So it for us to make Mlolongo grow and expand. We cannot quit UTS since it has always been there for us in times of laughter and in times of difficulties,” she concluded.

Youth in business asked to form saccos for advancement of their activities Fredrick Odiero The Kisumu County Government has called upon youths who are engaged in various enterprises to form Savings and Credit Cooperative Societies (SACCOS) in order to advance their activities. The Director of Co-operatives, Trade and Enterprise Susan Kanga said Saccos when formed will ensure youths borrow credit and other facilities from the government. Addressing youth entrepreneurs during

the World Youth Day in Kisumu, Kanga said young people should discard the notion that Saccos belong to the elderly. Kanga said research has proved that those who join Saccos do better than those who opt to sit on the fence. She said that many ‘brief case’ Saccos have sprung up and are fleecing members of the public of huge sums of money adding that many have ended up collapsing since they were formed without adequate structures

Susan Kanga, Kisumu County Director of Co-operatives,trade and enterprise. Photo/Fredrick Odiero

in place. The official said many such bodies masquerade as Saccos yet they are not as they are started by individuals with no structures at all. She added that the County Government has set aside Sh100 million for enterprise and urged youths to apply for the funds. "Youths have an upper hand when it comes to such programmes hence the need for them to apply" she said.

Young people should discard the notion that Saccos belong to the elderly. Research has proved that those who join Saccos do better than those who opt to sit on the fence. - Kanga

AUG 20 - SEP 20, 2021

32 | SACCO REVIEW

RIFT VALLEY

Plan to merge co-operatives kicks off in Uasin Gishu By Our Reporter Uasin Gishu County has introduced a new Cooperative law (Uasin Gishu County Co-operatives Societies Act) that will see Cooperatives and Saccos with same focus merge and ease management. “Under the Act, going forward, we shall be working with registered co-operatives with a view of merging coops engaging in similar sectors,” said Count y Governor Jackson Mandago when he graced the County’s 99th Ushirika Day in Eldoret town. The new law provide structures for merger as well as strict management of cooperatives, seen as a big boost for Co-ops Movement According to Uasin Gishu County Governor, when he assented to the act, the introduction of the new law is expected to enable the Uasin Gishu Governor Jackson Mandago cutting a cake with chairpersons of different sector work smoothly, better and Sacco’s in the county to mark the 99th International Day of Co-operatives. Photo/Elvis Wasike thrive. “The Act gives lawful manThe Act gives date to the County Government to eratives for both posterity and susExecutive. lawful mandate streamline management of coops tainability. The County will also be Merging of cooperatives and to the County as well as sustain the Enterprise De- loaning with strict conditions for the Saccos for stability has always been velopment Fund which is a vault for purpose of growing the enterprise Government an agenda of the government. In to streamline loans. Our County Government has fund. 2020, the Sacco Societies Regulainvested a lot in the co-operatives Meanwhile the County Gov- management of tory Authority (Sasra) wanted small sector. We have even revamped up ernment is already rolling out the coops as well as Saccos to merge as top 20 entities to 300 cooperatives that had col- merger programme, with coopera- sustain the Enterprise control more than half of the total lapsed, with the reason for their tives from Moiben and Soy, Turbo deposits. collapse being mainly mismanage- and Kapseret, Kesses and Ainabkoi Development Fund The regulator says large Saccos ment,” said the Governor. joining to form one big co-oper- which is a vault for are deepening the control of deHe reminded co-operators that ative. The Act therefore comes to loans. Our County posits -a key source of lending - as one of the principal of cooperatives provide lawful guidelines. small ones struggle to mobilise deGovernment has is pulling together, saving and mo“The Act gives (the County) invested a lot in posits and with the merger, deposit bilizing capital in order to enable powers to run our co-operatives, it taking (DT) Saccos will help bring institutions to fund members so as will spur the growth of cooperatives the co-operatives stability and lower costs of operato invest. and make them more vibrant,” said sector. We have even tion. “This means the County Gov- Esther Mutai, the Co-operatives and revamped up to 300 “A time has thus come for the ernment has been given mandate Enterprise Development County cooperatives that Sacco subsector to start policy to organize for merger of co-oper- Executive, said, conversations and dialogues on had collapsed, with atives that are venturing into same “One of the ways of making voluntary consolidation and amalbusiness so as to build strength and financial and stock management the reason for their gamations of the many small DTcapacity for success in diversifica- efficient and trustworthy is by use collapse being mainly Saccos, in order for them to remain tion in business.” of technology. Let us embrace ICT mismanagement competitive and benefit from asThe Act also seeks to install in our operations,” said Dr Emily - Governor. sociated comparative advantages,” policies for management of co-op- Kogos, the Trade and ICT County said Sasra.

