SACCO REVIEW Website: www.saccoreview.co.ke
THE LEADING NEWSPAPER FOR THE CO-OPERATIVE MOVEMENT IN KENYA
JUNE, 2021
KSHS 50
Why Saccos don’t need stand alone Co-op Ministry »» Pages 11
New Imarika boss sets his vision for Sacco
ISSUE 66
»» Page 3
EACC alarmed by graft in Saccos
»» STORY PAGE 35
Loan defaults hit guarantors hard »» Back Page
Sh7 billion for revival of coffee sub-sector Sheria Sacco Chairman Justice Patrick Kiage hands a gift to the Deputy Chief Justice Philomena Mwilu, who was the Chief Guest during a previous ADM. File/Photo
»» Page 31
Adopt IT or Matatu Saccos to Sh10 million for PWDs Sacco as miraa traders become Trans -Co-ops sink, Saccos in new policy »» Page 3 advised»» Back Page get loans »» Page 26
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JUNE, 2021
The Saccos whose deposits are below Sh100 million, and are neither virtual nor diaspora based, are expected to be overseen by the respective County Government Co-operative Offices where they operate.
Saccos must meet new rules June deadline By Our Reporter The Sacco Societies Regulatory Authority (Sasra) says Non-Deposit-Taking Business (NDTB) must meet the new Sacco Societies regulations before the 2020 June 30, 2021
tions. The Non-Deposit-Taking Business Regulations, 2020, not only affect Saccos with physical offices but also those that conduct their businesses virtually. They include organisa-
tions that mobilise members through subscriptions and those that take share capital from persons who are not resident in Kenya. Njuguna elaborated that the main aim of the regulations is to protect members’
Dancers entertain participants during a past Ushirika Day celebration. File/Photo deadline. The Sasra Acting Chief Executive Officer Peter Njuguna ruled out any extension, warning that non-compliant Saccos will be blacklisted. “We have warned members of the public against dealing with any Sacco that will not have complied by the set date because the societies had over a year to prepare for the rules,” said Njuguna. He said the deadline is set out in the law and cautioned the public whether as individuals, institutions or organisations not to do business with any Sacco which will not have complied with the new regulations by June 30, 2021. Njuguna said persons including members of the public and public entities that undertake transactions or other businesses with an unauthorised person, entity or Sacco shall be doing so at their own peril. In addition, the persons involved in such dealing may be liable to criminal prosecu-
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We have warned members of the public against dealing with any Sacco that will not have complied by the set date because the societies had over a year to prepare for the rules -Njuguna.
savings following cases of Saccos going under with millions of shillings leaving members penniless. Also targeted for regulation are the Saccos that mobilize membership and subscription to its share capital through digital or other electronic payment platforms. Others include those that mobilize membership and subscription to its share capital from persons who are ordinarily resident outside the country Njuguna regretted that many Kenyans have lost their money to pyramid scheme-like entities operating virtually and purporting to be Saccos by hoodwinking the public to save with them with promises of good returns. Immediately after mobilizing money from the public, such entities almost always disappear into thin air leaving the depositors
with no recourse. “The new regulations will thus rein in such dubious entities,” Njuguna noted.. These regulations also target Non-withdrawable Deposit Saccos, where members get their deposits back after leaving the Sacco but can use them as collateral for loans during the period of membership. Whereas it has been reported that there are very many Non-withdrawable Deposit Saccos in the country, the new regulations target only those with deposits worth Sh100 million and above, which have been deemed to present a systemic risk to the government. The Saccos whose deposits are below Sh100 million, and are neither virtual nor diaspora based, are expected to be overseen by the respective County Government Cooperative Offices where they operate. This will ensure that there is no room for any Sacco to operate without adequate government oversight. Since the establishment of Sasra in 2010, it has been supervising and regulating Deposit- Taking Saccos which operates in a banking-like manner and offers similar banking services as those in the mainstream banking sector. In its (Sasra) official publication as of March 2021, there are 175 DT- Saccos in the country. However, those that do not undertake banking-like business popularly known as Bosa only or the Non-withdrawable deposit taking Saccos have never been prudentially regulated until the new regulations were published in May 2020. The new regulations are expected to bring the designated Non-DT-saccos at par with their DT-saccos counterparts in terms of supervision and regulation, under Sasra, immediately upon the expiry of the deadline. The Regulator has provided details on its website on how the targeted Saccos can achieve compliance. The Non-DT-Saccos are therefore in race to meet tough new regulations
Government publishes Sacco regulations By Malachi Motano The government has now published Sacco Society’s (Non-Deposit Taking Business regulations 2020 vide the legal notice No. 82 of 2020. They prescribe measures to be complied with by all Sacco societies undertaking the specified Non- Deposit Taking (NDT) business popularly known as Bosa business. According to the Sasra Acting CEO Peter Njuguna, regulations 2020 specify NDT Business for the purpose of section 3(2) of the Act on the non-deposit taking business (Bosa). Bosa Saccos total withdrawable deposits from members are equal to or exceed a sum of Sh100 million. The Saccos mobilises membership and subscription to their share capital through digital or any other electronic payment platforms (popularly Non Virtual
Peter Njuguna , Sasra Acting CEO. or Digital Sacco). The Specified Non- Deposit Taking Business also applies to cases where the Sacco society mobilises membership and subscription to their share capital from persons who are ordinarily resident outside the country (Diaspora Saccos). The Regulations 2020 which took effect from January 1, 2020 require all Saccos undertaking the specified Non- Deposit Taking to comply with the same. Consequently, all Saccos undertaking specified Non- Deposit Taking business as prescribed in the 200 regulations are required to secure compliance with the Act and the regulations 2020 by making appropriate application to the authority for authorisation in accordance with the regulations 2020 within six months of the commencement of the Regulations 2020
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SACCO REVIEW | 3
SACCO LEADER
"The success of co-operatives depends largely on the governance structure. Regulations on these should be reviewed oftenly to be in line with the changing times." -CEO
Imarika boss Ngala’s promise as he takes office According to the new CEO, the diversification ensured that the Sacco survived challenges that hit fragile sectors like hospitality. By Malachi Motano After being in the co-operative movement for now 19 years, serving in various managerial capacities, George Yongo Ngala has finally been appointed the Imarika Sacco Chief Executive Officer. Imarika is a progressive Sacco that posts good performance and Ngala says as the CEO, he is he prepared to uphold the trend and raise the bar to greater heights. Formerly deputy Sacco CEO, Ngala intends to not only to make Imarika Sacco the most agile financial institution but also to meet the expectation of members by consistently developing visionary products to change their lives. He says in five years, the Sacco
would have reached out for more members within and outside the Coast region through the utilization of the innovative digitally enabled solutions and outreach. He says his immediate focus is to ensure the implementation of the remaining targets of the Sacco’s 2018-2022 Strategic Plan started by his predecessor Mr. Daniel Masha and review it to develop fresh targets. “I would also like to put more emphasis on proper structures that will empower our systems to improve decision making at various levels of the Sacco to improve on service delivery.,” said Ngala. He added that they will keenly focus on performance management so as to try and create a performance driven culture that will hopefully transform Imarika Sacco into a more professional organisation. And finally, they will also focus on innovative digital transformation that will be supported by research. He promised the members and clients to expect a more responsive and professionally run organisation that will seek to provide personalised services to meet their needs. The clients should also expect better and newer products and services and information empowerment since knowledgeable members are better placed to empower
Mr George Yongo, Imarika Sacco CEO. themselves economically and socially. He says 19 year experience in the industry has been fulfilling and he has witnessed tremendous growth in membership. “When I joined the Sacco had less than 5,000 members but now, we are talking of over 10,000. I have seen how the society has touched its members by enabling them to acquire assets,” he said. Ngala added that members have educated children and also pursued further studies themselves, set up businesses and even take care of hospital bills using money from the Sacco.
He added that through the collaborative efforts with other societies and stakeholders they have seen the Sacco movement grow from strength to strength. Even though he is taking over a Sacco that has progressively posted good performance, he is not worried of upholding the good standards. “The good thing is that I have been part and parcel of the team that has helped shape the performance of the Sacco having worked for such a long time in different capacities,” he explained. He said although the business environment keeps on changing like what happened during the current pandemic, he will try to be more alert and flexible in making decisions so as to remain the Imarika clout. He also promised to ensure that all stakeholders are empowered to undertake their roles competently and also develop agile structure that will allow flexibility in decision making at all levels. To him, building a strong coherent team will also be key to achieving the desired success. Reviewing troubled 2020 financial year, he admitted that Covid-19 clearly brought unprecedented challenges all over the world. “We have seen lives being shattered, economies being battered, so
many livelihoods being negatively affected and a deep sense of tremendous stress across the globe,” noted the CEO. "Imarika Sacco, he added has also not been spared but they we used a common bond with members and diversified membership spanning across many sectors," he added. According to the new CEO, the diversification ensured that the Sacco survived challenges that hit fragile sectors like hospitality, private institutions and individual. They depended on many other sectors which remained relatively stable and enabled the society to continue thriving even under the unique circumstances “With Kenya’s Sacco sector currently ranked number one in Africa and number seven in the rest of the globe and by looking at the countries ahead of us, it is clear that well managed co-operatives can play a significant role in building economies,” he added. He said the government has done so well in coming up with supporting laws and regulations for the movement. He, however, said they need to be reviewed from time to time due to the changing dynamics of the operating environment. “The success of co-operatives depends largely on the governance structure. Regulations on these should be reviewed oftenly to be in line with the changing times,” he stated. He says taxation laws have also been punitive given the unique model of Saccos and should also be improved.
PSV Saccos to become co-ops By Our Reporter The State Department of Cooperatives (SDC) is in the final stages of transforming passenger transport Saccos into co-operatives. The Commissioner for Co-operatives Geoffrey Njang'ombe, says the process is now only awaiting stakeholder’s sensitization. Draft by-laws to ensure realization of the transformation and rebranding from PSV Sacco to Transcoop have already been published. The by-laws include the decision-making organs and implementing structures and their powers. They focus on how business is conducted in adherence to agreed code of conduct in collaboration with other relevant organs such as the police or licensing bodies in enhancing self-regulation. The transformation is expected to enable transparent accounting for money received in the society, hence the current Sacco business will be delinked from the transport co-operative society. The SDC, therefore, plans to carryout nationwide stakeholder empowerment programme on the new development for full imple-
mentation. “We intend to meet with all stakeholders in the matatu industry, through seminars and workshops in different places and towns to help them understand the development,” noted Njang'ombe. Committee members of the existing PSV Saccos will attend sensitization meetings on the transformation organised by the National Transport and Safety Authority (NTSA) and other players in the transport sector. Each committee will organise sensitization meeting for their members explaining the new changes, implications and ratification of the bylaws then present amended bylaws to the Commissioner for Cooperatives Development for registration. The PSV owners will be required to brand their vehicles with the name Transport Co-operative (‘Trans-Co-op’) or such other agreed acronym for PSV Transport Co-operative Society. Each society will be required to develop an enforceable code of conduct and all the elected leaders will then go through an intensive training on their expected roles.
They will also train on the creation of unions and federated structures for advocacy, lobbying and representation on the sub county, county and national level of the NTSA structure. Every transport Society is to consider the possibility of either delinking or strengthening the existing savings and credit as an activity within the society to include all
Geoffrey Njang'ombe, Commissioner for Co-operatives.
players. Njang'ombe said the importance of the sector that is primarily owned by private individuals as well as companies and co-operatives cannot be underestimated as it employs hundreds of Kenyans. The ripple effect of the industry also impacts positively on others directly and indirectly as evidenced by the matatu sector, whose outreach spreads to touts stationed along the routes, car wash attendants, mechanics, tea providers and insurance agents. Astronomical growth of the public service vehicles, particularly Matatu transport co-operatives has created challenges of overcrowding in literally all towns in Kenya. That has created stiff competition which has forced owners and employees to sometimes engage in unorthodox tactics of providing the service. “That led to disorderly provision of service as characterized by lack of uniform standards and disregard for prevailing road safety requirements,” he says. The State Department for Cooperatives has, therefore, developed a framework that would ensure
structured institutionalization. That would guarantee internal self-regulation mechanism and create uniform operational standards across this sub sector. The government led by Ministry of Transport and NTSA had a prefixed idea based on the success stories portrayed by 2NK, KUKENA and NENO Saccos. “These Saccos have management teams that are able to create self-regulation structures for route operations coupled with a successful Sacco business model,” says the Commissioner. That level of management was driven by the leadership style and capability that was not institutionalized as the Saccos by-laws had nothing to do with route management. The SDC then adopted a proposal to upscale the model, which had a structural defect that was adopted. Among the challenges were that despite of the Sacco management gaining the Transport Licencing Board (TLB) password, they lacked the necessary framework to control the actual operations of the vehicles.
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JUNE, 2021
CIC Wins Decade of Excellence Insurance Kenya 2021 Award
I
nsurance and proud to be recognised i n v e s t m e n t globally. This award echoes firm CIC our continued commitment Group has to our clients to provide been feted as the win- world class insurance serner of the Decade of vices for the past decade.” Excellence Insurance Remarking about the award, Kenya 2021Award Joseph Kamiri, CIC Generduring the 2021 Glob- al Manager, Marketing and al Banking & Finance Customer experience statAwards. ed: “We have continued to The awards re- innovatively create customflect the innovation, ized products for our clients achievement, strat- that meet their needs in an egy, progressive and evolving world. We have inspirational changes strived to ‘keep our word’ taking place within to our customers in the past the financial sector. decade and we are glad that C o m m e n t i n g this effort has been recogabout the global rec- nised globally. ognition, Patrick In December 2020, CIC Nyaga,Life CICCompany Group General insurance was deGroup of the Year, CEO said: ‘We are clared the Best Automotive
AKI Awards Overall Winner 2018 Patrick Nyaga, CIC Group CEO.
Insurer at the Automotive Industry Excellence Awards, 2020, coming a year after the company won the Most Preferred Private Vehicle Insurer at the same awards held in 2019. CIC was also feted as the best Motor Insurer at the Cheki Awards in December 2020 at a time the company was repositioning itself to become the market leader in general business. The Global Banking and Finance Awards reflects the innovation, achievement and inspirational changes taking place within the Global Financial community.
AKI Group Life Best Practice
Japheth Magomere, CIC Group Chairman.
CIC INSURANCE GROUP PLC CIC GM for Co-operatives Richard Nyakenogo (left) hands over a Group Credit Life claim dummy cheque to Kenversity Sacco CEO Alfred Korir. CIC prides itself as the main insurer of co-operatives in Kenya.
CIC Group Headquarters in Nairobi. The firm was feted at the 2021 Global Banking & Finance Awards.
We are proud to be recognised globally. This award echoes our continued commitment to our clients to provide world class insurance services for the past decade’. -Group CEO
CIC Group Regional Manager Zachary Wambugu (left) and Branch Manager Nyahururu Faith Kamau present a dummy cheque to Mr Andrew Kiongera (centre) GM Highlands Plants. The insurer was honouring a workmen's compensation claim.
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SACCO REVIEW | 5
CIC Group wins big at Motor Insurance and Automotive Awards CIC Insurance Group, a leading financial service provider has been named the Best Motor Insurer at the Cheki Awards, 2020. The win comes at a time when the company is repositioning itself to become the market leader in general business, following a recently concluded five-year strategic plan development process, for the period 2021 to 2025. Commenting on the award recognition on December 22, 2020, GM Marketing and Customer Experience Mr Joseph Kamiri stated that technology had unearthed opportunities that made it easier to reach customers. “Digital platforms have offered cus- Group Life Company of the Year, tomers the convenience of shopping for a car and insur- AKI Group Life Best Practice ance options at the comfort of their homes or offices which is key for businesses especially during this Covid19 CIC INSURANCE GROUP PLC period,” said Mr Kamiri. While handing over the award, Cheki Kenya CEO, Resian Leteipan said, “innovation and customer centricity is a key area to focus on if businesses are keen on GM CIC General Dickson Ireri (left) receives the Best Motor Insurer Award 2020 their growth. CIC has clearly from Cheki CEO Resian Leteipan at the CIC headquarters in Upperhill. taken time to consider current market demands and this claims, the company has im- a game changer for CIC As- through technology plataward is a testament to that.” plemented systems to aid the set Management, which leads forms. We are committed to CIC Group has invested process, a factor that has con- in assets under management this because our clients rein technology to drive its tributed to the growth of its with a 39% market share. main a priority,’’ added Kabusiness. The company has medical business. As far as ‘’CIC customers continue miri. made products accessible technological innovations go, to access and top up their The company is keen on through online and mobile the company has adopted the investment accounts, pay responding to changing cusplatforms making it easier to use of artificial intelligence for their insurance policies, tomer needs, which it beattract customers locally and in its asset management busi- and access related services lieves will be a major differin the region where the insur- ness to provide services to its er has a footprint. To address customers. This is set to be the challenges in fraudulent
AKI Awards Overall Winner 2018
President Uhuru Kenyatta greets CIC Group Chairman Japheth Magomere, OGW during the 2019 National Ushirika Celebration at KICC. Magomere doubles as National Ushirika Council Celebrations Chairman.
entiator in the market. Earlier on December 17, 2020 –CIC General Insurance, a leading general insurer in Kenya had been declared the Best Automotive Insurer at the Automotive Industry Excellence Awards, 2020. This came a year after the company won as the Most Preferred Private Vehicle Insurer at the same awards held in 2019. Speaking when receiving the award, CIC Ag Managing Director General Business, Ms. Grace Nzivwa reiterated that the organization has continued to ensure the needs of its clients are met despite the hard times the country and entire world is facing. “Rolling out virtual certificates has enabled us to conveniently and continuously issue motor certificates to our clients wherever they are whilst adhering to the set Covid-19 regulations,” said Ms Nzivwa. “We will continue to focus on meeting our client’s expectations while keeping our word by managing and processing claims on time, as well as providing seamless services to our customers,” she added. According to the Insurance Regulatory Authority (IRA) industry statistics for the second quarter of year 2020, CIC General Insurance is the market leader in motor insurance commanding a market share of 8.1 per cent.
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FOCUS ON USHURU SACCO ADM
JUNE, 2021
Ushuru Sacco total assets hit Ksh 4.8 Billion By Malachi Motano Ushuru Savings and Credit Co-operative Society (Sacco) total assets hit Kshs. 4,848,102,663, a 14% growth from Kshs. 4,249,541,279 in 2019. The annual turnover (total revenue), also increased by 12% from Kshs. 444,844,968 to Kshs. 499,749,535, with members’ deposits increasing by 11% from a total of Kshs 3,422,840,210 in the year 2019 to Kshs. 3,788,517,156 in the year 2020. Still on the growth curve, the Sacco grew its Share Capital by 8% from Kshs. 238,211,279 in the year to Kshs. 257,292,052 and membership by 6% from 6,766 in the year to 7,152 in the year under review. During the same year, the amount of loans outstanding with members increased from Kshs. 3,087,366,072 to Kshs. 3,275,732,047, representing an increase of 6%. As a result of the Society’s good performance as contained in the Audited Financial Statements, the board proposed payment of Interest on members’ Deposits at the rate of 9% amounting to Kshs 246,082,370 and Interest on members’ Investment Savings at the rate of 6% compare to 2019 when the two were paid at the rates of 8% and 7% respectively. The Society also paid to the board of directors, supervisory committee branch officials amounts totaling Kshs. 2,800,000 compared to Kshs.
2,605,000, previously with the Staff Bonus increasing to 1,965,000 from 1,850,000 in 2019. The Society’s Front Office Service Activity (FOSA) opened its doors in the month of February, 2020 with high expectations that would see the Society grow to the next level. This entailed a number of activities to consistently r e -
(restrictions on loan guarantee), internal Audit, the Investment co-operative and governance. To date, the Society has managed to comply with most of the action areas except for the Capital Adequacy; the Institutional capital to Asset ratio which is still below required threshold of 8%,” said the Sacco National Chairman, Isaac Kiprop when he presented his report at the society’s 35th Annual Delegates Meeting (ADM) held at Maanzoni Lodge on Saturday, 20th March 2021. The Society also undertook development of new products and services as the Society embraced use of technology to create online platforms that allowed members to access products remotely. The Society’s mobile and online services through MSACCO platform were enhanced leading to upgrade of Ushuru Sacco National Chairman Isaac Kiprop making the M-Poa loan his presentation during the 2021 ADM. with the maximum amount period. We therefore committed view the Society’s ways of oper- to take action and implement on increased from Kshs 50,000 to ating in anticipation of increased all areas of compliance includ- Kshs 100,000 and its repayment need to deliver better customer ing; sufficient Capital adequacy, from one month to maximum of experiences to our members. Credit Risk Management- more three months. “The FOSA business howev- specifically geared towards loan In addition, it enhanced the er came with other requirements quality, Loan portfolio, clas- web portal features and has that the Society had to fulfill sification and provisioning, in- continuously reviewed the ICT and comply with over a given sider loans and credit exposure security, implementing recommendations of the ICT system auditor and those of the regulator for increased operational efficiency and compliance purposes. “Our Society maintained operational efficiency in the midst of a challenging year with increased activities brought about by the Covid-19 pandemic. We continuously reviewed and updated most processes ensuring that increased demand for online services is met. We also carried out member satisfaction and feedback surveys and as a result FOSA products and services were re-engineered to deliver more value to members,” the Chairman noted. The management conducted Review of SACCO By-laws which saw removal of the executive and investment committees from the board and which have been re-aligned to Finance and
Nairobi County Director of Co-operatives, Madam Dolphine Aremo expresses her satisfaction with how Ushuru Sacco is complying with SASRA requirements.
...Continued next page
The FOSA business, however, came with other requirements that the Society had to fulfil and comply with. We therefore committed to take action and implement on all areas of compliance including; sufficient Capital adequacy, Credit Risk Managementmore specifically geared towards loan quality, Loan portfolio classification and provisioning, insider loans and credit exposure (restrictions on loan guarantee), internal Audit, the Investment co-operative and governance. To date, the Society has managed to comply with most of the action areas. - Chairman
William Pudha, CEO.
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FOCUS ON USHURU SACCO ADM
Ushuru Sacco maintains an upward trajectory Board Members ...from previous page and Administration Committee, Education Committee, Human Resource and Governance Committee, Credit Committee and Audit Committee. The review also saw removal of the Branch Management Committees since the regulator requires that the Saccos maintain a central goverOnesmus Nzuki, nance structure. In order Vice Chairman. to ease co-ordination of the Sacco activities like member education, a provision has been made for the Delegates in each region to choose Regional team leaders. “Branch delegate meetings were also removed and it is now a requirement that the only congregation of the SACCO is the Annual Delegates Meeting (ADM),” says the Chairman. The Sacco also made provision for mode of voting to allow for online voting in our By-Laws having William Ndiritu, conducted a virtual ADM in Director. the year 2020 virtually and with the expectation to carry on with elections as per the notice convening any ADM. Requirements The society complied with the regulator's requirements among them; capital adequacy requirements to maintain a core capital of not less than 10% of total asset, a core capital of not less than 8% of its total deposit liabilities and institutional Capital of not less than 8% of its total assets among Keneth Ojiambo, other compliance issues. Chairman Supervisory “Whereas the Society Committee.
Dominic Mokaya, Hon. Secretary.
Samuel Wachiuri, National Treasurer.
Boaz Chimasia. Director.
Emily Obonyo, Director.
Supervisory Board members
Frank Robert, Member.
Christopher Ngilu, Member.
financial accounts under review and instead retain the funds so as to improve the ratio. This has seen the ratio move from 5.5% to 6.7%, a growth of 21% as compared to a similar period the previous year,” the Chairman says. The mobile banking platform has been enhanced to allow members withdraw up to Kshs 300,000 per day with Maximum of Martin Obara, Kshs 150,000 per single Director. transaction in line with Central Bank of Kenya (CBK) directives. Additional features that allow withdrawals to another number (Send funds to another number) and purchase of airtime were done during the year. Additionally, the Sacco has in place the members’ portal which allows members to check basic information like loan balances, next of kin details and guarantor details. Recently, Frank Robert, the Sacco launched its Director. online loan application a move aimed at improving the loan application process especialhas complied ly for members stationed away with the first two, from our regional offices as the institutional well as to ease the process for capital to asset is guarantorship. This will foster yet to get to regrowth in the loan book. quired threshold The Society is also in the and, therefore, to process of rolling out online improve the ratio, membership registration in the it is a general call near future in a bid to boost to us as a Society membership growth. To ento retain more hance stability of the ICT infraearnings and structure the Society purchased hence increase in two (2) new servers of high reserves. It is on speed to ease the process of onthis premise that line loan application and online we have decided Guarantorship as well as online not to declare any membership application. dividend on the
Delegates make their contribution during the 2021 ADM.
JUNE, 2021
8 | SACCO REVIEW
Saccos ill-prepared for virtual meetings
In March last year Njang’ombe, issued a circular allowing cooperative societies to pay dividends and interest on deposits without holding AGMs after the ban on social gathering was imposed by the State. By Sammy Chivanga Savings and Credit Cooperative Societies (Saccos) are dragging their feet on holding virtual meetings amid the continued ban on large physical gatherings in the Coivd-19 environment. Many Saccos have opted to put on hold their meetings with the Commissioner of Cooperatives and Sacco Societies Regulatory Authority (Sasra) giving them a window to delay until an appropriate time. This is despite health experts warning that Kenya may face another peak in coronavirus infections come July, delaying relaxation of control measures such as the ban on large gatherings. Their counterparts in the financial services sector such as banks have led the way in holding virtual meetings to vote on dividends and
The penetration of gadgets such as laptops and smart phones among Sacco members have come into focus, with cooperatives grappling to immerse their members into technologies such as Zoom and Microsoft Teams.
elect new officials. With the first case having been reported in Kenya mid-March last year triggering control measures from government, many cooperatives did not anticipate that this situation would take long. World Council of Credit Unions (Woccu), came up with a guide for Saccos planning virtual meetings, offering room for large cooperatives to give it a try. Saccos such as Kingdom Sacco had to send a written guide to delegates before holding annual delegates meeting. The guide ranged from how to access Zoom application, raising hands to ask questions and accessing documents. “Ensure that your dress code is presentable as you attend virtual annual delegates meeting as you would in a physical meeting,” the Sacco told delegates. However, in an exclusive interview with the Sacco Review, the commissioner of Co-operatives Geoffrey Njangombe says several factors—both internal and exter-
Kirinyaga County Cooperatives Executive member Dr Margaret Kibuchi receives a gift from Ollin Sacco CEO John Gathige and Board Chairman Harrison Gachugo during the Sacco’s 43rd Annual General Meeting. nal—stand in the way of the societies’ quest for virtual meetings. Mr Njang’ombe says that Covid-19 was an unanticipated occurrence that caught the movement off-guard given that even their laws have no place for virtual annual general meetings. “Even banks had to seek approval from the High Court. Cooperatives will have to amend their bylaws to provide for virtual meetings,” says Mr Njang’ombe. In absence of the place of virtual gatherings in their bylaws, the cooperatives have to seek the authority of the commissioner. However, just a few have come forth with this request. “I have given this expeditiously. We don’t take more than a day to grant authority for virtual meetings. The penetration of gadgets such as laptops and smart phones among Sacco members have come into focus, with cooperatives grappling to immerse their members into technologies such as Zoom and Microsoft Teams. In addition, Saccos are grappling with the many members who are not tech-savvy. This makes it difficult to hold general meetings and get quorum that can log in and participate in asking questions and voting. “Take for example the mama mbogas, many do not have smart phones. That is a major gap. Societies cover everybody but not everybody is very literate to operate these gadgets. You therefore find apathy in opting for virtual meetings,” said Mr Njangombe. “Sometimes the people with smart phones, without 4G it is a challenge to enjoy the meetings.” Saccos, just like like banks and other large corporates, have been silent on the cost of these virtual AGMs on members. Members have been left on their own to foot internet costs such as data bundles to stream the meetings. This has seen such organizations save a lot of money such as venue booking, lunch, transport and
merchandise costs that they used to incur on physical gatherings. With no willingness to transfer
part of these savings to members in order to shield them from internet costs, the use of virtual meetings has not gone down well with members. Small societies are particularly avoiding the virtual meetings, choosing to put on hold their gatherings until an appropriate time. Those with very low membership are able to hold meetings without going against the coronavirus rules on physical gatherings such as filling not more than a third of the room. “Only big societies such as Unaitas have led their virtual meetings with low reluctance. But it will take time for individual societies to build any capacity for virtual meetings,” said Mr Njang’ombe. Other cooperatives are experimenting with hybrid meetings where some members attend virtually while others do so physically
without flouting the Covid-19 laws. This is seen as a way of offering a learning curve to members with hope that they will in the long run take this as the new normal way of conducting business. But while Saccos trail banks on meetings, they were on the forefront on figuring out what to do with dividend payments in the absence of AGMs. In March last year Njang’ombe, issued a circular allowing cooperative societies to pay dividends and interest on deposits without holding AGMs after the ban on social gathering was imposed by the State. He also allowed Saccos to spend up to half of previous year’s budgets until the budget estimates for 2020/2021 financial year receive approval at AGMs.
Sacco Societies Regulatory Authority(SASRA) for the launch of strategic plan and service delivery charter
Sacco Soci for the laun service deli
Ordinary Savings Investment Savings Main Loan Refinancing School Fees Loans Emergency Loans Jongea Loan Almasi Loan Shujaa Loan Tiba Loan Sasa Savings Account
Kwenzi Junior Account Likizo Savings Account Jaza-Jaza Savings Account Fixed Deposit Account Biashara Bora Account Pamoja Savings Account Salary Advance Imara Loan FOSA Pride Loan Pamoja Biashara Bora Loan
Ordinary Savings Salary Processing Electronic Funds Transfer(EFTs) Investment Visa Debit Card Savings Standing Orders Bankers Cheques
Main Loan Refinancing School Fees Loans Emergency Loans
OUR VISION:
To be the world leading SACCO in empowering members for quality life
OUR MISSION:
To provide quality,efficient and affordable products and services while exploiting new technological frontiers
OUR OBJECTIVES:
To improve the economic lives of our members through provision of quality products and services.
OUR CORE VALUES:
Simple,Proficient,Ethical,Cohesive
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JUNE, 2021
FOCUS ON KSPC LEADERS CONFERENCE
SACCO REVIEW | 9
KSPC to promote professionalism in Co-operative Sector Trust, integrity critical in cooperative governance Malachi Motano The current global trend, going back to the recent global financial crisis has brought to the fore the importance of trust, confidence and integrity in the financial services sector, with co-operatives not left behind. This is subjecting the sector to continuous scrutiny on their values, professionalism and the work ethics, prompting a host of initiatives both domestically and globally, aimed at strengthening the industry given the significant role of financial institutions to the broader public interest of the society and the overall economy.
Co-operative PS, Ali Noor Ismail addresses the media after official opening of the first KSPC leaders' conference in Nairobi. and sanity of the co-operative enterprise. The need is even more now, given the increasing complexities brought about by more competition and evolving regulatory requirements, more offerings of sophisticated products and the growing cross-border activities,” said Prof. Gicheru.
She says with the establishment of KSPC, cooperators embarked on a long journey of creating a landscape of talent development with strong culture of professionalism, integrity and ethics among co-operative practitioners which instills confidence and capability to the cooperative movement and better service of public interest. “It is expected that with Prof. Esther Gicheru, full operationalization of the KSPC Chairperson. professional body, professionalism with the coopA case study by Sacco Review erative movement will improve, at Kenya Society for Professional placing co-operatives at their best Co-operators (KSPC) establishes position in national development,” that maintaining public confidence says the professor. is critical. The idea to establish a profesAccording to Professor Esther sional organization for the coopGicheru Chairperson of KSPC erative sector was mooted in 2012, council, it is in the industry’s inter- however it did not take off immeest to always place public interest diately despite being welcomed above everything else in order to by the majority in the co-operative enjoy the confidence that ensures movement. long-term growth. “The idea was re- visited again She said such expectations are during the National Co-operative even greater in cooperative enter- policy making process after the prises given that the professed value stakeholders noted a deteriorating of the industry is driven by the co- trend on professionalism and poor operative values that promote fair- image of the sector. ness, equality and justice. “It is then that the National “This means that we are duty- Cooperative policy recommended bound to observe the norms of high the establishment of a professional ethical conduct to uphold the values
body for the sector to address non availability of performance standards within the co-operative movement, gradual degradation of the co-operative business model and other business models and failure to recognize the co-operative practice as a profession,” says Symon Mburia, KSPC acting CEO. After several consultations among stakeholders, KSPC was registered in 2017 under the societies Act Cap 108, but was officially launched in 2018 with the main objective being to promote co-operative management as a profession by promoting, registering, developing and regulating co-operative professionals. Other objectives of the Society include promoting co-operative management as a profession, register persons who have the required professional and ethical standards and issue certificates, establish and publish monitor standards and practice among members, promote research in co-operative management, publish books, periodicals and articles on cooperative matters, promote medium of communication and exchange information
and knowledge promote regional and international networking, prescribe tests of competency, promote and protect welfare and interest of members and encourage inter-professional collaborations. Since it’s establishment four years ago, it’s membership has grown to 150, has developed a training curriculum, has come up wit examinations procedures, signed MOU with KASNEB on administration of the examinations, and also applied for registration of KSPC qualification and it’s accreditation with KNQA and accrediting training institutions. KSPC also developed a strategic plan for the years 2020-2021 as well as drafting KSPC bill In terms of membership, KSPC has four categories which include students, associates, full, honorary and corporate members. Students must be person’s undertaking certificate, diploma or degree in co-operative management with no professional qualifications but pay Sh1000 for registration and another Sh1000 for the annual subscription. The associates must have Bachelor’s degree in any discipline with
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This means that we are duty bound to observe the norms of high ethically conduct to uphold the values and sanity of the cooperative enterprise. The need is even more now, given the increasing complexities brought about by more competition and evolving regulatory requirements, more offerings of sophisticated products and the growing cross-border activities. -Chairperson
three years experience in co-operative management. The registration fee is Sh5000 and Sh5000 for annual subscription. Full members must have Bachelor’s degree or Post Graduate qualification in co-operatives, three years’ experience, pay Sh10, 000 for registration and another Sh10, 000 as annual subscription.
KSPC Council members in a group photo after the opening of the leaders' conference.
JUNE, 2021
10 | SACCO REVIEW
EDITORIAL
EACC should recover looted money The red flag raised by the Ethics and AntiCorruption Commission (EACC) over graft and mismanagement in Saccos is a timely intervention that should be supported. Although regulations in Saccos have greatly improved their management in recent years, looting of member’s savings is still rampant in some small entities. The case of Kumisa Savings and Credit Co-operative Sacco in Kiambu is an example of how deep rooted the rot is in the country. As reported in a story carried in this edition, the Sacco based at Kirigiti in Kiambu town, also referred to as ‘Hustlers Sacco” is a savings society which has collapsed with millions of shillings in members savings. Helpless members have been left crying foul long after the crooked official bolted with their hard earned savings. All the over 3,000 members can do is appeal to the Directorate of Criminal Investigations (DCI) and the Commissioner for Co-operatives to help them recover their savings The bigger challenge is that the Commissioner for Co-operatives wants the Sacco to pay some money for investigations to be carried out and yet the Sacco accounts balance is zero. That is why we commend EACC Chairman Retired Arch-Bishop Dr Eliud Wabukala for the tough stance he has taken against officials engaging in corruption and other unethical practices in Saccos. It is worrying that EACC has received and analysed 372 complaints touching on cooperative Societies from the year 2013 to 2020. Out of those 47 fell within the mandate of the Commission and were taken up for investigations while about 31 of the complaints touched on administration issues involving low and middle ranks of Saccos countrywide. The EACC reports also revealed that 91% of the persons involved were in the low and middle level ranks of the institutions, which means the net must be cast wider to catch the culprits. He said that 114 of those complaints, translating to 31% of the total reports were about administration, which is a mandate of the regulator, Sacco society regulatory authority (Sasra). Sasra should, therefore, also bare its teeth and bite hard to ensure that rogue officials who bleed the Saccos are reined in so that members can enjoy their savings without worrying about being conned. The assets of officials who have looted from Saccos should be forfeited and auctioned so that aggrieved members can get back their money.