‘

The development comes at a time when the Regulator has revoked licences of several Saccos and put some on restricted operations due to liquidity constraints. Saccos are experiencing skewed distribution of liquidity just as in the banking sector where over 70 percent of the deposits are in the hands of eight out of the 40 entities. The regulator Sasra says that in 2020, the top 20 DT-Saccos controlled combined deposits of Sh224.75 billion in the last year, being more than half (59.08 percent) of the Sh380.44 billion total deposits. As at last year, a total of 99 DTSaccos whose total deposits were below the Sh1 billion controlled a paltry 8.4 percent of the total deposits within the system. Sasra warns that as the market share of small Saccos continues to come under pressure from large Saccos, they are at risk of folding up in the absence of mergers. In the absence of such consolidation and amalgamation initiatives, a time will come in the medium to long term when the market share of these small DT-Saccos will be wiped out, thereby rendering them financially unviable. Between 2015 and last year, Sasra has revoked licenses of 14 DT-Saccos on account of failing to maintain the required levels of core capital. Sasra data shows that there are now 172 licensed DT-Saccos in contrast with 215 Saccos in 2012. This means 43 Saccos have dropped out during this period. Sasra requires among other things that all DT-Saccos maintain at all times minimum core capital of not less than Sh10 million. The DT Saccos are also required to maintain core capital to total assets ratio at not less than 10 percent. Core capital to total deposits and institutional capital to total assets has been set at a minimum of eight percent and eight percent respectively. Deposits account for over 90 percent of the funding for the loans and other credit facilities issued to members.

Boda boda Sacco to buy vans for members By Martin Ruto West Pokot County Boda boda Savings and Credit Co-operative Limited recently elected new officials to steer forward the visions of the co-operative society. Speaking to Sacco Review, Mr. Laban Ruto who was voted in as the new Sacco chairman said the Sacco is planning for great projects for the benefits of its members. “Two major priorities of the West Pokot boda boda Sacco are purchasing of a Nissan shuttle and a grader The proceeds from these projects will go directly to the account of the Sacco for the benefits of its members” said the chairman. Ruto said the Sacco was officially launched on 5th of August this year by the Governor of West Pokot County, Professor John

Krop Lonyangapuo at Makutano Stadium. The elected members of the West Pokot boda boda savings and credit co-operation limited are Mr Laban Ruto as the Chairperson, Mr Moses Kemei elected as ViceChairperson, Mr Meshak Limasia as the Secretary, Mr John Maru the Vice Secretary and Mr Jack Ling’aa picked as the Treasurer. “The boda boda savings and credit Co-operative limited is a great achievement for the employment of the youth in the county” Mr. Jack Ling’aa said during the meeting. The Secretary Mr. Meshak Limasia encouraged the boda boda operators to join the Sacco which plans for bigger projects aimed at improving the living standard of West Pokot Boda boda Sacco chairman, Mr Laban Ruto (right) with some of the members at a its members. function. Photo/Martin Ruto

SACCO REVIEW | 33

AUG 20 - SEP 20, 2021

RIFT VALLEY

Nandi County sets up Alternative dispute resolution desk for co-ops By Malachi Motano Nandi County government has established Alternative Dispute Resolution (ADR) desk to provide solution to the continuous wrangles that has left a number of agricultural-based rural cooperatives on the verge of collapse. According to the County Executive for Agriculture Kiplimo Lagat, the county is seeking to forestall collapse of the cooperative movement to enable member farmers enjoy opportunities of economies of scale, market research for produce and access to extension services to expand their enterprises. The establishment of ADR desk through collaborative efforts of department of Agriculture and Co-operatives with National Cooperative is expected to harmonize varying views and strengthen existing cooperatives across six sub-counties. The desk is also expected to bring together and accommodate