SACCO REVIEW
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OPINION How technology can support growth of Saccos in Kenya The Covid-19 pandemic and its disruptions have introduced a new way of life not only at the individual level, but also in business operations. Virtually every sector of the economy has been affected. This has essentially changed human and consumer behaviour and has further led to a great shift in priorities and preferences that we all have to adapt to and cope with going forward. Businesses are back to the drawing board to craft workable strategies that will guide their operations in what we have christened as the new normal. It’s not news that the Savings and Credit Co-operative Societies (Sacco) sector in the country was affected. Sacco members affiliated with aviation, hospitality and other industries tapped into their savings to sustain themselves as these sectors were severely hit. Fortunately, thanks to technology some Saccos managed to continue
Cynthia Wandia serving their members even as they iterated around new ways to survive and thrive. Digital consumption was at its all-time highest during the pandemic. Technology aided a number of operations in many industries across the world. We saw a boom in e-commerce and food delivery space. This then welcomes the much-needed discourse on the increasing need for Saccos to embrace technology in order to grow and better serve their members. Saccos, being significant players in the financial sector and key contributors to the country’s GDP, can leverage the opportunities presented by technology to
grow prospects, build wealth and positively impact members. Technology will facilitate a lot of processes post-Covid-19. Several opportunities will be in the digital space thus Saccos need to rightfully claim their stake in this race in order to take care of members’ needs. The baseline infrastructure is already in place: internet access is widespread and increasingly affordable and there are a number of vendors offering cloud-based core banking systems depending on your Sacco needs. This means that there are very minimal investments needed to move fast and start operating in the digital space. With member’s preferences also shifting, a lot of them are now consuming digital products. This means that they will now prefer online services and tech-enabled interactions to avoid the strain of visiting Sacco offices for simple administrative queries. Embracing
technology to supplement Sacco functions will help to bolster capacity and grow productivity in terms of reducing operational costs. An automated system will serve many members at a time 24 hours a day, hence creating convenience. Saccos today have to play the part and entrench technology as the core infrastructure to run operations postCovid-19. We are in the digital age and virtually all the key sectors of this economy are taking advantage of the options in the digital space. Saccos are no exception, as stakeholders in the space we continue with the rallying call of encouraging all Savings and Credit Co-operative Societies (Saccos) to accelerate their digital transformation. It is the best way we can realize the full potential of this sector that has for years helped Kenya’s broader population build wealth. Cynthia Wandia is cofounder and CEO of Kwara.
OPINION
JUNE, 2021
SACCO REVIEW | 11
Does the co-operative sector deserve a stand-alone ministry? The important role played by co-operatives in the socio-economic lives of many countries across the globe is not in doubt. Co-operatives are engaged in diverse economic sectors including agriculture, finance, housing, trading, among many others. They have also played a critical role in not only creating jobs but also generating incomes for sustenance of many livelihoods globally. Do co-operatives, therefore, deserve a fully fledged Ministry in Kenya which is reputed to have the largest and most vibrant cooperative sector in Africa? Dr Charles Ogina of Ogina Joro & Associates who is an eminent consultant in this field and a holder of a PhD in Co-operative Studies has opined on this platform as follows: THAT in the first place, cooperatives should not have been devolved to counties by the 2010 Constitution. THAT given the importance of co-operatives in the Kenyan economy, they should have been granted a fully fledged Ministry. How many of you share his views and how many differ with him and why? In advancing the above argument, the eminent professional revisits the ILO Recommendation 193 on the “Promotion of Cooperatives” that was adopted by the ILO General
Assembly on 20th June 2002.(to replace the earlier one of 1966). During the said Geneva Assembly, the importance of co-operatives was underscored given its role in the creation of jobs as well as improvement of the of peoples’ socioeconomic welfare globally. Governments were, therefore, encouraged to formulate progressive policies as well as legislations that could spur growth of co-operatives in their respective countries. Notwithstanding the foregoing, the necessity of maintaining the coperatives’ unique Identity and ideals was also acknowledged and affirmed. The Assembly also endorsed the “Statement of Co-operative Identity “issued earlier by the ICA General Assembly that met in Manchester UK in 1995 during its Centenary celebrations. That Assembly also revised the seven universal co-operative principles that were subsequently to be domesticated in the municipal laws of all ICA member countries, Kenya included. Regarding the views advanced by Dr Ogino, I beg to differ slightly on the twin-issues he has raised on the following grounds.
Fred Sitati 1) The 2010 Constitution caps the number of ministries at 22. Given the diversity of sectors, the President has created State Departments under the various Ministries and Cooperatives is one of them. Currently it is placed under the Minstry of Agriculture, Livestock, Fisheries & Co-operatives and headed by a Cabinet Secretary (CS) assisted by Chief Administrative Secretaries (CASs ) and Principal Secretaries (PSs). 2).Co-operatives sector was devolved by the said 2010 Constitution. This effectively meant that the bulk of functions were transferred to the 47 counties. In terms of policy and regulatory frameworks, the counties were expected to customise both the National Co-operative Policy as well as National Co-operative Societies Act
(Cap 490) (once aligned to the 2010 Constitution, unless the BBI initiative introduces other changes in their County Assemblies. 2) Given the above arrangement, counties are free to innovate and do all that is permissible under the law to empower their members through co-operatives registered in their areas . However, this doesn’t imply that the freedom is absolute - far from it! The constitution envisaged a scenario where the two levels of governments would complement and collaborate with each other, when necessary. The various co-operative functions were unbundled thereby identifying “Exclusive”, “Shared or Concurrent” jurisdictions and “Residual” functions that were to be assigned to the two levels of government. That was largely influenced by the availability of capacity in terms of resources including requisite competencies. And in the event the County laws conflicted the national laws, the national law would override the county laws to the extent of the inconsistency or conflict. With the foregoing in mind, it would be extremely difficult if not impossible to seek to centralize the various functions already devolved to the counties. One other factor to
consider moving forward is that, our cooperatives have come of age! The paternalistic role of government should be scaled down reasonably because times have changed drastically courtesy of technology. The situation is further complicated by the coronavirus that has this year visited upon all sectors and is ravaging both lives and livelihoods in its wake. The new Normal, according to me, behoves stakeholders in the sector to focus more on building the capacities of county teams so as to empower them to steer cooperatives in their areas to prosperity by encouraging them to become innovative as they exploit the emerging opportunities post Covid-19 period. Additionally, as much as possible the youth should be mainstreamed since they have hitherto played a peripheral role in this dynamic sector. In summary, my feeling is that, a stand-alone ministry for co-operatives under the current constitution is not only unnecessary but is also impossible to secure. Let us hear your views on the same. Why Saccos don’t need co-ops ministry. Sitati is a consultant in the Sacco Movement.
Prudent planning for success of cooperatives Co-operatives today have become very important drivers of personal financial growth and the route to member’s economic empowerment. Since the first co-operative society was formed in Kenya and its subsequent success, both the private and public sectors embraced them as vehicles to financial breakthrough Co-operatives must adopt the best policies, bylaws and strategies because good planning is the basic and most important principle for success in any organisation. The following are very important concepts in co-operative planning: 1. Vision: This refers to an idealized picture of the organization i.e. what the organization should become. A co-operative society needs to figure out its present state and visualize what it wants to become in the future. A vision should be brief,
elaborate, achievable and realistic it’s the desire to live to its vision achieving the growth of the cooperative society. 2. Mission: This is the aim of the co-operatives. It defines the backbone that gave birth to the cooperative. It’s important to understand the motivating factor that made members join the co-op and, therefore, always ensure it protects the reason for its formation and no other mission should supersede the reason for the formation of the co-operative. 3. Purpose: These touches on the purpose of the co-operatives to individual members. Substantive measure should be set to ensure members get the value for their investment. Questions to be answered include: Is the marketing co-operative able to get better prices for their products? Is the Sacco offering
Ngugi Ruo timely credit, or the Sacco able to mobilize adequate members’ savings? 4. Goals: These give a sense of direction for the activities of the organisation. They give guidelines towards which more detailed and specific plans are directed. A good co-operative board should ensure the goals of the co-operative are achieved. It’s the binding factor if the co-operative is to remain afloat because a society without goals is as good
as dead at its inception. Goals drive the cooperative to great heights. 5. Objectives: These are the end results that must be achieved in order to carry out a mission (they are simple forms of goals). Whenever members achieve their objectives, cooperators become motivated and hence loyalty to the cooperative grows, which makes members put in more effort to grow their cooperative in order to reap more. 6. Policies: These are general guidelines the Board or Directors should follow in making decisions of whatever nature in the coop activities. The co-operative with good policies always makes great strides because every step is guided by member’s decision. It is prudent to adopt policies that should be followed in the running of the coop nevertheless the policies should be flexible to accommodate unforeseen
circumstance 7. Strategies: These are broad programmes of activities performed to achieve organisational objectives. Good strategies will always attract great results. 8. Procedures: These are customary methods for handling activities. I request cooperative boards to ensure a good plan is in place because at whatever growth stage planning is a key ingredient and catalyst cooperative growth. Experts should be hired to help develop good visions and strategies, policies and procedures in order to meet members and co-operatives purpose, goals and objective as well us being cognizant of the entire coops mission The author is a police officer stationed in the National Police College Embakasi A Campus and holds a degree in Co-operative Business from the Co-operative University of Kenya
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ADVERTISING FEATURE
JUNE, 2021
Dhabiti Sacco share capital grows By John Majau Dhabiti Sacco share capital grew from Sh67, 711,322 in 2019 to Sh69, 877,497 in 2020, reflecting an improving investment culture among members. Non- withdrawable deposits also grew from Sh90, 462,844 in 2019 to Sh101, 195,633 last year. During the 34th special Delegates Annual General Meeting held at MCK Antobochiu Sacco Chairman Mr Augustine Mugambi said Sh363,682,849 was advanced to members as loans compared to Sh355,491,215 given the previous year indicating a growth of Sh8,191,634. However, Mugambi lamented that they recorded a gross income of Sh124, 344,262 last year compared to Shs131, 533,476 recorded in the previous year. He said despite the Covid-19 pandemic the Sacco was able to meet the members loan needs. Loan provisions stood at Sh74, 928,717 in 2020 compared to Sh74, 521,588 in 2019. Mugambi encouraged del-
Mr Titus Munjuri, Dhabiti Sacco CEO. egates to preach to the members they represent the need to make loan repayments in due time and due amounts to avoid growth of provisions which eats into our incomes at the end of the year. He said that the members’ savings stood at Sh229, 285,864 last year compared to Shs258, 930,291 the previous year after members opted to withdraw more than depositing cash. This was attributed to the increased uptake of share-based loan products. He called on members to continue subscribing to the Mbanking 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
Dhabiti Sacco Board Chairman Mr Augustine Mugambi gives his speech during the Sacco’s 34th AGM held at MCK Antubochiu on the outskirts of Maua town in Meru County. be a robust one. He revealed that the housing unit of the Sacco has been registered and will be operational soon. This 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. The chairman said due to prohibitions in gatherings, the sacco leadership cannot hold sensitization and education meetings to members on the proposals to be implemented. Dhabiti Sacco also acquired two vehicles, Toyota Hilux and Toyota Succeed to improve transportation between the branches. He said despite the challenges experienced they were able to carry out limited member sensitization meetings in 2020 touching on Loan and Loan Management. Mugambi added that they will continue to monitor the situ-
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I am urging the locals to join the Sacco in large numbers owing to the unique and outstanding services we offer to our esteemed members. We have accounts for the minors (TOTO),”Inua Jamii” for the elderly which is done in partnership with the Kenya Commercial Bank (KCB). -CEO
ation and if it allows they will communicate the schedule of 2021 education meetings in due course. Dhabiti Sacco Chief Executive Officer Mr Titus Munjuri said since the Corona outbreak, business has been negatively affected with the company recording a decline in profitability. The CEO called on the members to diversify on what they are doing especially now that miraa sector has been adversely affected by the pandemic. He said the Sacco finances education through school fees loans but insisted members must prove the money is meant for school fees before it is released. “Sometimes members borrow money for a certain purpose but split it for other use. We will have to first ascertain the money will be used for the purpose it is intended for and not diverted to
A Dhabiti Sacco delegate airs his views during the Sacco’s 34th AGM held at MCK Antubochiu on the outskirts of Maua town in Meru County.
other purposes,” said Munjuri. He said the best place to deposit money and get good return is Dhabiti Sacco and called on the locals to join the Sacco. He said the delegates have both the individual and collective responsibility to market the Sacco noting that the members support is paramount. 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. “I am urging the locals to join the Sacco in large numbers owing to the unique and outstanding services we offer to our esteemed members. We have accounts for the minors (TOTO),”Inua Jamii” for the elderly which is done in partnership with the Kenya Commercial Bank (KCB). “Majority of schools, teachers, traders, churches, tea and coffee farmers have all opened accounts with us while the miraa farmers bank their savings with us at an individual level. Demand for Mpesa services is com-
Mr Mariara Kigotho, Dhabiti Sacco External Auditor. fortably met at all our branches. We have ensured that we have our own agents at the Equity and Cooperative banks for easier service delivery,” said Munyuri. “Competition is healthy. Do not panic. The best thing is to ensure that you are not driven out of the market. We are not scared of competition”, he explained. He said the greatest challenge currently facing the Sacco industry is the default of loans by members. 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.
JUNE, 2021
SACCO REVIEW | 13
“Our Sacco Our Growth”
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BUSIA
Ojaamong top saver in assembly sacco
By Washingtone Okellah Busia Governor Sospeter Ojaamong was the top depositor in Busia County Assembly Savings and Credit Co-operative Society (Sacco) in the 2019-2020 financial year. Despite challenges occasioned by the Coronavirus pandemic, the Sacco declared cash dividends of Sh500,000 that was shared by its 309 members. SACCO chairman Gabriel Erambo released the results whle addressing members during the Society’s 6th Annual General Meeting (AGM) at Busia Agricultural Training Centre. Assembly Speaker Bernard Wamalwa emerged the best saver in shares while the best recruiter for new members in the same period was Mr Erambo. “When were elected into office on March 17, 2018 about 142 mem-
Busia County Assembly Sacco chairman, Gabriel Erambo addressing the press during the AGM at Busia Agricultural Training Center recently.
bers had withdrawn but the number started growing and among the new members are 17 MCAs from Kakamega County, four from Bungoma and two officers from Kamiti Prisons,” the chairman said. The Society paid out Sh17m as loans at interest rate of 1.3 per cent to members on reducing balance. Among the challenges the Sacco faced were the non-recovery of Sh16.6m, which included Sh6.7m from loan defaulters and Sh9.1m financial impropriaty. The Sacco has recorded tremendous achievements including registering Busia County Assembly Housing Sacco Society Ltd, purchase of a Sh12m executive bus which has to date generated income of Sh1.5m. The County Director Co-operatives, Oscar Odaba underscored the need for the Society to have an electoral and nomination policy to streamline the process and avoid
complaints. Mr Odaba said a lot of education is lacking at all levels and cautioned Saccos against engaging in financial misappropriation, warning that the Anti-Sacco Fraud unit will not spare corrupt officials. Erambo and his team including Florence Owuor (Vice Chair), Godfrey Balera (Secretary) and James Lwanyonyi (Treasurer) were reelected unopposed. Members include Pamela Wandera, Elizabeth Owuor, Sebastian Etyang and Elijah Mwaro. Malaba Central MCA Bernard Papa is the new Supervisory Committee Chairman, taking over from his Malaba South counterpart David Kokonya. The other member of the committee is John Adongo while Daniel Ote was elected unopposed as the Sacco spokesperson.
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JUNE, 2021
Imarika Sacco unveils mentorship programme to empower learners through the Imarika Foundation
Imarika Foundation Executive Director, Mr Peter Angore.
Imarika Foundation ED, Mr Peter Angore and Mr Jackson Gevera, Sacco's Marketing Manager display a dummy cheque for Sh270,496 towards sponsorship of 28 students during the mentorship event. By Tsozungu Kombe Imarika Sacco continues to empower leaners at the Coastal counties through series of mentorships and scholarships for the needy students, under a corporate social responsibility programme (CSR) by its subsidiary -Imarika foundation. For the year 2021, Imarijka Foundation has set a side Ksh 2.5 million as scholarships to enable bright but needy secondary school students who scored 350 marks and above from poor background to pursue their education dreams. “Currently, the Foundation sponsors only 28 bright secondary school students. We have however already identified the students to be placed on next programme and have sent them forms to fill. From July this year (2021) the Foundation will take 15 additional learners to raise the number to 43,” said the foundation’s Executive Director Mr. Peter Angore. The Executive Director said: “ Imarika foundation gives bursaries to students right from form one to form four and for one to qualify for the scholarships they should have scored 350 marks and must be indeed very needy.” He was speaking during the recent mentorship event in Kilifi town which was attended by 76 secondary school students drawn from Tana
Mr Renson Ndoro, Imarika Sacco Board of Directors Chairman, who was Chief Guest speaking during the mentorship event.
River, Lamu, Kwale and Kilifi counties where the Sacco operates. The event was graced by Imarika Sacco board of director chairman Renson Ndoro among other guests. The Chairman urged secondary school students who are being sponsored by Imarika Foundation to exercise a high degree of discipline both at school and home. He further emphasized that discipline is the only key factor towards success in their final national examinations. He warned the students against excessive drinking of alcohol and drug abuse, arguing that the vice contributed
to dismal performance in national examinations. He asked the students who had attended the sacco mentorship event conducted by Imarika Foundation to study extra harder in order to pass their national examinations, adding that there is no short cut to passing examinations except working hard. On career choices, the chairman urged the students to select courses which are marketable in the country and in the developing World. “Choosing Career Goals should be taken seriously since it impacts on one’s
Ms. Josephine, a counseller from Destiny Rebuilders International.
cont next page....
Mr Jackson Gevera, Imarika Sacco Marketing manager.
Imarika Foundation MD, Mr Peter Angore addressing students who received their cheques for the third term during the Mentorship event.
Dr. Flaura Kidere, Go Make Impact Foundation, Pwani University.
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JUNE, 2021
Mr William Makatiani, Serianu Limited managing director awarding certificates of participation to students during the meeting.
Ms. Josephine, a counseller from Destiny Rebuilders International addressing participants during the students mentorship event.