Some of the vibrant cooperative societies in rural Nandi engage in dairy, coffee, tea, sugarcane, avocado, poultry, fishing, maize, bamboo and potato production. “The most common disputes that have continued to threaten the cooperative movement in this county include leadership wrangles and mistrust among management committee members, external interference from politicians and interested parties and leadership styles,” says the executive. He stated that the county has more than 200 active agricultural cooperative societies with 12 having been revived after years of dormancy due to disputes and mismanagement. With the opening of ADR desk, Cooperative societies can now breathe a sigh of relief as it is a way of settling disputes without litigation in that it allows involved parties to identify mutually satisfactory solutions without facing a tribunal.

very lucrative areas that farmers can join to be economically empowered. He was speaking while commissioning the ADR desk at the Cooperative Offices in Kapsabet while accompanied by Lydia Omamo, the Country Director NCBA who admitted that many cooperatives are facing wrangles ranging from leadership, financial, payments and elections, thus is important to have an ADR at the grassroots level to benefit societies. “We have 24, 000 cooperatives in the country, and if they all channel their disputes to the tribunal, it will take much longer to solve each cooperative issues and thus the need for ADR,” she said. The event was presided over by Dr. Benadatte Tiony the Nandi County Chief Officer for Cooperative Development who indicated that the county has a total of 325 cooperatives under dairy, maize, potatoes, sugarcane, tea and coffee

Kitale–Kapenguria Travellers Sacco Uplifts Lives By Martin Ruto Kitale – Kapenguria travellers Savings and Credit Co-operative, a society that was started barely three years ago with only ten vehicles has fully transformed into one of the popular and recognized saccos in the North Rift region. The Sacco boasts of one hundred active membership with its headquarters based in Makutano–Kapenguria town. Speaking to Sacco Review, the chairman Mr Michael Wakoli pointed out that their main route is Kapenguria through Kitale and Eldoret to Nakuru and other routes are Kapenguria, Kacheliba, Konyao and Alale route to the border of the neighboring Uganda. One of the notable achievements of the Sacco is that all of its members have complied with National Transport and Safety Authority (NTSA) requirements and are fully licensed to drive Passenger Service Vehicles (PSV). “The Sacco has also created employment for the youth as the more than 100 drivers belonging to the Sacco means additional employment to Kenyans” Mr. Wakoli said. He also confirmed that most of members are owners of the PSVs

they drive, adding that the work of the Sacco officials has been to guarantee the drivers to get loans from financial institutions and now enjoy the ownership of vehicles they drive. The Sacco has also created employment for the youth through station managers who oversee the management of Sacco vehicles at different stations. Mr Wakoli confirmed that the drivers are class A, therefore meeting the NTSA requirements for driving PSVs. “The passenger’s parcels and luggage reach to their destination safely,” he added. The Sacco chairman admits that the Covid -19 pandemic has been a great challenge to them as the number of passengers travelling has drastically reduced while the cost of the fuel has gone up. Wakoli said the Sacco has bright future for its members, adding that soon members will start getting more shares which will enable them to borrow loans for their personal development. The Sacco will also introduce various projects for the benefit of its members. Kitale-Kapenguria Travellers Sacco is the pride of the North Rift Region

Officials witness the commissioning of the Alternative Dispute Resolution (ADR) desk at the Co-operative offices in Kapsabet. members’ diversity in perspectives that guide co-operative framework, safeguard peaceful coexistence, social cohesion and resolve all inhouse conflicts within societies. “The objective of the new division is to help solve disputes at the grassroots level to tame escalation to tribunals, which are normally disadvantaged with procedural factors and delays due to the high number of cases being solved at that level.” said Dr. Langat. He is confident that the dispute resolution desk will provide a favorable environment for cooperatives to exercise autonomy and cohesiveness in advocating for their objectives. “Cooperatives are key pillars in the socio-economic development and the institutions must be protected to ensure they remain strong,” stated Dr. Lagat.

The societies in Nandi County for a long time now have been travelling to Kakamega to have a hearing to their disputes before they are forwarded to the cooperatives tribunal in Nairobi. “The initiative will help cooperatives solve their issues amicably. As a county government, we will support the initiative for its cheaper and takes a shorter time to solve disputes than the court process. I therefore urge farmers to join cooperatives for it is the way to go, and that they will accrue more benefits being in Cooperatives than individually,” he pointed. Dr. Lagat said that for a long time farmers have been concentrating on the traditional milk, maize and tea value chains and missing on the emerging value chains like the avocado and Coffee which have attracted the export market and thus

among others. She explained, “NCBA currently supports Nandi Dairy Union, Kabiyet Dairies, Lelchego, Lesso’s and Aldai-Moi Cooperatives, with time it will reach out to other cooperatives in the County.” The Chairperson Nandi Dairy Union Abraham Rugut thanked NCBA for the program asserting that it will assist societies build relationship between warring parties and bring solutions with parties having a win-win situation unlike other dispute resolution processes. According to the Cooperatives Societies Act, Cap 490, in case of a dispute, the management committee brings the issue to members in a general meeting and if a solution is not reached at, the issues are referred to the Cooperative tribunal for determination.

The Sacco has also created employment for the youth as the more than 100 drivers belonging to the Sacco means additional employment to Kenyans - Mr Wakoli

34 | SACCO REVIEW

FOCUS ON NEWLY LICENSED SACCOS

AUG 20 - SEP 20, 2021

Kenya Re Sacco awarded compliance certificate by SASRA Always first among firsts, Kenya Re Sacco Ltd becomes SASRA compliant By Malachi Motano The Board of Directors and the management staff of Kenya Re Saving and Credit Co-operative Society (Kenya Re Sacco Ltd ) are indeed very proud that the Sacco was among the first 25 to receive authorization certificate from the Sacco Society Regulatory Authority (SASRA). “We are very happy that our Sacco (Kenya Re Sacco Ltd) which is Nonwithdrawable Deposit taking Sacco is now regulated by SASRA,” says Sacco Chairlady Madam Rose Waganda. According to the Chairlady, the achievement reflects the high level of commitment of the board and staff of the Sacco in ensuring that the Sacco is run with the highest professional standards and puts members’ needs at the centre of its operations, as guided by the strategic direction. “All our activities are guided by a strategic plan, clear objective, business plan and by-laws. All these have enabled us to come up with products and services that are relevant to the desires of our members’ needs,” adds Madam Waganda. Products Currently, the Sacco has both savings and loans products. The savings products at the Sacco include Deposits, School Fees, Holiday savings, Junior savings and Birthday Anniversaries while the loans products are Development Loan payable within 54 months, Super Loan paid in 60 months and Biashara Loan with a repayment period of 42 months.

nya Re Insurance Corporation staff later fully opened the bond in 2008 to accommodate more members. The Sacco currently draws membership from Kenya Re, Africa Re, Monarch, ATI, Shelter Afrique, and House of hearing, Supersonic Clearing and Forwarding, LAK Advocates, Business people, individuals and even the members who had withdrawn before. “We also ensure that members are accorded relevant information through education forums and strive to maintain consistent communication with our members, as our slogan goes ‘Together We prosper,’ concludes the Chairlady. Cabinet Secretary (CS) Peter Munya (left) awards a compliance certificate to Kenya Re Sacco Chairlady during the ceremony held at Safari Park Hotel in Nairobi on July 8th, 2021.

Rose Waganda, Chairlady.

Joseph Mwandikwa, Hon. Secretary.

Martin Mbinda, Ag. CEO.

Other loan products at the Sacco include Education Loan which is paid within 36 months, Product Loan with a repayment period of 24 months, Normal Emergency loans that takes 12 months of repayment and Express Emergency, paid within 12 months.

In its mission, the Sacco strives to be an innovative society providing high quality financial solution to the members and stakeholders. Its mission on the other hand is to ensure improved financial status of members through effective savings mobilizations and access to competitive products and services “Our core values are integrity, professionalism, commitment and teamwork,” explains the Chairlady.

The Sacco which initially started in 1976 to cater for the interest of only Ke-

Why Join Kenya Re Sacco The Sacco members enjoy quick loan processing, with no hidden fees, affordable interest rates, instant loan processing for emergencies and consistent and timely payment of dividends.