...From previous page life,” Mr Ndoro advised. Imarika Foundation was started in 2018 by Imarika Sacco to serve the Welfare of the local communities in the county. The Foundation gets funding from Imarika Sacco to carry out its operations. So far the foundation has conducted two mentorships for students. The first students mentorship was held in 2019, while the second one was held on 5/5/2021. “The students should be mentored once in a while so that they may know the right things to do and follow,” noted Mr Angore. Mr Angore urged the students who are being sponsored by Imarika Foundation to study hard in order to get at least Grade C+ and above in the final Form Four examinations. This, he said would encourage the Foundation to seek more funding for scholarships for them. The Foundation has just received Sh7 million from the Sacco to carry out its programs in conjunction with Serianu Ltd, an ICT firm that empowers High School students in choosing career skills and has already disbursed scholarships amounting to Sh270,496 for the 28 students being third term fees. All 76 secondary school students who attended the event in Kilifi town were awarded with certificates of Participation. During the event Counsellor, Ms.
Josephine Wathika from The Des- to decide on their career early tiny Rebuilders International, a cer- enough to enable them to know tified Life Coach with Rajchnology where to go for. He emphasized background and a Trainer asked the importance of building career students to focus on good relation- goals early so that students may ship to enable them to study effec- know the right path. tively. The Managing director further Dr. Flaura Kidere of Go Make asked students to develop personal COUNTY PRESS Impact Foundation, AUGUST, 2020 Pwani University urged secondary school students to choose accordingly careers to pursue after completing their form four course. She further asked students and parents to co-operate fully when it come s to career choice. “Career choice needs personal decision so that one Together, we grow can direct focus on the course taken though you must also consider courses which are relevant to the current job market. Choosing the right Career is very important for it will enable one get relevant courses,” Dr. Kidere advised. Serianu Limited Managing director, William Makatiani urged the students
academic plan as well as research well about the job market to enable them to go for the right course. Mr Makatiani also asked students to explore career options and develop their Career Portfolio to enable them to prepare for the courses to take. 5
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16 | SACCO REVIEW
JUNE, 2021
By Sammy Chivanga Outstanding remittances to Saccos from employers have exposed the sector to a myriad of challenges with many of them operating in financial depression. The piling up of outstanding deposits has put the sector in liquidity strains with no redress because the entities involved have gone scot free. Firms drawn from both the public and private sector are continually holding onto money deducted from their workers’ payroll for the purpose of remitting to Saccos. Commissioner for Cooperatives Development Geoffrey Njang’ombe says struggles facing institutions such as universities is part of the challenge but strong sanctions are necessary for deliberate defaulters. “The current law is very strong. However, we are also reviewing it and where we feel it needs strengthening, we will do it. We have a taskforce reviewing it. There can be more sanctions on employers who fail to remit,” says Mr Njang’ombe. Non-remittances menace has been made worse by Covid-19 economic disruptions that have seen firms in sectors such as the hospitality industry, aviation, transport, media and education sacrifice the interests of Saccos to meet their own liquidity needs. And now the operations of many Saccos are being hampered by the growing cases of employers who deduct employees but fail to remit the money. Non-remittances have continued to negatively affect the ability of Saccos to meet their financial obligations to the members, as well as failure to meet prudential compliance requirements. Such delays impact negatively on Saccos by denying them enough money to lend to members. The movement usually depends on members’ contributions to issue loans. Eyes are now shifting to the regulators— Sacco Societies Regu-
Tight laws will curb non-remittance
Commissioner for Co-operatives Geoffrey Njang'ombe reads the winning raffle ticket as Bingwa Sacco CEO Jane Mugo watches during a sacco event. latory Authority (Sasra) and the Commissioner for Cooperatives— to take decisive action and save the cooperative movement from this conundrum. “The law is very strong on this and we have done a lot on recoveries. But the main culprits are universities and it has to do with the struggles they are having. Some even struggle to pay salaries,” said Njang’ombe. He said there was negligence before the Covid-19 outbreak but the poor financial state of learning institutions especially now that they have closed is another factor. Mr Njang’ombe said his office has helped make some recoveries from universities, with Sh5 million coming from Egerton University and Sh200 million from University
of Nairobi. There are governance lapses in places such as Egerton, which the regulator says makes the recovery more complicated. Today, even if you went to court, the struggling firms may get some relief because they even delay salaries. And you can’t attach their accounts because there is no money there,” explained Mr Njang'ombe. Saccos have conventionally operated under the concept of remittances of deductions from employer institutions which have a legal underpinning in Section 35 of the Cooperative Societies Act. Members of Saccos usually issue instructions to their respective employer-institutions to directly make periodic deductions from their salaries or other incomes and
SACCO DIARY The Ins & Outs in the Industry
Daniel Masha exits Imarika Sacco
Yongo is new CEO Imarika Sacco
Imarika, a progressive Sacco that posts good performance gets new Chief Executive Officer (CEO) after the retirement of Daniel Masha who has been at the helm of the Sacco for the last 29 years (since 1992). He is succeeded now by George Yongo Ngala who was previously his deputy.
After being in the cooperative movement for now 19 years, serving in various managerial capacities, George Yongo Ngala finally climbs to the rooftop of Imarika, a progressive Sacco that posts good performance as the Chief Executive Officer. Before being appointed to the top seat, he was the deputy Sacco CEO. He joined Imarika when it had less than 5000 members but now, the membership has grown to over 10,000.
Daniel Masha
to remit the deductions directly to their respective Saccos. The first category of deductions are those meant to build members’ non-withdraw-able deposits—popularly known as the BOSA deposits. These are the deposits which the member may use as collateral to obtain credit facilities from Saccos. The second category of deductions and remittances are those meant to periodically repay any loan or credit facilities –popularly known as the loan repayment deductions. While public universities and tertiary colleges have been among the leading culprits in overstaying with Saccos’ dues, the National government and the Counties has registered a marked reduction in the non-remitted deductions.
Sasra gets a new CEO Peter Njuguna, formerly the manager in charge of the entire Sacco sub-sector's supervision at Sacco Society Regulations Authority (Sasra) assumed the seat of the Chief Executive Officer (CEO) on an acting capacity for about six months awaiting confirmation by the board, to succeed his predecessor John Mwaka. Once confirmed will be the regulator’s fourth CEO.
Mr George Yongo Ngala Peter Njuguna
“I wrote letters to counties, directly to governors, and they responded very well. But some parastatals such as Agricultural Development Corporation, KBC and Posta have found it difficult to pay because of the struggles,” said Mr Njangombe. He explained that Section 35(7) of the Cooperatives Act says if there is money in an entity’s bank account and it has pending remittances, the bank must remit or it is assumed they are the ones holding the money. “The law has served us well because once we attach the accounts the bank has no option but to remit the money. And banks usually respond well,” he told the Sacco Review. The compounded effect of these delayed or defaulted remittances is the perennial failure by some DTSACCOs to meet obligations to members arising from the resultant liquidity constraints. This in turn leads to members’ apathy and loss of confidence, as well as high levels of defaulted loans. “The capacity to give loans also gets impaired by the non-remittances. Andd should a member want to withdraw after retirement, they may not get money on time if the society’s liquidity is low,” said the commissioner. Other challenges include failure to meet and maintain prudential standards especially the liquidity ratio and capital adequacy ratio and liquidity constraints making it impossible to issue new loans. Regulators have been in consultation with stakeholders and policy makers to re-look at the effectiveness of the prevailing legal and operational framework on remittances by employer-institutions. Saccos are now encouraging members to use withdrawable deposits savings accounts (FOSA) held by members of Saccos. This ensures that any deductions due to the financial institution as loan repayments, are directly made by the financial institution as a first charge and only the balance is released to the account holder.
Eco pillar Sacco CEO joins county government Eco pillar Sacco CEO Shadrack Ruto Tomiyan has joined the West Pokot County government's treasury as a senior official, and has been succeeded by Fred Siywat who has been a senior manager at the sacco. He bid farewell to the Sacco board and members during the society’s annual delegates meeting held on 11th at the teachers plaza in February this year.
Shadrack Ruto
Yetu Sacco gets a new CEO Yetu Sacco finally confirms Denis Kirimi as the new Chief Executive Officer (CEO). Kirimi has been the deputy CEO and was acting as the CEO since the passing on of former CEO Patrick Mugambi.
Denis Kirimi
SACCO REVIEW | 17
JUNE, 2021
EASTERN
MARSABIT
Trans-Nation now in Marsabit and Moyale By Sammy Chivanga Trans-Nation (TN) Sacco beat the Covid-19 odds to open new satellite offices in Marsabit and Moyale. The Sacco management said the decision to quickly formulate strategies to navigate the Covid-19 turbulence helped cushion members and also help the Sacco to grow. “The offices are doing very well and we intend to venture in other areas after proper analysis of economic viability through feasibility study,” said Interim board Chairman Edwin Kaburu Thuura. Addressing members during the Annual General Meeting (AGM, Thuura said TN has witnessed a strong growth since inception 28 years. During the review period of 2019- 2020, the Sacco received an additional 5,877 new members, increasing the total membership base to 26,992. The Sacco also reviewed the terms of its six loan products to support members, among them the repayment period for self-guaranteed loan that was raised to 84 months. The Murabaha product cost was halved from seven percent to 3.5 percent to also help members during the
Trans-Nation Sacco Banking Hall.
26,992
TOTAL MEMBERSHIP base of the Sacco after 5.877 new members joined during period 2019 - 2020.
Covid-19 pandemic. “We envisage some difficulties by some of our members after the lifting of Covid-19 tax relief and TN Sacco has therefore formulated a facility to assist such members through an enhanced stabilizer loan,” members were told. The interim chairman announced that all savings deposits via pay bill numbers had been zero-rated starting January to support to members.
KITUI
MERU
Two charged with stealing Woman who led Banana Sh12m from Sacco Sacco dies By John Majau Two young men accused of robbing a Sacco have been released on a cash bail of Sh500, 000 each or a bond of Sh1 million with a similar surety. The two, Paul Mwenda Kubai and Moses Gitene Mwongera, Meru County government staffers denied a multiple counts before a Meru court including stealing Sh12, 223,060 from Transnation Sacco. The court heard that on diverse dates between March 16, 2021 jointly with others not before the court they conspired with intent to defraud by means of raising fictitious credit by transferring and withdrawing money from various accounts held at Transnation Sacco limited to an Account NO 68260403433801 belonging to Gitene Mwongera amounting to Sh12, 223, 060. Appearing before Principal Magistrate Edward Tsimonjero, the two also denied that on the same dates at Transnation Sacco Chogoria Branch in Tharaka Nithi County; jointly with others not before the court they stole Sh12, 223, 060 contrary to section 275 of penal code.
Kubai denied a third count of stealing by servant on the said dates at Chogoria Branch being a Credit Officer jointly with others not before the court stole the Sh12, 223, 060 property of Transnation Sacco. Moses Gitene denied handling stolen property at Transnation Sacco Laare Branch otherwise than in the cause of stealing arranged the retention of Sh12, 223, 060 from Mwenda Kubai. Kubai further denied being a Credit officer willfully and unlawfully with intent to defraud made false entry by transferring the money from various accounts held at Transnation Sacco to his account. The case will be mentioned on June 8th for pre-trial and fixing of hearing date.
12,223,060 AMOUNT STOLEN from TransNation Sacco Acccount belonging To Gitene Mwongera.
By Boniface Mulu The former chairperson of the Kitui Banana Women Savings and Credit Cooperative Society Limited was recently buried at her Kwa Ngindu village home in Kyangwithya. The 83 years old Alice Mumbi Malonza who was a trainer on female gender issues, died at the Jordan Hospital in Kitui Town on Tuesday, April 13, 2021 and was burried on Tuesday, April 20, 2021. Kitui County Governor Charity Kaluki Ngilu was among the leaders who attended the burial ceremony. .After completing her education in 1954, Malonza was employed in the Ministry of Agriculture from 1955 to 1957, before she moved the Ministry of Culture and Social Services as a women’s trainer from 1958 to 1960. She later ventured into business in 1971 and in 1974, was among the founders of the Kitui Banana Women Self-help Group. They converted the group into a Savings and Credit Cooperative Society Sacco in 1978 and she became the society’s third chairperson from 1981 to 1993.
EMBU
Tea factory directors vow to boycott elections By Kamundia Muriithi Eighteen board members serving on tea factory boards in Embu County have threatened to boycott the forthcoming elections for directors of three tea factories. They have vowed to boycott the elections, because of alleged government interference in the exercise. The officials dismissed the elections planned to be held on April 10 as illegal, claiming that that the 28,000 farmers in the zone have been threatened ahead of the polls. “Elections are being pushed by the national government, which has already come up with a schedule for the same,” said Kenya Tea Development Agency Embu Zone Board Member Samuel Mwafrika. He said laid-down regulations have been violated in the critical process and KTDA which is mandated to call elections and not the national government sidelined. “The exercise normally begins with the election of committees at buying centres followed by that of directors but the forthcoming elections will conducted on playgrounds where directors will be elected contrary to regulations,” complained Mwafrika. He said the elected directors will assume offices without buying centers and will not oversee tea matters effectively. Mwafrika asked the government to ensure the right procedure for conducting the elections is
upheld by adhering to the KTDA Company Act 2015. Rukuriri Tea Factory Director, Joshua Kanake wondered why elections are being forcibly enforced when there is a pending court case concerning the same. He said the court suspended the executive order three on the revitalization of the tea sub-sector until the matter is heard on April 20, this year. Kanke added that as elected leaders who are legitimately in office, they are mandated to guide farmers on what is beneficial to them and what to ignore. Another Director Eston Mugo also wondered how the government can call for elections without involving KTDA. The duo urged farmers to boycott the elections until they are legally convened, which would include an announcement from the KTDA Secretary. Mwafrika said the directors are not against Agriculture CS Peter Munya’s tea regulations, but argued that some of the new laws will affect the tea sector negatively. He observed that the three tea factories he represents- Rukuriri, Kathangariri and Mungania- had entered into a contract with a tea buying company to purchase green leaf directly from the factories. “The regulation prohibiting direct sale of tea will force such factories to breach the contract and be liable to prosecution,” he said.
MACHAKOS
Traders appeal for modern market By Domnic Maraga Traders at Joska market in Mavoko have urged the Machakos county government to build for them a modern market. Local traders mostly operate small food stalls at the market while those who travel from other areas like Nairobi, Kajiado and Kitui sell farm produce. They say the current situation at Joska market is so bad especially when it making it difficult for them to conduct business. “We have incurred losses because of disagreement with the county government on where to operate on market days,” said Sarrah Karime, a stall owner. It sits along the highway and brings together traders from the four counties surrounding Machakos County on market days. “They should give us some space to build a modern market because we are selling by the
road side with very limited space and poor drainage system,” said Karime. The traders are also uncomfortable doing our businesses along the road where it is hard to observe the Ministry of Health Covid-19 guidelines. Raods to major markets likeTala, Ndovoine, Joska and Mikamboni in the rural areas are also bad and muddy. “Traveling from Gatundu to Joska and other major markets in Machakos is hectic because vehicles consume a lot of fuel and at time,” said pineapple seller John Kioko. We have incurred losses because of disagreement with the county government on where to operate on market days. -Sarrah Karime, a stall owner.
18 | SACCO REVIEW
JUNE, 2021
ADVERTISING FEATURE
Wakenya Pamoja Sacco registers improved growth amid Covid- 19 pandemic judgment to transfer Sacco surplus to reserves when necessary to improve the Institution’s capital to total asset ratio” noted Nyakundi.
By Staff Reporter Prudent leadership saw Wakenya Pamoja Sacco (WPS) navigate negative impacts of the Covid-19 pandemic to register impressive growth in year 2020. The Kisii County headquartered Sacco, which is rated among the best performing rural Saccos by the Sacco Societies Regulatory Authority (SASRA), had improved performance in all spheres. The SASRA 2019 Annual Supervisory report, rated WPS sixth among top 15 DT-Saccos peer-grouped by total deposits below Kshs 1 Billion, with a 2.63% growth that year as compared to year 2018. Commissioner of Co-operatives Mr. Geoffrey Njang’ombe has also great praise for WPS, noting it was one of the most stable and well managed rural agricultural based Saccos nationally. “We want other rural Saccos in the Western-Kenya region to emulate the clear and focused leadership demonstrated by WPS,” the Commissioner told the Sacco-Review. And Teaming with Confidence, WPS Board Chairman Mr. Hezekiah Nyasamba told this year’s Annual Delegates Meeting (ADM) that given the growth strategies put place by the management, the WPS’s future remains bright. The Sacco registered growth in its shares by 4.5% in year 2020 as compared to year 2019 while the savings on the other hand increased by 20 % in year 2020 as compared to year 2019. During the financial year in review, active membership increased by 4.4 %. Adjusting to the new normal as a result of Covid-19 pandemic, the WPS management considered reducing lending rates to effectively compete with other stakeholders in the market, appealing to members to take advantage of the reduced loans interest rate and apply for more loans. “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. All members should have performing loans and active accounts especially the delegates for them to be eligible for re-election,”
‘
WPS has remained on track, enhancing the socio-economic welfare of its members through provision of affordable, accessible and sustainable financial services –as stipulated in its vision and mission statement. - CEO
WPS Chairman Hezekiah Nyasamba and CEO, Isaac Omwenga during the 2021 Annual Delegates Meeting (ADM). noted Nyasamba. The Chairman reported that the Sacco also conducted successful elections for Bobasi, East Kitutu and West Kitutu on April 7,
WPS has also proposed a number of strategies for implementation in order to sustain SASRA’s rations,
WPS AT A GLANCE
Wakenya Pamoja Sacco Society Limited (WPS) was started in 1976. It became autonomous in 1992 under the name Gusii Farmers Rural Sacco Society.
implement other digital platforms like POS - (POINT OF SALE- Agency banking), and Mobile loans banking,” added Nyasamba. He said to Covid-19 pan-
WPS is run by a delegates system. The annual delegates meeting being supreme. It has a total of 16 branches spread across South Nyanza region
It is headquartered in Kisii town, Kisii county
The Board Chairman is Mr. Hezekiah Nyasamba
The Sacco was Licensed by SASRA in 2011 to conduct deposit-taking Sacco business
The CEO is Mr. Isaac Omwenga
2021 and also had two replacements from South Mugirango, Bomachoge and Nyaribari electoral regions. “I congratulate all the Delegates and Chief Delegates for their election. I call upon all the delegates who were elected to continue supporting us in all activities geared towards the growth of the Sacco,” said Nyasamba.