Membership (Who can join the Sacco?)

Our activities are guided by a Strategic plan with clear objectives and business plan and by-laws which have enabled us to come up with products and services that meet our members needs. - Chairlady

Co-operative PS, Ali Noor Ismael makes his speech during the awards ceremony.

Office Location; Re-Insurance Plaza, 15th Floor, Taifa Road, Nairobi. Contacts; 0703083380/276

AUG 20 - SEP 20, 2021

SACCO REVIEW | 35

SPECIAL FEATURE

How ‘boda’ riders overcame challenges to form Sacco Meet Alloys Mwai. He is 41 year old founding chairman of Kitengela Motorcycle Saving and Credit Co-operative Society (Kitemoto Sacco). He shares with Sacco Review’s Malachi Motano how together with his rider colleagues rode on continued crackdowns to build own estate “I remember it was in the year 2009 when police crackdowns on Motorbike taxi (alias Boda boda) operators were so frequent here in Kitengela and in the spirit of comradeship, we (operators) decided to start contributing money to pay the fines charged to set their arrested colleagues free,” Mwai begins their story. He says the contributions continued even after the crackdown was over. “We were then 200 members who decided to continue with the contribution towards a collective cause. That is how Kitemoto Sacco was formed,” he says According to the founding Chairman, the 200 members would contribute Sh100 per day, enabling the Sacco to bank Sh20, 000 daily, Mwai says. “After our contributions had grown to about Sh600,000, we formed Kitemoto Sacco with the help of then district officer in Isinya. We started loaning Sh80,000 to our members who used rented motorcycles, to buy their own, at an interest of Sh10,000, in 2010,” he says. Kitemoto Sacco also paid for members’ driving or motorcycle riding courses and licences. Others would get loans to pay fees, rent and other expenses. Thus, all members of Kitemoto Sacco became self-reliant. “However, after some time, we noticed that most members were asking for loans to pay rent rather than to develop themselves financially, and some of

the members floated the idea of investing in housing. Some members agreed with the idea but others rubbished it as a pyramid scheme that would fleece them of their savings, and so about 100 of them left but we were set on achieving our goals. We were even inspired to build our own beautiful but affordable houses from savings,” Josephat Gathaga, the founding secretary of the group says. The Sacco then identified a five-acre piece of land in Kitengela for the project and approached banks to finance them but it was in vain since most of the banks showed no interest in financing them until they landed on National Cooperative Housing Union (Nachu), nine months after the idea was mooted. “At first it was challenging. NACHU told us that our group must have a membership of at least 100 to qualify for a loan. With the exodus of the 100 members earlier and about 50 others in the nine months, we were much behind the NACHU requirement, leaving us with the option to approach other small business owners such as vegetable vendors, charcoal sellers, jua kali artisans, salon owners, and construction workers to fill the deficit.” He added. NACHU, apart from financing the project later on also facilitated seminars, where, Mwai says, they learnt ‘how to develop strategic plans, keep records and save’. “Then on 25 October 2012,

“The Sacco has also constructed additional houses, which members have christened ‘commercial’ because they are for sale to non-members. The three-bedroom units are tiled, fitted with sinks and taps, have work tops, are painted and furnished with cabinets and wardrobes, and they sold at Sh4.7 million,” Mwai adds. “We are very happy with what we have achieved so far, as all our members have moved from the crammed informal settlements where we used to put up not only with limited space, but also with non-existent drainage, poorly built and lit houses and everything else that characterised such living every day, to beautifully lined, well-lit estate homes of the same design and with all necessary utilities in place,” says secretary Gathaga. The grocery vendors or othAlloys Mwai points at some of the houses put up by Kitemoto erwise called ‘Mama mboga’ Sacco for its members. members now grow some of the vegetables they used to buy in our small group of like-minded, housing to the motorcyclists, ordinary Kenyans had a meeting mama mbogas, jua kali artisans, the market on the open patch beat a farm in Kitengela to witness construction workers, tailors and hind their units and also use the the ground-breaking ceremony other small business entrepre- vegetables for barter trade when of the five-acre piece of land that neurs, who constitute the biggest they need to get milk or other we bought for Sh3 million,” says percentage of low-income earn- household commodities from the Chairman. ers in Kenya. About 80 initial other small business owners in Before the meeting their con- members are living in their start- and around Kitengela. “Members’ lives have really voy of motorcycles had snaked er homes at the five acre piece of improved through the Sacco’s its way through the streets of land. Kitengela, horns blaring and The Sacco loan for the land activities, as apart from getting women ululating, on their way and starter home on which the affordable loans, they are also to the site and a few days later, houses stand costs Sh450,000 for more economically knowledgethe Sacco was already huffing each member, on a flat interest able from the capacity building and puffing on the road towards rate of 14 per cent on a reducing activities they benefit from,” adds Gathaga. providing decent but affordable balance for seven years.

Kitengela motorbike riders who are Kitemoto Sacco members.

Kitemoto Sacco housing project.

Sacco Review AUG 20 - SEP 20, 2021

How boda boda riders overcame challenges to form Sacco»» Page

CIC Group makes Sh 337 million half year profit Management will continue to implement mitigating strategies to contain the adverse effects under the Covid-19 business environment to supervise the expectations of all stakeholders - Nyaga. The giant CIC Insurance Group recorded a Sh337 million profit before tax for the first half of year 2021 ending June 30. This was a major breakthrough compared to a loss before tax of Sh297 million for the same period last year, with the latest strong performance boosted by resilient growth in the topline and strong investment returns. The CIC Group financial results signed by the Group Chief Executive Officer (CEO), Mr Patrick Nyaga showed gross written premiums grew by 16% to Sh10.8 billion from Sh9.3 billion. The strong performance was driven by growth in all businesses except South Sudan where business was repricing to more profitability. Investment income grew 168% to Sh1.6 billion from Sh0.6 billion in the prior year due to gains in equity portfolio and unwinding of

forex losses from currency translation of foreign subsidiaries. Fund management fees grew by 41% to Sh400 million from Sh300 million as a result of the increase in funds under management. The CIC asset management profit before tax increased from Sh130 million same period last year to Sh225 million mainly as a result of growth of assets under management by 35% to Sh89 billion from Sh66 billion. As a key player in the region, among CIC Group regional subsidiaries are CIC Malawi, CIC Uganda and CIC South Sudan. On outlook, The Group CEO noted, “The transformation journey has earnestly started across the Group with initiatives aimed at improving the business performance. Underwriting excellence continues to be the Group going forward to ensure that all businesses record underwriting profits.”

Nyaga noted the Group continues to review and implement a functional structure to support achievements of the overall Group objectives. He revealed Balance Sheet re-organisation was on course and aim at optimal utilization of available resources including disposal of non- core assets and focusing on the core business for the Group. “Digitization focusing on optimizing investment in digital technology mainly self-service channels and portals and upgrading all our systems with modern technology to support group objectives through faster and accurate reporting for decision making as well as superior customer experience,” explained Nyaga. Further, he noted the Group has also focused on implementation of performance based reward systems and process such as key performance indicators, aimed at improv-

ing staff engagement and productivity. The Group’s other key areas of focus include research and development as well as innovation ensuring capacity to expand its product offering and thus enhance product performance. “ManPatrick Nyaga, CIC Group CEO. agement will continue to implement mitigating “With the transformation inistrategies to contain the adverse tiatives in place, the CIC Group effects under the Covid-19 busi- will be resilient and is confident of ness environment to supervise the growth and profitability in the meexpectations of all stakeholders,” dium to long term.” He observed. noted Nyaga.