Customers being served at the FOSA anking hall.
mainly the Institutional capital to total assets ratio, Financial investments to total deposits ratio, Non-performing loans to total loans ratio and NonEarning assets to total assets ratio. “We have proposed for increase in profitability and retention of more reserves to improve the institutional capital. The Sacco will increase its investment in loan portfolios and put measures to increase its total savings and other deposits, encourage clients to repay their loans as per the loan terms,” added Nyasamba. Further, he said WPS will enhance proper loans monitoring and strengthen recovery efforts, limit of capital expenditures. Nyasamba said WPS was committed to ICT and implementation of Digital platforms for effective service delivery. “With the new MIS system in place, we have implemented mobile phone withdrawal system and bulk SMS which are working well despite low members’ registration. The management is also preparing to
demic, the Sacco is encouraging virtual meetings to avoid further spread of the disease during service delivery. WPS Supervisory Committee Chairman Joseph Nyakundi, commended the Finance Department for controlling the expenditures. “Delegates need to take prudent
WPS Chief Executive Officer (CEO) Mr. Isaac Omwenga said that the society is ready to counter the tough economic times brought about by the pandemic, starting with the technological advancement aligned in its strategic plan. Omwenga said “ WPS has remained on track, enhancing the socioeconomic welfare of its members through provision of affordable, accessible and sustainable financial services –as stipulated in its vision and mission statement.” The CEO noted WPS has provided best financial services to its members giving them an opportunity to tap their potentials. The ADM was graced by Kisii County Director for Cooperative Development Pamella Kemunto as the Chief Guest who urged parents to support their children to embrace the culture of borrowing loans, investments and saving with Saccos to boost their incomes and strengthen the societies. “Parents can also secure loans from Saccos such as WPS and help their children to invest in viable projects to generate profits, repay the loans and qualify for more loans,” the chief guest challenged.
Wakenya Pamoja staff in a Corporate Social Responsibility visit at Keumbu Holiness Orphan Centre.
JUNE, 2021
SACCO REVIEW | 19
CO-OPERATIVES CONTACTS CHULUNI TRADERS SACCOS P.O. BOX 4 CHULUNI
CHOMO PIG BREEDERS CS LTD. P.O. BOX 84 THIKA
CHUMA CO-OP SAV AND CR LTD. P.O. BOX 90222 MOMBASA
CHONDESTA CO-OP SAV & CR SOC. P.O. BOX 18131 NAIROBI
CHUMA SACCO P.O. BOX 142 ELDORET
CHORONG’I FARMERS CO-OP. S. P.O. BOX 818 NYERI
CHUNA HOUSING CO-OP SOCIETY LTD UNIVERSITY OF NAIROBI UNIVERSITY WAY
21 | saccoFCS review CHORORGET LTD P.O. BOX 902 ELDORET
P.O BOX10106-00100,GPO NAIROBI TEL: 020-2221990,0700346545,0723-045603,02026116210 CHUNGUCHUNGU CS & CS LTD P.O. BOX 267 WATAMU CHUONI SAV. & CR. CS LTD. P.O. BOX 10 KERICHO CHUPA CS & CS LTD
P.O. BOX 45788 NAIROBI
P.O. BOX 99 CHWELE
CHURCH OF GOD CS & CS LTD P.O. BOX 160 MASENO
CHYULU SACCO SOC LTD P.O. BOX 315 MTITO ANDEI
CHURCHES SAV. & CR. CS LTD. P.O. BOX 90 KALOLENI CHURE DAIRY FCS P.O. BOX 54 NKUBU CHWELE FARMERS CS LTD
CIANGOI/CABUGI DAIRY FCS LTD. P.O. BOX 10 CHUKA CIEKO WOMEN TRANSPORTERS CS LT P.O. BOX 1226 NYERI DEcEMBER 2014 CIL SACCO
CHRIMAHO CS & CS LTD P.O. BOX 335 KISII CHRIS HARRIS CS & CS LTD P.O. BOX 44991 NAIROBI CHRISTIAN BOOK CENTRE STAFF CS P.O. BOX 545 ELDORET
Wakenya Pamoja Sacco Society Limited
CHRISTIAN COMM SERVICE WEST. REG. P.O. BOX 2830 KAKAMEGA CHRISTIAN CONSUMERS CS LTD P.O. BOX 12 ELDORET
CHRISTIAN ENTERPRENEURS SACCO TEL: 066-22899 P.O. BOX 61 KIAMBU CHUI CHAI CO-OP SAV & CR SOC L P.O. BOX 84078 MOMBASA CHUI CO-OP SAV & CR LTD. P.O. BOX 4343 NAIROBI
CHUIYAT MULT.PURP.CO P.O. BOX 258 LESSOS
Our Vision: To be the Finacial Service Provider of choice.
CHUJUKA SACCO P.O. BOX 651 CHUKA CHUKA F C S LTD P.O. BOX 43 CHUKA CHUKA HOUSING CS & P.O. BOX 43 CHUKA CHUKA JUA KALI P.O. BOX 70 CHUKA CHUKA SACCO LTD P.O. BOX 49393 NAIROBI
160
Our Mission: To enhance Socio-economic welfare of our members through provision of Affordable, accessible and sustainable Financial services. MOTTO: You, Our Concern. The Kenya Co-operatives Directory 2013
Our Core Values: Customer Focus, Integrity, Teamwork, Innovativeness and Professionalism
LOAN PRODUCTS
SAVINGS PRODUCTS
CROP BASED/AGRICULTURAL LOANS
ORDINARY (SACCO) ACCOUNT
Targets cooperative societies, TSC staff, farmers with shareholding, civil servants, pensioners, business people etc.
Targets farmers of all kinds including coffee and tea.
OKOA ADVANCE
CORPORATE ACCOUNT
Targets coffee and tea farmers.
Targets schools, churches, hospitals, firms, other institutions and organisations
COFFEE SOCIETY ADVANCE Target societies whose members are paid through the Sacco.
WAKENYA AKIBA ACCOUNT
Targets customers who wish to fix their deposits for a specific term.
INSTITUTIONAL LOANS
An overdraft advanced to individuals and institutions e.g school and factories.
MWANANGU ACCOUNT
WAKENYA FOSA LOANS / ADVANCES Targets institutional employees and pensioners. BUSINESS LOANS
Targets junior savers below 18 years by parents/ guardians.
GROUP ACCOUNT
Targets registered groups in rural and urban areas.
Targets small, medium and large enterprises /business people
BIASHARA ACCOUNT
Targets small and medium enterprises and individuals with legal businesses.
GROUP BASED LOANS
WAKENYA FOSA SAVINGS
Targets employees of various institutions and firms.
OKOA ACCOUNT
Targets small farmers with little income.
Wakenya Pamoja member harvesting her coffee.
E-BANKING SERVICES
Value chain– Targets dairy farmers Jiinue Rafiki-targets small medium enterprises in urban areas Micro-finance-targets small medium enterprises in rural areas
M-PESA ATM-Visa cards Lipa na Mpesa – Business Number 115380 POS (point of sale) Mobile Banking HEAD
BRANCHES: Kisii, Nyamaiya, Ogembo, Nyamarambe, Nyamache, Keroka, Marani, Kebirigo, Magombo, Oyugis, Tabaka. Suneka, Kenyenya, Ikonge, Magwagwa
OFFICE
• • •
Wakenya Pamoja Msacco Services Deposits Balance Enquiry Mini statement
• •
Withdrawals Other Utilities
Kahawa House Opposite Gudka Westend, along Kisii-Sotik Road Overlooking Daraja Moja P.O.Box 829-40200, Kisii, Mobile: 0746 668 190 E-mail; wpsacco@wakenyapamojasacco.com Website: wakenyapamojasacco.com
20 | SACCO REVIEW
ADVERTISING FEATURE
JUNE, 2021
Resilient Nawiri Sacco leads in Rebates issuance in 2020 have a strong financial closer to the people, Nawiri Sac- tion. base for the future. Plan co has also set eyes on a branch Some of the challengfor your retirement," he expansion strategy that the ADM es were delayed instaltold the members. members approved. ment due to loan restrucHe also noted that Thus coming up in a month turing, which led to the the agricultural sector is the Embu Down Town Branch tying up of funds, which was not critically af- that will be situated at Makuti would have been used for fected by the pandem- Building (Kipewa House). In this lending. The Sacco, howic, while payments for prime location, its members such ever, is upbeat that with coffee, tea and dairy as market traders, jua kali artisans the gradual reopening of farmers –the bulk of and others can conveniently ac- the economy, it would extheir members –im- cess banking services. perience further growth in proved steadily. This will be the first Sacco to the loan book. Mr. Njue made the have two branches in Embu town. The institution is also remarks while reading Next will be the Karurumo banking on better perforthe chairman's report Branch in Kyeni South, which mance in the agriculture during the Saccos An- will serve clientele from the larg- sector due to adequate nual Delegates Meet- er Ugweri, Karurumo and Ishiara rains and the reforms such ing (ADM) on Febru- areas. The branch will open its as those in the tea indusary 18, 2021. doors to the public later in the try. He added that the year. The CEO reiterated Sacco's impressive According to the chairman, the Sacco’s uptake of adperformance was also Mr. Njue, whereas increased vanced technological sysMr pegged on the loan technology has made it easier to tems in offering products Mr James Njue Njiru, book's growth of 18 do business anywhere, the physi- and services to attract new Chairman. percent from Sh1.3 cal branches will continue being and potential customers. billion to Sh1.6 billion relevant in banking, especially in He said in 2020, they with the loan incomes representation, consultation, and were able to build their By Kamundia Muriithi growing by 17 percent. relationship management. own Wide Area Network, which "The loan book growth was During the year under review, is cost-effective and very reliable. housands of Nawiri He announced that they had Sacco members backed on strong personalized the Sacco also smarted from the have a reason to marketing programmes and rela- disruptions caused by the Cov- also provided Pesa link services id-19 pandemic, which according to members, a technology widely smile after the tionship banking," he noted. Intent on bringing services to Njiru, presented unexpected perceived as a preserve of mainEmbu County-based co-operative challenges in credit administra- stream commercial banks. issued lucrative dividends for the year ended December 31, 2020. The Tier 2 Sacco, with an asset base of 2.37 billion, remained resilient and focused on its core businesses for the year under review to post a profit after tax of Sh118.9 million, up from Sh103 million the previous year. This translated to a 15 percent growth, a no mean achievement considering the tough operating environment in 2020 when Covid-19 wreaked havoc on Kenya's economy. Nawiri Sacco thus issued interest on Non-withdrawable Deposits and dividends on institutional shares at the mouth-watering rate of 15 percent. The sterling performance has put the fast-growing Nawiri Sacco on national focus, with credible co-operative sector publications ranking it top for the highest Council of Governors (CoG) Chairman, and Embu County Governor Martin Wambora graces return on Unwithdrawable Dean occasion as Chief Guest at Nawiri Sacco. posits in the country. Nawiri Sacco–a rural-based society –hogged the position alongside IG Sacco, which also issued at the rate of 15 percent. For the shares, Nawiri Sacco competed favourably to be ranked at position 13 countrywide, only beaten by giant Urban Saccos. The Sacco chairman, Mr James Njue attributed the impressive performance to the unwavering loyalty of the members whose Non-withdrawable reached 613.1 million from 488.7 million the previous year, representing a 25 percent growth. "This was due to the confidence of our members. I encourage you to continue increasing your unwithdrawable deposits to Board Chairman (stepping on the ball) and CEO with a team in a previous Nawiri tournament.
T
Joseph Njeru Mugoh, CEO. "The service is now enabling our members to transfer money from one bank account to another in real time. It is available through our mobile banking channel- spot cash. Members can now transfer money from their accounts with other financial institutions to Nawiri Sacco and from their FOSA accounts to other financial institutions with ease," stated the CEO. The Sacco also rebranded and adopted new corporate colours symbolic of improved and faster services besides readiness to meet customer needs. The CEO said that in 2020 the Sacco embraced red, blue, and white corporate colours meant to make it more visible and distinguish it from the rest in the market. He said they rebranded after evaluating the members' expectations and the changing market environment and thus embarked on massive changes in their key business operations and working systems to ensure members enjoy friendlier, faster and more convenient services. "The rebranding wasn't only on colours but also sought to improve the Sacco's overall operating systems. We aim to improve the efficiency, effectiveness and customer convenience in service delivery by bringing services closer to its members. Mr. Mugoh adds that they have improved the mobile banking system so that it is now more stable and offers virtually all banking services such as eloans, accessing bank accounts, withdrawing, paying utility bills, among others. Nawiri Sacco started in 1972 as a banking section of the Embu Coffee Farmers Co-operative Union before changing to Embu Farmers Sacco in 1992 and finally rebranding to Nawiri Sacco in 2011.
JUNE, 2021
SACCO REVIEW | 21
NAWIRI SACCO SOCIETY LTD P.O .BOX 400 - 60 100 EMBU
Tel: 0101197057, 0110097057 Head Office: Tel: (068) 2230586 Fax: 30814 Website: www.nawiri.co.ke Email: info@nawiri.co.ke
KTDA PRODUCTS
COFFEE PRODUCTS
SALARY/ PENSION PRODUCTS
1. KTDA Advance 2. KTDA Bonus Advance 3. KTDA Fosa Loan 4. KTDA Loan
1. Coffee Advance 2. Coffee Loan
1. Advances 2. Normal Salary Loans 3. Fosa Salary Loan 4. Salary Emergency Loan 5.Development loan
BUSINESS PRODUCTS
SAVINGS PRODUCTS
1. Micro Finance Loan 2.Bebabeba Loan 3. Vijana Loan 4. Business Advance 5. Biashara Plus Loan 6. Corporate Loan 7. Development Loan 8. Jiinue Loan 9. Asset Finance 10. Cheque Clearing Facility
1. Nawiri savings account 2. Business Account 3. Faida Account 4.Msingi Junior Account 5. Jipange Account 6.Group Savings Account 7.Rent account 8.Holiday Account
New Loan Products
BANKING SUPPORT SERVICES 1. Pesalink Services. 2. Mobile Banking 3. M-Pesa Services 4. ATM Sevices 5. Safe Custody. 6. Personal Cheque Book 7. Insurance Services 8. Sacco Agency Services
Dairy Products 1. Dairy advance 2.Dairy loan 3. Dairy Corporate loan
1.Simu Loan 2.Float Advance 3.Kandarasi Loan 4.Bima Loan
DIAL *645#
vv
Agricultural Products
Insurance services
BRANCHES
The Sacco operates its own insurance agency "Nawisco Insurance Agency" fully licensed and regulated by the Insurance Regulatory Authority to take care of the interest of its members. The Agency offers all kinds of insurance covers like Motor Insurance, health, Personal accident, Business, livestock, ETC.
Embu, Runyenjes, Kairuri, Kianjokoma, Kathangariri, Kiritiri, Mbuvori, Kanja, Siakago
1. Horticultural loans
Coming Soon Embu Down Town and Karurumo Branches
COAST
Bid to revive Mangrove Sacco Members of Mangrove Cutting Sacco in Lamu County have been urged to cooperate fully and revive their dormant Sacco in and uplift their living standards. Lamu County Cooperative auditor, Nickson Baya told Sacco Review said members should revive the Sacco and also to ensure that they sustain it. He said the society used to generate income from the sale of mangrove poles in the region.
He asked county residents to cooperate and join Saccos in large numbers and invest heavily. Baya also noted the move will enable them get bigger loans to accomplish their personal development projects, because their monthly and daily wages cannot sustain their projects. He told residents that it is only through joining Saccos that they can be stable and prosperous. - By Tsozungu Kombe
Saccos hit by pandemic Women and Youth Saccos in Taita Taveta County have been heavily affected by the Covid 19 pandemic. Speaking to Sacco Review in Wundanyi recently, Taita Taveta County Co-operative Commissioner Erastus Gonzi said the performance of women and youth Saccos was still very poor. He revealed that the business is still facing a big challenge as a result of the Covid 19 pandemic. He however disclosed that
members are currently striving hard to ensure that their business is sustained. Mr. Gonzi stated that the other Saccos in the employment sector are progressing very well despite the effects of the pandemic. He urged residents in the county to join Saccos near them in large numbers and save heavily to enable them get bigger loans to accomplish their personal development projects. - By Staff Reporter
County to boost dormant Sacco Lamu county government has set aside Kshs. 150,000 to revive dormant Savings and credit cooperative societies (Saccos) According to Lamu county government cooperative Auditor, Mr. Nickson Baya, the revival of the dormant Saccos in the county will enable more residents to join and save heavily for bigger loans to accomplish their personal development projects. -By Our Reporter
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JUNE, 2021
ADVERTISING FEATURE
Ardhi Sacco maintains an upward growth trajectory amid Covid-19 challenges
Mr Tom N'khataro, National Chairman.
Societies Regulatory Authority (SASRA) nationally. For example the SASRA Supervisory Report for year 2019 puts Ardhi Sacco’s total assets at Sh 1.89 Billion, total deposits at Sh 1.51 Billion, Cross Loans at Sh 1.62 Billion while its total income at 0.23 Billion. The Sacco’s year 2020 performance shows share capital grew by 9.5%, deposits increased by 5.2% while the loan portfolio grew by 3.4%. The Sacco National Chairman Mr. Tom O. M. N’Khataro, notes the society was stable but members should increase their savings to compete fairly with their contemporaries. Still on the Sacco’s growth track, the society membership increased significantly, with the Chairman pointing out the Sacco’s target was to grow members by at least 1,500 annually. And in an effort to achieve such a target, the Sacco currently rewards its members with Ksh1,000 for ev-
ARDHI SACCO AT A GLANCE The Society was registered on 5th October 1971 The Sacco has members from all the government ministries and private sector, The Sacco’s Vision is “To be the leading Sacco in serving members timely and efficiently”
Mr John Laku, Supervisory Chairman.
By Our Reporter
A
rdhi Sacco is firmly on an upward trajectory going by the latest financial performance figures for year 2020. Focused management saw the Nairobi based Sacco register growth on all fronts, from share capital, members deposits, loan porto-folio and even new members joining the Sacco. The impressive growth and carefully outlined future plans puts the Sacco among the top, most successful DT Saccos under the Sacco
The Sacco’s Mission is “To provide exceptional services to attract and retain savings and offer credit for the improvement of the economic lives of members”.
Mr John B. M. Muthamia, CEO. ery 3 members one recruits. N’Khataro points out that Ministries and Counties are still recruiting new staff who can become potential members “Our ‘Karibu Loan’ is available to the new members @Ksh.50, 000 without the member having saved enough deposits as long as the loan is fully guaranteed.” explains the chairman..