Concern as dormant Sacco members hit 1.4m due to economic hardships By Sammy Chivanga The number of dormant members in the Savings and Credit Cooperative Societies (Sacco) has risen by 79.55 percent to 1.37 million on increased job cuts and delayed salaries from struggling entities. The increase in dormant membership is the fastest in recent years and came on the back of economic fallout that hit Kenya after the onset of Covid-19 in mid-March last year triggering pay cuts, layoffs and closure of businesses. The Sacco members who are no longer active savers now account for a quarter of the 5.4 million total membership in Deposit-Taking (DT) Saccos, according to Sacco Societies Regulatory Authority (SASRA) report. “The dormant members accounted for 25.09 percent of the total membership in 2020 compared to 16.95 percent reported in 2019 implying that more and more members of DT Saccos had not transacted with their respective DT Saccos for periods exceeding six months,” reads the SASRA report. “The sharp increase in the dormancy of members may be attribSHREND PUBLISHERS

uted to the general impacts of the Covid-19 Pandemic on the economy, resulting in reduced member transactions with their respective DT Saccos.” Dormant accounts have been rising for the last three years. This is in contrast with 2017 when dormant accounts dropped by 1.35 percent from 489, 112. A rise in dormant accounts points to the crisis in the economy that has slowed Kenyans ability to save. The increase in dormant accounts came in the period that total membership grew by 21.31 percent to 5,470,192 accounts, meaning an increased number of people failed to make savings. This has seen the pace of deposit mobilization lag behind that of appetite among members to borrow –a red light since deposits are the key financier of the loan portfolio. For instance, Saccos’ total deposits grew by 13.41 percent to reach Sh431.46 billion while loans and other credit advances grew by 13.16 percent to reach Sh474.77 billion in 2020. This means that the rate of mobilization of deposits tied with that of the rate of growth in total deposits,

The Sacco members who are no longer active savers now account for a quarter of the 5.4 million total membership in Deposit-Taking (DT) Saccos leaving Saccos with little headroom to expand lending without turning to external financing. The fastest pace of growth in deposit mobilization came in 2009 when deposits jumped by 48.96 percent to Sh105.93 billion, marking the first time for deposits to hit Sh100 billion. This was followed by a 16.2 percent growth in 2010. The best other record came in 2015 when deposits jumped by 15.28 percent to Sh237.44 billion, before embarking on a slowing growth pace. Saccos whose deposits cannot match loan appetite are sometimes forced to borrow from sources such

as commercial banks, making it hard for them to offer lower repayment rates to members since it means paying interest to banks. The interest rates for borrowers end up being undesirable. Saccos aspire to have over 90 percent of its loans and advances portfolio to be financed principally by deposits. This is because DT Sacco model is that of mobilizing deposits for on-ward lending. Having a minimal or no portion of the loans and advances being financed through external borrowing allows Saccos to offer affordable rates to members, making them to beat microfinance banks and commercial banks. Saccos draw members from common bonds, which they use as the catchment area. Even though eligibility for membership was opened to a diverse range of the population, the bulk of membership in nearly every DT Sacco can still be traced to these common bond linkages. The clusters include government based, teachers-based, farmers, private sector and community-based DT Saccos. However, the job crises that have gripped the corporate sector and the

Sacco Review is published Monthly by SHREND PUBLISHERS & SUPPLIES LTD. Head Office: Osiligi Building, Second Floor, Ongata Rongai, P.O. Box 7732 - 00100 GPO, NAIROBI. TEL: 020 6001006 / 0737 965259 / 0722 883143 / 0734 515902 E-mail: saccoreview@shrendpublishers.co.ke / marketing@saccoreview.co.ke / Website: www.saccoreview.co.ke

struggles in diverse corporate sectors have led to many members failing to keep up with their monthly contributions to the Sacco. All major private-owned media houses in Kenya: Nation Media Group, Standard Group, Mediamax and Royal Media Services last year for instance, announced salary cuts ranging between five percent and 50 percent. Many workers in hospitality, tourism, horticulture and aviation were sent on unpaid leaves as Covid-19 battered revenues, leaving firms with thin incomes. Flower firms had for instance axed 30,000 casual workers and send home 40,000 permanent staff by mid-April last year. The recovery has been slow. Such incidences hurt savings culture in an economy that was already grappling with job losses in diverse sectors prior to the Covid-19 pandemic. The economic hardships also made it difficult for members to keep up with loan repayments, causing deterioration in the Non-Performing Loans (NPL) ratio from 6.15 percent recorded in 2019 to 8.39 percent last year. “The increase in the NPLs ratio can be directly attributed to the impact of Covid-19 pandemic which resulted in delay of repayments of some loans advanced to the members particularly among the non-employer-based DT-Saccos,” said SASRA. Registered at the GPO as a Newspaper