Moving on For the Sacco to remain relevant and competitive, N’Khataro notes it plans to enhance prudent business strategies that include strengthening service delivery by sticking to the service charter, to the core objectives, and by introducing new and desirable products. “We are going to review and evaluate the current strategic and business plans to ensure their success, review the current ICT systems
so as to cope with the environmental changes, enhance discipline in all arms of the Society, review the society operation system in line with devolution and review the current membership structure with a view of engaging in massive recruitment drive,” N’Khataro further noted. As a result of the good performance, the Sacco’s rebates grew by 8.3% while dividends increased by 30.4%. The Sacco’s Fosa which is one of the major income-generating activity, also posted good improvement in terms of revenue. Through Mobile banking , Ardhi Sacco Members can access their FOSA accounts and their statements through Pesa Pepe. The Sacco also has Sacco Link Card to enable members access their FOSA accounts through the card even when the amount is above the Pesa Pepe limit.
The Sacco’s Core Values are Aboveboard, Responsiveness, Dedication, Honesty and Integrity Slogan – Ardhi Kwa Ustawi Motto -Save Regularly, Borrow Wisely, Repay promptly, and spend thriftily The Sacco is headquarterted in Nairobi The Ardhi Housing Co-operative is its investment subsidiary
Ardhi Sacco team at their stand during the 2019 Ushirika Day.
SACCO REVIEW | 23
JUNE, 2021
RIFT VALLEY
ARDHI SACCO SOCIETY LTD
The Society was registered on 5th October 1971 now is 49 years old, (Registration No.2001) by the Commissioner for CoǦoperative Development. The common is all the government ministries and parastatals, private sector, groups and individuals who qualify as per the society byǦlaws.
Our vision being “A Vibrant Sacco Delivering Integrated-World Class Financial Solutions to Our Customers in Kenya”, since inception, Ardhi Sacco has reported an upward growth in its membership and financial performance in regards to its savings and credit products as we offer affordable loans and world class financial solutions to the satisfaction of our members. WELCOMED TO ARDHI SACCO SOCIETY LTD
SOME OF THE ACTIVITIES INCLUDE:-
Members savings.- Withdrawable and nonǦ withdrawable deposits Credit facility- Loans include:Ǧ Development, school fees, emergency, JazaJaza (topǦ up) and Karibu. Front Office Services
Holiday Account Savings/Credits products Retirement Account Savings Account, Holiday Account, Biashara
429
9x xx xx
xx xx
xx 3
Account, Retirement Account, Fixed Deposit Account, Junior Account, Instant Advance, Salary Advance and Discounting Credit.
ARDHI OFFICE CONTACTS SURVEY OF KENYA– THIKA ROAD P. O. Box 28782-00200, Nairobi Phone: 0730725000/0722209851/0780337725 E-mail: info@ardhisacco.com, Website:www.ardhisacco.com
BOMET
Adhere to savings audit ratios, Saccos urged
By Benedict Ng'etich Saving and Credit Societies in Bomet County have been urged to adhere to the recommended key audit ratios if they want to succeed. Bomet County Government auditor K. Kemboi asked local societies to be compliant on recommended key audit ratios of member’s savings. "Some key audit ratios like the retained reserves are geared to safeguarding the interest of members when the Sacco encounters financial challenges like in the case of retrenchment or need for emergency funding,” he said. Flanked by the Sub County Co-operative Officer Wesley Cheruiyot, they called for adherence of the set credit policies, which saves Saccos from serial defaulters. The officials were speaking to Sotico Sacco officials during this year’s Annual Delegates Conference (ADM) held in Arroket Estate in Sotik. Cheruiyot lauded the society for practicing prudent fiscal management and urged them to adapt to emerging innovative ways of transacting business, including mobile banking which has already been established. Sotico Sacco member’s deposits increased by 16 per cent
from Sh133,248,671 in 2019 to Sh151,491,288 in 2020. Sacco chairman Samuel Munyao Nzeki said the trend was encouraging and encouraged members to continue saving for the future and revealed that members from Sotik Tea Company continued to have the highest deposits. He disclosed that during the year 2020, the society issued a total of Sh186,634,570
Mr Munyao urged members to save unwithdrawable deposits which is a key multiplier for loans and urged delegates to be keen on member’s repayment history. in terms of loans compared to Sh141,454,242 issued in the previous year, representing an increase of 32%. “We continue to charge interest on loans at 12 % per year for development and emergency loans. We also charge 8 % on FOSA advances, “he added. The chairman said the society faced challenges of mem-
ber’s defaulting on loan repayment but they tried to assist members with huge unbearable loans by amalgamating them. He cautioned that the process however seems to be a short term remedy because members find themselves in default again after a short while due to additional loans. Another challenge was the situation where some members left employment just when they had taken loans when their terminal benefits were not sufficient to cover their balances especially the seasonal employees. Mr. Munyao urged members to save unwithdrawable deposits which is a key multiplier for loans and urged delegates to be keen on member’s repayment history. He also called for strict adherence to credit policy to avoid high dependency on loans as the only source of finance and also cautioned members to be wary of the proliferation of shylocks who preying on them. “An interest of Sh500 for every Sh1,000 over a period of 1 or 2 weeks is a burden that no one should place on another person,” said Munyao. The Chief Executive Officer Everline Moraa Nyokwoyo thanked the board, delegates and members for being supportive of the operations of the society.
TRANS NZOIA
Water vendors prosper through Sacco him to acquire an old bicycle for water transportation. In March 2007, he started the work as a water vendor selling a 20 litres Jerican for Sh15 and later revised the charges upwards to Sh20 in 2009. With an average collection of Sh5000 daily, food could then be put on the table for the family. With good income generation from the business, Omwamba married his sweet heart in 2010, with whom they have two children. From the money he makes selling atleast 30 twenty litre Jericans daily, he has bought two plots, one grade cow and he is he also proudly educating his children, two brothers and a sister. Together with his water vending colErickson Omwamba, a water vendor. leagues, they registered Maji Matamu Sacco Limited where they contribute Sh200 daily for their welfare. By Martin Ruto The Sacco is thriving and has about thirty Life was bleak for Erickson Omwamba active members who borrow money for develwhen he discontinued his pursuit for secondary opment and other financial needs. And Omwamba took full advantage of the school education due to lack of fees. His parents left Nyanchwa area, Kisii Sacco to borrow Sh500,000, which enabled County in in 1989 in search for greener pas- him to buy the the two plots he is owns. He borrowed another loan of Sh600,000 tures and settled in Saboti, Trans-Nzoia County where Erickson completed his class eight edu- which he used to buy half an acre piece of land on which he plants food crops for the family. cation. He also bought one grade cow that pro“I studied at Nyanchwa Primary School from class one up to class 7 and sat my Kenya vides the family with milk. Omwamba has also bought a new bicycle Certificate of Primary Education exams after which enables him to supply water to his cuswe moved to Saboti,” said Omwamba. Due to lack of fees because of poverty in tomers in Kapenguria town and others at conthe family, he did not continue with the second- struction sites. “I urge the youth to find something meanary education and instead decided to look for ingful that they can do instead of saying that work to assist himself and his parents. The idea of fetching clean water and selling there are no jobs because this work has brought me from far”, he said. to people crossed his mind like a flash of light. He quickly engaged his uncle who assisted
SOTIK
Loan defaults big issue for Sotico
By Benedict Ng’etich
The chairman Sotico Sacco Samuel Munyao Nzeki says they faced challenges because of member’s defaulting on loan repayment. He told delegates that they tried to assist members having huge unbearable loans by amalgamating them but the process was only a short term remedy. “That is because members found themselves in default again after a short while due to additional loans,” said Munyao. Another challenge was the situation where some members left employment just when they had taken loans and their terminal benefits were insufficient to cover their balances especially the seasonal employees. Munyao asked members invest more savings on their unwithdrawable deposits which is a key multiplier for the amount to be loaned. He urged delegates to be keen on member’s repayment history when issuing loan
forms to avoid defaulting. He also asked them to avoid the high dependency on loans as the only source of finance and also cautioned them to be wary of the proliferation of shylocks. “Let us advice and continue training our members to avoid such traps of people taking Sh500 interest for every Sh1000 they repay over a period of 1 or 2 weeks which is a burden that no one should shoulder. The Chief Executive Officer Everline Moraa Nyokwoyo thanked the board, delegates and members for being supportive of the operations of the society. She said they were doing everything possible to satisfy the needs of the members despite the current challenging economic situation. The Sotik Sub County Co operative Officer Wesley Cheruiyot, lauded the society for practicing prudent fiscal management and urged them to adapt innovative ways of transacting business.
FOCUS ON CHAI SACCO ADM
24 | SACCO REVIEW
JUNE, 2021
Chai Sacco posts 10 per cent growth amid pandemic By Malachi Motano As the coronavirus pandemic continues to spread across the world, Chai Sacco has continued to see significant growth trajectory. According to the Sacco Chairman Boniface Ayub, during that tough financial year (2020), the Sacco grew its asset base by 10 per cent from Sh3.7 billion to Sh4 billion, as revenues grew 3 per cent from Sh546 million to Sh562 million. Members share capital grew by 16 per cent from Sh420 million to Sh488 million and member deposits rising by Sh200 million to Sh2.8 billion. The Sacco’s Loans to members (loan book) grew by 6.7 per cent Its interest remained constant. However the chairman assured members it is because of return on their deposits that made deposits to grow. The
Mr Lerionka Tiampati, Managing Director KTDA and Patron Chai Sacco. loans to members also increased by 6.7 percent to Sh3.3 billion up from the Sh3 billion recorded in 2019. “In summary, our Sacco recorded a 10 per growth in 2020 which as the board attributed to operational efficiency during those economic times that were very tough for the financial institutions due to the Covid-19 pandemic. As a result of starling performanced, the society announced a 12 per cent dividend pay-out on share capital and rebates of 8 per cent on member deposits. The chairman noted that activity had gone down in March to April during the peak of coronavirus restrictions but is slowly picking up again. He encouraged members to continue patronising Chai Sacco products to improve growth and financial performance of the society
Chai Sacco Board Chairman Boniface Ayub presenting his report at the ADM. He said the Sacco abled board of directors and the management staff led by him as the chairman and CPA Mwambingu Festus Mwatee as the Chief executive officer (CEO) have and will always continue to come up with new products and services that suit the needs of members. He was speaking during the 2021 Annual Delegates Meeting (ADM) which was graced by Principal Secretary State Department of Cooperatives Noor Ali. The PS commended the Sacco for fast turnaround after Covi-19 shock. “While the Society’s performance tumbled two months from March when the first Covid-19 case was reported in Kenya, it is much encouraging that the Society put in place strategies which led to a quick turnaround and ensured an upward growth trajectory,” said Ayub. With the first quarter of 2021 almost over, the chairman projects a good outlook with rising member deposits, repayment of loans and revision of loan products. He said the board and management have put in place a busi-
Kimani Thungu, Vice Chairman.
ness continuity plan to cushion the society against adverse effects in case of a disaster or unforeseen situations like the Covid-19. This is to safeguard the society’s assets and minimise interruption of service delivery to our
While the Society’s performance tumbled two months from March when the first Covid-19 case was reported in Kenya, it is much encouraging that the Society put in place strategies which led to a quick turnaround and ensured an upward growth trajectory. - Chairman.
James Hinga, Treasurer.
members, said Mr Ayub. The Society’s membership grew by 3.6 percent in 2020 seeing Chai Sacco to 32, 388. Loan products According to the Sacco CEO, Chai Sacco has Loan products that have been designed to meet members’ financial needs whether arising from emergencies or planned financial investments. The designing, packaging and processing of our credit products take into account flexibility and value for money for our members. The Sacco’s Main Loan product is an all-purpose loan product tailored to meet financial needs of members whether for development, project improvement or investment. With the maximum repayment period of 48 months, interest rate of 1 per cent p.m. on reducing balance, one can be borrowed up to 3 times member deposits, has flexible loan security such guarantors and collateral. Its benefits include lower but stable interest rate and longer repayment period of up to 48 months. Chai Sacco also has Super Loan tailored to meet members’ needs for a longer-term loan prod-
Lameck Migiro,, Secretary.
uct to finance their investments/ projects. Its features include maximum repayment period of 72 months, interest rate of 1.2 per cent p.m. reducing balance, maximum loan of up to 3 times member deposits, minimum loan amount is Sh250, 000, flexible loan security such guarantors and collateral with benefits like longer repayment period. The society has Vision Loan tailored to meet the needs for higher credit to finance members’ development projects. Its longer repayment period of up to 84 months and maximum amount based on 4 times the member’s deposits make it suitable to serve the purpose with maximum repayment period of 84 months, interest rate of 1.2 per cent p.m. reducing balance, maximum loan of up to 4 times member deposits, minimum loan amount is Sh300, 000., flexible loan security such guarantors and collateral accepted and Rebates capitalized either to
Mr Festus M. Mwatee, CEO Chai Sacco. deposits, share capital or loan repayment. Other loan products at Chai Sacco include Investment Loan which offers members a facility to finance the purchase of plots and property being sold by Chai Diamond Investment Ltd, Jeki Loan for those who have just joined the Sacco with low deposits and in need of a loan. The society is a Deposit Taking Society licenced by Sacco Societies Regulatory Authority (SASRA). It opened the common bond in 2005 to include members from well-established businesses, corporate institutions and farmers. The society has widened her membership to include business people, investors, and savers beyond the KTDA fraternity and offers Front Office Service Activity (FOSA) services with branches in Nairobi, Litein, Nkubu, Kisii and Mombasa and marketing offices in Kutus, Othaya, Silibwet and Olenguruone.
JUNE, 2021
FOCUS ON CHAI SACCO ADM
CHAI SACCO
BOARD MEMBERS
Grace Miano, Member.
SACCO REVIEW | 25
LOAN PRODUCTS: Chai Sacco offer affordable loan products meeting the needs of its members. Among our loan products range include: Main Loan Vision Loan Emergency Loan Salary Advance School Fee Loan Golden Loan Product Loan Chaifama loan Super Loan investment loan College/University Loan E-loan Jeki Loan
Julius Mugo, Member.
SAVINGS PRODUCTS Our unique Savings Facilities are designed to meet unique savings needs of our members.
Lucy Ndirangu, Member.
Elijah Olulo, Member.
Savings Account Fixed Deposit Chai Angel Junior Account Chai Premier Holiday Account Share Capital Member Deposits Chai Farmer Savings Accounts
Monica Yuaya, Member.
MEMBERSHIP REQUIREMENT Our membership is open to: Employees of KTDA and allied companies Business people Civil servants Employees of other corporate institutions Farmers Registered Groups Join us today by filling the membership application form available in our branches OR website: www.chai-sacco.co.ke
Eng. Fredrick Alouch, Chairman Supervisory Committee.
KTDA Plaza, 4th Floor,Moi Avenue P.O. Box 278-00200 City Square Nairobi Kenya Mobile: +254 709 808 000 / +254 709 800 100 Email: info@chai-sacco.co.ke
Committee to lobby more funds for industries By Dennis Bett The National Assembly Trade, Industrialization and Cooperatives Committee will push for allocation of more money to industries. The MPs said support should be accorded to the manufacturing sector and more so cooperative societies including ailing Sacco’s for the country to attain industrialization. The team led by Vice chairperson Oundo Wilberforce Ojiambo spoke
during a tour of the Rift Valley Textile Company (RIVATEX) in Eldoret town. They stressed that supporting industries was the sure way for Kenya attaining industrialization status, which is part of the big four agenda listed by the president. Nyando MP Jared Odoyo said the revival of Rivatex was enough testimony that with good investment and support Kenya can grow its industries to boost its economy.
A lot of money has been put into various industries and manufacturing under the Big Four Agenda that has created job opportunities for Kenyans - Odoyo. “A lot of money has been put into various industries and manufac-
turing under the Big Four Agenda that has created job opportunities for Kenyans,” said Odoyo. He added that the country needs about a million acres of cotton for Rivatex to get sufficient raw materials locally, hence the need for support from all stakeholders. “It is time we worked on seeing the results for billions of shillings that have been pumped into this facility,” added the Nyando MP. Rivatex Managing Director
Prof. Thomas Kipkurgat said already 80,000 farmers have started planting cotton. According to Prof. Kipkurgat, the Moi University-owned textile industry has 16,800 spindles that translate to 12 tons of yarn per day which can produce 70,000 meters of finished products daily. Other members included Robert Githinji (Gichimu MP) and Andrew Mwadime (Mwatate).
JUNE, 2021
26 | SACCO REVIEW
Sh10 million for PWDs Sacco as miraa traders get loans
By John Majau
Meru County Government has released Sh10 million to the Meru People With Disability (PWD) Sacco to empower them economically. The money will be lent out to members across the County at low interest rates in line with the devolved government’s promise to empower PWDs. Speaking when he presented the cheque to Sacco officials led by County PWD Board Chairman Mike Makarina and Sacco Chairman Adiel Murithi, Deputy Governor Titus Ntuchiu said they were aware that PWDs don’t need sympathy but empowerment so that they can become economically independent. He said in the future the government will continually increase the fund to ensure that PWDs are able to acquire a steady flow of income for their ventures. Their empowerment is also expected to contribute meaningfully to the vision and dream of Making Meru County Deputy Governor Titus Ntuchiu (2nd right) presents a dummy cheque to Meru Great. "The County Government will PWD Board Chairman Mr Mike Makarina (in a wheelchair) at the county headquarters. dispatch officers from Meru Mi- Photo/John Majau crofinance to train Sacco members on financial literacy and how to do profitable businesses,” said Ntuchiu. to be loaned out to more than 3800 government is working closely with He asked the PWD Board to members across Igembe and Tigania President Uhuru Kenyatta and the The County embark on a vigorous recruitment regions. National Government through the Government drive to ensure that the over 60,000 Deputy Governor Ntuchiu said Ministry of Trade, Industrializawill dispatch PWDs in Meru County are incorpo- the move is meant to cushion Mition and Enterprise Development to officers from Meru rated into the Sacco so that they can raa farmers from adverse effects of comprehensively address challenges Microfinance benefit from the fund. closure of their market in Somalia in the Miraa market by seeking new to train Sacco “We are committed to making and the COVID-19 pandemic third markets in countries such as Djibouti members on PWDs great because they are part wave. and Mozambique among others. financial literacy and parcel of the County," said the The County Government issued He said they are also organizing and how to deputy governor. the cheque through the Meru Microthe Meru County Miraa Conference do profitable The County Minister for Educa- finance to Sacco officials who were where authorities such as KEBS, businesses tion and Social Development Liner led by Miraa Stakeholders Chairman NACADA and others will be activeNkirote Kailanya urged the Sacco Moses Ntoachoro. ly engaged by Miraa Stakeholders. - Ntuchiu members to utilize the funds pruNtuchiu said they will dispatch That will help lift any restricdently so that it can grow and trans- officers from Meru Microfinance to tions and regulations which could be form the lives of the PWDs. Muriri, Mikinduri, Maua and Laare hindering research and development Makarina lauded the County markets to educate members on fi- SME loans. of Miraa products for export such as Ntuchiu said the SME loans Miraa gum, Miraa wine and Miraa Government for fulfilling their nancial literacy and discipline. will be given through the recently sweets among others. promise meant to empower PWDs. He said the team will also do Meanwhile, the County Gov- capacity building for them to access launched Meru County Post-COVThe Meru Miraa Conference ernment of Meru has allocated Sh5 other financial facilities being offered ID-19 Recovery Strategy for SMEs. has been postponed due to the onHe reiterated that the County going upsurge of the third wave of million to Nyambene Miraa Sacco by the County government including
‘
Covid-19. Meanwhile, the County Government of Meru has allocated Sh5 million to Nyambene Miraa Sacco to be loaned out to more than 3800 members across Igembe and Tigania regions. Deputy Governor Ntuchiu said the move is meant to cushion Miraa farmers from adverse effects of closure of their market in Somalia and the COVID-19 pandemic third wave. The County Government issued the cheque through the Meru Microfinance to Sacco officials who were led by Miraa Stakeholders Chairman Moses Ntoachoro. Ntuchiu said they will dispatch officers from Meru Microfinance to Muriri, Mikinduri, Maua and Laare markets to educate members on financial literacy and discipline. He said the team will also do capacity building for them to access other financial facilities being offered by the County government including SME loans. Ntuchiu said the SME loans will be given through the recently launched Meru County Post-COVID-19 Recovery Strategy for SMEs. He reiterated that the County government is working closely with President Uhuru Kenyatta and the National Government through the Ministry of Trade, Industrialization and Enterprise Development to comprehensively address challenges in the Miraa market by seeking new markets in countries such as Djibouti and Mozambique among others. He said they are also organizing the Meru County Miraa Conference where authorities such as KEBS, NACADA and others will be actively engaged by Miraa Stakeholders. That will help lift any restrictions and regulations which could be hindering research and development of Miraa products for export such as Miraa gum, Miraa wine and Miraa sweets among others. The Meru Miraa Conference has been postponed due to the ongoing upsurge of the third wave of Covid-19.
Farmers given heifers to boost milk yields By Dennis Bett Dairy farmers in Kapchemutwa Ward in Iten, Keiyo North Sub- County have received 33 high quality heifers to boost milk production in the county. It is expected that the Friesian and Ayrshire breed heifers will increase the average milk production from three to seven litres. The County Chief Officer for Livestock, Fisheries and Cooperatives, Dr. Benson Kibore, said they will go for top grade heifers from an area that has a potential for higher milk production. He added that genetics plays Dr. Benson Kibore, Chief Officer for Livestock, Fisheries a huge role in milk production and Co-operatives inspecting livestock. Photo/Dennis Bett and after sorting out the issue
through high performance heifers all other required needs will fall into place to increase in milk production. “As we move forward, we will advise our farmers appropriately and deliver the right technical information so that we are able to achieve the seven litres average per family,” said Kibore. He noted that by reaching the average milk production per household, the living standards and livelihoods of the families will also be uplifted. “Currently we are doing 170,000 litres per day as a County and we intend to move the number up to 200,000 litres per day in a short period of time,” he added.
He said cattle delivered to the farmers were vaccinated against the East Coast Fever because the County had established that the disease is prevalent in the area. “We lose Sh300 million each year to this disease and there is need of protecting the new genetic pool, hence the cattle have been vaccinated before giving them to the farmers. Kibore said they also asked the County to hire more extension officers who will teach farmers on how to make dairy feeds. They will also invest in a laboratory to help in testing for aflatoxin and to ensure the quality of milk produced is of high quality.
JUNE, 2021
SACCO REVIEW | 27
FOCUS ON JAMII SACCO ADM
Jamii Sacco records growth despite Covid-19 impact By Malachi Motano As most businesses struggle under the Covid-19 pandemic, Jamii Sacco realised gross revenue of Sh597.69 million in 2020 financial year compared to Sh580.68 in 2019. The Sacco also recorded a growth of 8.52 per cent in deposits and savings from Sh3.17 billion in 2019 to Sh3.44 billion, disbursing loans amounting to Sh1.94 billion. Loan advances as at the end of 2020 financial year stood at Sh3.85 billion up from Sh3.58 billion, posting a 7.54 per cent growth, thanks to the interests on loans and advances grew to Sh556.90 million. “I am very happy that despite increased loan net offs, withdrawals on retirement, salary cuts, and job losses after many businesses closed due to the
Eliud Chepkwony, Jamii Sacco CEO. effects of Covid-19, most of our members were resilient and participated in building their savings and deposits hence this growth,” said Jamii Sacco National Chairperson Anne Ambwere. She went on, “I am happy to note that the Sacco assets have grown to now over Sh4.67 billion up from Sh304.19 million in the year 2002 when I took over,” she said. The outgoing Chairperson added that the Sacco has recorded growth in all other operational areas including, membership, loan book and returns to members have continued to be recorded. “I am also very happy that all this growth happened during my tenure with a lot of support
by the system provider. “I wish to report that the system is working well, and the Sacco has managed to bring the records to date, including reconciliation; any member’s records with issues continue to be addressed as we go along. I want to encourage members to continue sharing their concerns with management for prompt action,” noted the chairperson. She said the service provider is still working with the Sacco management team and users in addressing any technical issues which include training, assuring members the system has supported the Sacco to address perennial issues of non-recovery, under-recovery including Jamii Sacco National Chairperson, Anne Ambwere during ADM.
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from the board, supervisory committee, Chief executive officer, the management team and cooperation of the members, delegates and stakeholders," she added. "As chairperson therefore I encourage all our members to build their savings and deposits to benefit from wealth creation, loan services and interests rebates”, she said. She encouraged members to approach the Sacco for loans to meet their short- and long –term development goals. Threshold As a result of the impressive growth, the Sacco paid to members with share capital over Sh10, 000 dividends at the rate of 12.50 per cent with any account below the threshold capitalised while interests on rebates paid out at the rate of 10 per cent. While 2020 provided a tough economic environment for businesses, the chairperson is proud that her Sacco through the team efforts of the board of directors, supervisory committee (BOD/ SC) and the staff, the Sacco achieved several milestones and activities. The Sacco implemented a new Information Communication Technology (ICT)-system-Vanguard financials from M/S Centrino Technologies Ltd and the post implementation challenges were taken up and addressed
Mr Wilberforce Chebet, National Vice Chairman.
Mr Ambrose Ogango, National Treasurer.
Jamii Sacco Delegates at a past ADM.
Mr Harrison Katoni, National Secretary.
28 | SACCO REVIEW
...from previous page accounting for all revenues. According to the Chairperson, the Vanguard Financials System will continue to serve members and the Sacco well into the future. Her board lays a lot of emphasis on using technology to deliver services to members. The Sacco up scaled Jamii M-Cash Advance to provide more short term loans and advances. Members can now access the advances and commit to repaying the same as per the terms and conditions applicable. On Education and training, the BoD, SC and management conducted the exercise under phase 1 in February 2020, covering Rift Valley, Western and Nyanza regions and were attended by a total of 1,074 members before suspending the program due to the outbreak of the pandemic. “We continue to implement the education and training to build members capacity and receive feedback on areas that require improvements and clarifications in the first quarter of 2021. We have extended the same training to members in Mt. Kenya, Lower Eastern, Northern and North Eastern and Coast regions in February and March”, said Ms Ambwere. For effective communication and idea sharing, the Sacco created a WhatsApp wall that brings together delegates and Sacco management to share issues relating to Sacco members, leaders and general operations. “I am happy to note that we continue to improve in the
JUNE, 2021
FOCUS ON JAMII SACCO ADM interactions at every level. The board has designated officers who include the chairperson and the Chief Executive Officer to respond to all issues raised on the forum and advice delegates on any official issue that requires clarification or action,” stated Ms. Ambwere. She noted that under the able leadership of the CEO Mr. Eliud Chepkwony who is now serving on contract after attaining retirement age of 60, the staff have continued to implement policies formulated by the board that provide better services to members. “We retained Mr. Chepkwony on a two year contract to enable the Sacco to further benefit from his institutional memory and wide experience. This has enabled him to implement critical programmes like development of a new strategic management plan (SMP) 2021-2025. The new SMP focuses on growth in membership, quality products and services, operational efficiency and institutional capacity building,” she added. He has also been able to see the implementation of human resource manual and acquisition installation and operationalization of a new MIS-System as well as implementation of succession plan of CEO’s position and other senior critical positions in the Sacco and mentoring or coaching of senior managers to take up higher responsibilities. In line with the Sacco policy, the Chairperson finally retires from the board having successfully served the Sacco for a long time as a director, delegate and a chairperson.
JAMII M-CASH THE NEW MSTAAFU THE THENEW NEWMSTAAFU MSTAAFU THABITI LOAN THABITI THABITILOAN LOAN
9# 7 *8 or 6# 0 *8 al
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Access your FOSA Account; Anywhere, Anytime Access FOSA Account; Anywhere, Anytime on youryour mobile phone 24/7 on: on your mobile phone 24/7 on: Dial DialUSSD USSD *356# forfornon-smart phone holders. *897# or *806# non- smart phone holders USSD *356# for non-smart phone holders. Dial Download the Jamii M-Cash App on your This is a facility for retirees and it has the following features: Download theaJamii M-Cash on your features: facility retirees andApp ithas hasthe thefollowing following Smartphone • This Available to retiree members This is ais facility forforretirees and itonly features: •The Available to must retiree members only holder. Smartphone member be a FOSAonly Account •• Available to retiree members •The Themember memberMUST must channel be a FOSA Account holder. OUR JAMII M-CASH PLATFORM ALLOWS TO: their monthly pensionYOU through •• The member must be a FOSA Account holder. • The member MUST channel their monthly pension through OUR JAMII M-CASH PLATFORM ALLOWS YOU TO: Account balance Inquiry FOSA. • The member MUST channel their monthly pension through FOSA. Account Mini statement Inquiry • balance A copy ofInquiry the retirement letter and an official form electing the FOSA. •Jamii A copy of the retirement letter andpay-point an officialshould form electing the Mini Mobile Money / Cash withdrawal SACCO FOSA as theletter pension be statement Inquiry • A copy of the retirement and anpay-point official form electing the Jamii SACCO FOSA as the pension should be attached. Mobile PIN Change Money / Cash withdrawal Jamii SACCO FOSA as the pension pay-point should be attached. • Maximum repayment period is 36 months. Funds Transfer PIN Change attached. •Interest Maximum repayment periodoris 12% 36 months. • rate is 1% per month per annum on a reducing Funds Loan Application Transfer • Maximum repayment period is 36 months. •balance. Interest rate is 1% per month or 12% per annum on a reducing Loan LoanApplication Payoff • Interest rate is 1% per month or 12% per annum on a reducing balance. • Ability is computed based on 1/3 rule on member’s net Loan UtilityPayoff Payments balance. •pension. Ability is computed based on 1/3 rule on member’s net Utility Lifestyle Services – Traffic • Ability is computed basedStatus on 1/3 rule on member’s net Payments pension. • Loans must be fully guaranteed by Deposits or Golden savings pension. •account. Loans must–beTraffic fully guaranteed by Deposits or Golden savings Lifestyle Services Status • Loans must be fully guaranteed by Deposits or Golden savings account. account.
Jamii Sacco Court t Mukenia Road t South ‘B’ Next to Mater Hospital tP.O.Box 57929-00200, Kenya t Telt+254 (020) 655 2477/48 +254 715 545Hospital / +254 704 914 143 TEL: 020 Road 7903200 Jamii Sacco Court Mukenia t South /‘B’ Next to961 Mater tP.O.Box 57929-00200, Kenya t tEmail: Tel +254info@jamiisacco.com (020) 655 2477/48 / +254 715 961 545 / +254 704 914 143 Jamii Sacco Court t Mukenia Road t South ‘B’ Next to Mater Hospital tEmail: info@jamiisacco.com tP.O.Box 57929-00200, Kenya t Tel TEL: +254 (020) 655 2477/48 / +254 715 961 545 / +254 704 914 143 020 7903200 www.jamiisacco.com tEmail: info@jamiisacco.com www.jamiisacco.com
www.jamiisacco.com
BOARD OF MEMBERS
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Mr Elijah Letangule, Director.
Harrison Tinga, Director.
Mr Japson Gitonga, Director.
Mr Jonathan Mengich, Director.
Henry Mayabi, Chairman, Supervisory.
Ms. Phanice Etemere, Director.
Mr James Keretai, Director.
Vicky Maiyo, Secretary, Supervisory.
SACCO REVIEW | 29
JUNE, 2021
WESTERN
Cane farmers union defends field officers By Andanje Wakhungu Kenya Union of Sugar Plantation and Allied Workers Union (KUSPAWU) has defended field officers on claims that they are corruptly issuing cane harvesting permits. The workers union said the public outcry and bribery claims by farmers over the issuance of cane harvesting permits are malicious. “It is the farmers who are to blame for bribing the officials and not the field officers,” said the union that also represents agricultural extension officers and field assistants. KUSPAWU Branch Secretary Jeremiah Akhonya said farmers were using short cuts to get quick services but the issue of delayed permitting was being handled by the factory and the union at large. He attributed the delay to the large quantity of cane that is ready for harvesting beyond the crushing capacity of the millers. “We are doing all we can to normalize because there is too much cane due to unexpected long rains throughout last year,” said Akhonya. He aded that the miller was also to blame for expanding their canes catchment areas leading to delayed issuance of permits crisis singling the West Kenya Sugar Company. Akhonya said the company has erected weighbridges in Chemilil
KUSPAWU Kabras Branch Secretary, Jeremiah Akhonya. Photo/Andanje Wakhungu (Kisumu), Misikhu (Bungoma), Magut (Uasin Gishu and others in Busia and on the border of Kisumu and Kericho counties from where cane is transported to the factory. “This means that we have expanded the catchment area of the factory but we have not expanded crushing capacity to meet the supply hence we are not able to mill as fast as we harvest and that is what is causing delays,” said Akhonya. Although Butali Sugar Company expanded its mills, the processor house that handles syrup was not enlarged and hence it cannot crush more than what the processor house can handle.
On the other hand West Kenya has done some expansion that has seen now two mills crushing more than 6,000 tons per day but the processor house limits the crushing capacity respectively. The hindrances being experienced are due to the low crushing capacity and this has led to the factories limiting the amount of raw materials coming in. “So the issue of field assistants delaying permits is regulated and dictated by the crushing capacity of the factories,” saidAkhonya. At West Kenya, the company has expanded its transport sector by bringing in new fleets (over100) tractors out of which 30 were taken to Misikhu, with Magut also receiving the same number to increase cane transportation to the factory. Another reason for delayed permitting is that West Kenya acquired huge chunks of cane lands in Chemilil, Dominion farm in Siaya, Trans Nzoia (Noah Wekesa farm). The union said West Kenya Sugar Company should be asked to set up another factory unit in Dominion farm Siaya to service the farmers within that area. “We are also still pushing for the Naitiri factory in Bungoma to start its operations as soon as possible to give farmers some reprieve in acquiring permits but the most important one is the Dominion one which is over 15,000 hectares. The union said the manage-
ment had suggested to set up a factory and now the cane from the farms have matured and need to be harvested. Akhonya warned of a major showdown between farmers and the millers if the two factories are not established l to ease congestion as millers continue harvesting from other areas. Cane farmers are now seeking to meet Senator Cleophas Malala and union officials to help resolve the issue quickly. The union officials also say there is need to liberalize the market to allow new players come in after the exit of Mumias which was
“So the issue of field assistants delaying permits is regulated and dictated by the crushing capacity of the factories...” Akhonya
KAKAMEGA
Cartels invade West Kenya sugar mills
Butali Sugarcane Farmers Association Chairman, William Kopi. Photo / Andanje Wakhungu By Staff Reporter Farmers supplying sugarcane to Butali Sugar Company have raised concern about cartels that have frustrated their operations and delivery of cane to the factory. Cartels also continue to interfere with cane harvesting in the region, weeks after local leaders threated to stage a demonstration over delayed cutting of the mature cane. Farmers’ leaders claim that their complaints and those of other groups representing the farmers
have been ignored by the Butali miller. It is alleged that 10 private farmers are the ones calling the shots and controlling those whose cane is to be permitted for harvesting. Farmers have now protested to the Kenya National Association for Sugarcane Farmers (KNASF) Butali branch, demanding to hold a meeting with union officials over the looming crisis. Led by KNASF branch secretary Ceasar Shiro, they confirmed local farmers had raised complaints over the miller opting to harvest cane outside their nucleus. “Butali is harvesting canes as far as Mumias and Nzoia and they have engaged private farmers who broker and transport the canes to the factory at a fee,” they said. The practice has in the process made the cane harvested outside their nucleus a lucrative business. Shiro who doubles as the manager Butali Sugar Cane Association revealed that so far they have identified 10 lorries belonging to business people who have invaded the sugar transport industry. The transporters are brokering deals with outside farmers to have their cane harvested and transport-
ed to Butali at a fee. The official said the vice was still rampant since the miller had given the brokers a clean bill of health at the expense of the local farmers. Butali is the one now pushing thousands of farmers against the wall after it had been considered the best paying per tonnage. The Chairman of the Butali Sugarcane Farmers Association,Mr William Kopi agreed that permit issuance was a big issue and they have been following it to establish
The practice has in the process made the cane harvested outside their nucleus a lucrative business. William Kopi
the root cause. He blamed the delay on the Coronavirus outbreak which stagnated many operations including the Butali milling industry that adjusted its crushing programme. “We used to crush 24 hours but we had to reduce to14 hours a day to control the influx of workers in and out of the factory to combat the spread of Covid-19,” noted Kopi. That, he said, decreased the issuance permits to farmers and that is what has caused the backlog together with a lot of rains that saw canes mature at high rate. “The factory’s crushing capacity per day is 2,500 tons but could not meet it and we have talked with the management on the need to increase to 3,000 tons which they are yet to agree,” he added. He however agreed that the association was toothless on matters concerning advocacy for the farmers after several attempts to streamline issues raised with the miller hit a snag. Kopi also told off the critics of Butali Sugar alleging that the same problems were being experienced in other factories hence none of the factories were better than the other in matters of service delivery.
the largest canecrushing company. All the cane that comes from Mumias, Bunyala, and Navakholo among other area, now end up at the West Kenya factory totally overwhelming its crushing capacity. Kakamega Governor Wycliffe Oparanya has been urged to continue pushing for the revival of Mumias Sugar Company as it will play a big role in sorting out the problems millers are experiencing. The union also said West Kenya has withdrawn all the farmer incentives it used to offer farmers. “There is a time when the miller will need the farmers unlike now when the factory cannot give them advance loans to pay school fees among other emergency needs,” they said. Akhonya noted that the two companies in Kakamega are not serving farmers to their satisfaction due to lack of farmers associations. West Kenya Sugar Company Limited (Wekscol) and Butali Out Growers Farmers Association were wound-up under unclear circumstances. “The farmers associations were key in advocating a level playing ground between the farmers and the miller but now that they are no more,” said Akhonya. It is upon the local leadership among them the MPs and MCAs within the sugar belt to push for the rights of the farmers.
SIRISIA Invest in Saccos, Subcounty residents told By Our Reporter Sirisia Sub County residents have been urged to invest their money in Co-operative Saccos to boost their lives economically. Speaking in Namwela during cherry payment, Kikai Rural Sacco Director, Mr Justus Wafula said people are facing tough economic constraints especially during this Covid-19 period due to lack of investment. “So many people have been visiting our offices asking for help and they are not even our members, so I’m urging our people to embrace a saving habit as the only way to come out of poverty” stated Mr. Wafula. He added that a part from banking services they have also come up with a way of increasing their income by starting farming projects to earn more dividends. Wafula, however, appealed to the County government of Bungoma through the Ministry of Trade to set aside funds in its budget that will be given to Saccos at a low interest to boost their businesses.
30 | SACCO REVIEW
JUNE, 2021
KIAMBU
Sacco collapses with Sh33m savings
Kumisa Sacco headquarters in Kiambu County. Photo/Felix Wanderi By Our Reporter Kumisa Savings and Credit Cooperative (Sacco) members have appealed to the Directorate of Criminal Investigations (DCI) and the Commissioner for Co-operatives to help them recover their savings The Sacco based at Kirigiti in Kiambu town, also referred to as ‘Hustlers Sacco” is a Sh10 savings society which has collapsed with millions of shillings in members savings. Over 3,000 members sought an audience with Kiambu Sub-County Cooperative officer Stephen Mwangi over their deposits. Some have also moved to court seeking assistance to recover their hard earned cash that they had painstakingly saved. The Sacco started by former Riabai Member of County Assembly Martin Wachira targeted low-income earners like hawkers, market sellers, touts, casual labourers and domestic house workers. They all welcomed the idea and joined in droves, giving it the impetus it needed but the MCA later handed it over to the Sacco members as he sought to focus on his
political career. The chairman of the supervisory committee Henry Kinge who was appointed by members after the former management was accused of running down the Sacco said it performed well in the first two years after its inception. “The Sacco was doing well as members would save and take loans but due to poor management but those in management misused our cash and did not follow up on loan repayments,” said Kinge. Some of the money saved by members was also used inappropriately by the management. He traces the problems to a mega project of the management engaged in of rearing pigs and chickens to boost their investment. The chicken project failed but the pig project went on smoothly although there was little to show for it. “After some time, as the supervisory team, we came to realise that the management had registered the pig project under a private company and not Kumisa Sacco,’ said Kinge. The discovery came too late because the management could not account for some money and the Sacco was going down.
The Kianbu District Co-operative Officer Peter Mwangi said the Sacco was being operated inappropriately as most of the daily savings were not taken to the bank. The money instead ended up in some people’s pockets while the the Sacco owed Sh912,000 forcing the landlord to auction its property to recover the debt. Records show the Sacco whose membership was drawn from Kirigiti, Riabai, Mai Mahiu and Maera raised more than Sh11 million in the first year and more than Sh33 million after two years. “All of a sudden, members were informed there was no money when they applied for loans, yet the total assets were in excess of Sh33 million and that is when we realized money had been mismanaged,” said Kinge. The pig-chicken projects cost members Sh1.4 million but they were told all the chicken died and the profit from the pig sales was so low but the money was not traced. “The pig project was registered under a limited company owned by five people who were in the Sacco management with shares of 100,000 split among themselves equally,” Kinge said.. That further showed that the Sacco facilitated the project without members’ knowledge.they wrote to the Kiambu Sub- County Co-operative Officer asking the Commissioner for Co-operatives to conduct an enquiry into the scandal. “The commissioner for co-operatives responded saying the Sacco should pay money for the enquiry to be conducted, but in the Sacco accounts the balance was zero,” Kinge said. There were so many accounts opened for the Sacco and it seemed to one way by the management used to syphon member’s hard-earned cash. The commissioner has agreed to investigate but at a fee of Sh400,000 but members say they cannot afford the fee.
NYERI
New Sacco for Othaya small traders By Staff Reporter
Sh15,000 to members, which has now increased to Sh200,000. Loans are guaranteed by their shares and members do not need collaterals, Wanjiru said, adding that they can now borrow three times their savings. Bernard Mwangi a member, said they started the Sacco with many challenges, while Agnes Njambi said it has enabled her acquire property. “I am also a trader and the money borrowed has greatly helped me grow my business,” she said. Laikipia Governor Nderitu
Small traders in Othaya, Nyeri County have no reason to worry of where to save their hard earned money after they registered a new Sacco. Small intreprenuours and mechanics can now use the Sacco in mobilising savings in the County and beyond. According to the traders Sacco chairman Joseph Wanjohi, the entity that started as a welfare group for mechanics and other small traders from Othaya constituency went to register with social services as the Vision but were advised that the group had grown and qualified to be a Sacco. “Many mechanics were not saving whatever they earned before. We had to convince them to start saving, pool the resources together, borrow the money and use it to expand their work,” he said. Now referred to as Nyeri South Traders Sacco, it is aiming at pooling resources and giving members loans to enable them expand their businesses. Speaking to the media during their recent Annual General Meeting (AGM), Wanjohi explained that their main objective is to grow and Nyeri South Traders Sacco start Front Office Service Activity Chairman Joseph Wanjohi. (FOSA) department and open more Photo/Asa Maina. branches within the county and in the neighbourhood. He reported that the Sacco Muriithi, who was the chief guest, membership had grown from 51 said 25% of domestic savings are to 86 members, while savings had held by Saccos, which are key figrown from Sh2.7 million in 2019 nancial institutions in Kenya. He said in Laikipia, the county to Sh4 million in 2020. The Loans also grew from government has engaged Saccos as Sh2.7 million to Sh3 million, while channels of the county’s economic the assets increased from Sh3.5 stimulus. That means Saccos can pick million to Sh5 million during the some resources from the county’s year under review. “Our Sacco targets the low- cooperative revolving fund at est cadres of people, especially the around 6% and give it to members mechanics, who have no permanent at seven per cent. “We have a lot of faith in Sacworking places and have to move cos as financial institutions,” he around with their tools,” he said. Board member Naomi Wanjiru said. said they started by giving loans of
NAROK
Nyeri South Traders Sacco records growth By Asa Maina Four-year-old Nyeri South Traders Sacco paid a dividend of 10% in 2020, an increase from eight percent in 2019. The Sacco chairman Joseph Wanjohi said it had also paid out a dividend of 10% in 2017 and but the payout declined to 4% in 2018. Speaking during its fourth Annual General Meeting (AGM) in Othaya, the chairman said savings grew from Sh2.7 million in 2019 to Sh4 million in 2020. Loans disbursed to members also increased from Sh2.8 million in 2019 to Sh3 million in 2020 while the assets grew from Sh3.5 million to Sh5 Members of Nyeri South Traders Sacco follow proceedings million. during the AGM in Othaya recently. Photo/Our Reporter
The Sacco was formed in 2017 by mechanics and other small traders from Othaya constituency in Nyeri County. Wanjohi said the entity was started as a welfare group and was registered as a Community Based Organization (CBO) with the social services department under the name New Vision. They rebranded after they were later advised that the groups qualified to be a Sacco. Wanjohi said the Sacco’s objective is pooling resources together to give members loans and empower them economically. “Many mechanics were not saving before and we had to convince them to start saving whatever little they earned, pool the resources together, borrow the money and use it to expand their
work,” he said. Membership has grown from 51 members since 2017 to about 86 last year. It gives loans to members with the credit being guaranteed by their shares and therefore does not need collaterals. Laikipia Governor Nderitu Muriithi, who was the chief guest during their AGM said 25% of domestic savings are held by Saccos and they are therefore very key financial institutions in Kenya. He said the county government has engaged Saccos as channels of the county’s economic stimulus. That, he said, means Saccos can pick some resources from the county’s cooperative revolving fund at around 6% and give it to members at 7%.
JUNE, 2021
SACCO REVIEW | 31
AGRICULTURE
Butali Sugarcane Farmers Association officials during a press briefing recently. Photo/Andanje Wakhungu
Farmers cry foul over cane harvesting The union official further pointed out the need to liberalize the industry to allow new players come in after the exit of Mumias which was a major crushing company as its cane from Mumias, Bunyala, Navakholo all end up in West Kenya factory totally overwhelming its crushing capacity. By Andanje Wakhungu After public outcry by the farmers over bribery claims to acquire a permit for harvesting canes, the workers union has come out to defend the supervisors over the allegation terming it as malicious. A body formed to advocate for the rights of agricultural extension, field assistants and field officers has instead blamed certain o blame for bribing certain officials to get quick services despite delayed permitting being an issue that is being handled by the factory and the union at large. The (KUSPAWU) branch secretary Jeremiah Akhonya attributes the delay to too much ready canes
to be harvested beyond the crushing capacity of the millers. “We are aware of the situation and we are doing all we can to normalize everything because there is too much raw material to be crushed and that is due to unexpected long rains throughout last year hence all the canes grew very fast.” The Branch secretary added that the miller’s idea to expand their canes catchment areas was also to blame for the delayed permits crisis singling West Kenya which has erected a weighbridge in Chemilil, Misikhu, Magut, Busia and on the border of Kisumu and Kericho counties that collects canes before being transported to the factory.
“This means that we have expanded the catchment area of the factory in terms of raw materials but we have not expanded our crushing capacity to meet the supply hence we are not able to mill as fast as we harvest and that is what is causing delays.” Although Butali sugar has done some expansion on its mills but is yet to do much on the process house and hence it cannot crush more than what the processor house can handle the syrup. On the other hand West Kenya has done some expansion that has seen now two mills crushing more than 6,000 tons per day but the processor house limits the crushing ca-
pacity respectively. The hindrances being experienced are due to the low crushing capacity and this has led to the factories limiting the amount of raw materials coming in. “So the issue of field assistants delaying permits is not their making but it is regulated and dictated by the crushing capacity of the factories. At West Kenya, the company has expanded its transport sector by bringing in new fleets (over100) tractors out of which 30 were taken to Misikhu, with Magut also receiving the same number to improve in transporting canes faster to the factory. Another reason for delayed permitting is after West Kenya acquired huge chunks of cane lands in Chemilil, Dominion farm in Siaya, Trans Nzoia (Noah Wekesa farm) that once harvesting begins it will run for the factory for two months nonstop. The union urged the country’s leadership to push West Kenya into putting up another factory unit in Dominion farm Siaya to service the farmers within that vicinity as it was their idea when they purchased the land. “We are also still pushing for the Naitiri factory to start its operations as soon as possible as it will give farmers some reprieve in acquiring permits but the most important one is the Dominion one which is over 15,000 hectares where the management had suggested to setup a factory and now the canes from those lands they purchased have matured and needs to be harvested.” However he warned of a major showdown between the farmers and the millers if the two factories are not established and operational to ease congestion being experienced as the millers continue to harvest outside canes. As Kakamega cane farmers continue to suffer at the expense of the expanded catchment areas farmers
canes, the union is seeking to meet Senator Cleophas Malala over the issue so that they can sit and deliberate. The union official further pointed out the need to liberalize the industry to allow new players come in after the exit of Mumias which was a major crushing company as its canes from Mumias, Bunyala, Navakholo all end up in West Kenya factory totally overwhelming its crushing capacity. Kakamega governor Wycliffe Oparanya has been urged to continue pushing for the revival of Mumias sugar as it will play a big role in salvaging the stalemate being witnessed by the millers. The union took a swipe at the management of West Kenya for losing touch with their farmers accusing them of failing to meet and address the issue on the ground amicably. “Since West Kenya realized there was more canes to harvest, it has withdrawn all the farmer incentives it used to offer and instead resolved to mistreating them at equal measure and this is where they are going wrong as many of these farmers will decide to uproot the crop and invest in alternative cash crops hence disable the industry, and there is a time when the miller will need the farmers unlike now when the factory cannot give them advance loans to pay school fees among other emergency needs”. The bigger predicament the farmers are engulfed in is, not knowing where the miller is harvesting canes as both local and outside farmers continue to complain bitterly. Akhonya noted that the two companies were not serving farmers to their satisfaction due to lack of farmers associations west Kenya Sugar Company limited (Wekscol) and Butali out growers farmers association which were scrapped un ceremonially through the dubious hidden hands of the millers.
Sh7 billion for revival of coffee sub-sector By Kamundia Muriithi The government plans to modernize coffee factories and implement the use of technology trading. Apart from the use of ICT in all operations, they will also roll out soil testing in coffee growing zones in a bid to revive the sub-sector. Agriculture CS Peter Munya has said they have set aside Sh7 billion for the Coffee Revitalization Project. The government will also use the fund to recruit extension officers who will guide farmers on best agronomical practices in coffee production. He was speaking during a public participation exercise in Embu on modernizing coffee factories and the Coffee Bill 2020. Munya said in addition farmers will benefit from low interest loans of 3% through the Cherry Advance
Coffee Fund. He said the government has set aside Sh3 billion for the fund and coffee delivered to the factory will act as the collateral. The government has also issued coffee cooperatives a 14-days ultimatum to ensure the farmers fill the forms and process their loans to improve the uptake of the funds. “The uptake of the fund is still low. We want farmers to access the low interest loans so that they can purchase inputs and benefit from their enhanced production,” he said. Munya also noted that the Ministry of Agriculture is drafting coffee regulations which after public participation and approval by legislators will streamline the coffee sector. “The regulations will bar millers from buying coffee and providing loans and advances to farmers because of conflict of interest,” he said.
The regulations have also capped loan interest by financial institutions at 5% in order to protect small farmers from exploitation by the institutions The operation fees charged by
Peter Munya, Agriculture CS. Photo/Kamundia Nuriithi
coffee societies have been capped at to 5% from 20% which they are currently charging. Munya added that the regulations have capped marketing fee at 2.5% and milling loss at 19% adding that research done has shown milling loss cannot exceed 18% though millers are currently charging it at 24%. “If the society wishes to increase the percentage it must have the consent of farmers and minutes sent to Commissioner of Cooperatives before they are approved by the CS,” he said. The CS noted the regulations will establish a Digital Settlement System where the marketer will deposit all the proceeds from the sale in a Direct Settlement Account which will be under the Coffee Board of Kenya and once all the deductions are done, the rest of the money will be sent directly to farmers within 14
days. For efficient performance in the sector, Munya said the government will reinstate coffee related institutions such as Coffee board of Kenya, Coffee Research Foundation and Coffee Exchange among others. Once the new regulations are approved, contracts entered between coffee millers and factories would be amended. “In the new regulations, factories have the right to choose their millers which will be done during Annual General Meetings and the minutes sent to the Coffee Board of Kenya and the Commissioner of Cooperatives,” he said. The CS said any factory directors who choose their millers without involving the farmers will be violating the regulations and are liable to prosecution.
IT AND TECHNOLOGY JUNE, 2021
32 | SACCO REVIEW
Covid -19 pandemic disrupted a lot of operations across many sectors of the economy and Sacco sector was one such industry. To understand how the pandemic really affected the Saccos space in Kenya, the volatility, lessons learnt and remedies to adopt to cushion future disruptions, Cynthia Wandia, core founder and CEO of Kwara, a digital banking platform for Saccos offering a modern way to run businesses as well as giving members easy ways to transact with Saccos, virtually hosted Joseph Njenga the CEO of Tamara Youth Sacco, and Sammy Githiaka, chairman of Oxford Sacco to discuss Service delivery post Covid-19 pandemic and the changing face of operations in Saccos
Sacco service delivery during and post Covid-19 pandemic
By Malachi Motano Cynthia: Thank you so much Sammy and Joseph and to kick it off, I will start with a question to situate you to this discussion. And this question goes to both of you. Covid 19 and its disruptions necessitated a lot of changes in operations of Sacco management. Take us through some of the changes you had to employ in your various Saccos. Joseph: Yes, at Tamara we did focus on moving to a digital platform. With the lockdown people could not meet in person so whenever they wanted to apply for loan we had them joining our digital portal, look at what they have, look at their statements, and continue with the conversation on calls so that we can be able to assist them Cynthia: Anything else you may want to expound for example changing the policy? Sammy: We had to be flexible enough to redo our products, services and even the credit terms, just to encourage members to able to access the loans, a decision we arrived at after realising that members were shying away from taking loans maybe for fear of the unknown next course of action. We had to modify some of our products and services for easy accessibility by members. We also had to open a whatsapp group for constant communication with our members. Joseph: Thanks, our situation was much similar to what Sammy painted. We had to change the way we interact with members and so our whatsapp group became more active for all communications with them and staff since nobody was commuting. Because some of our members were victims of the pandemic, we had to avoid charging usual interests since it was like an extra financial strain. We had to digitise our processes and also diversify our operations not just to focus on the tradition way. Cynthia: Taking another view as the leaders of the Sacco. What are some of the immediate worries that you had as soon as the situation began?
Sammy: What scared us much was the risk of defaulting since we knew some of our members had lost jobs while others were taking pay cuts. Just within three months we had noticed a challenge in contribution. Another worry was poor loan uptakes by members due to the many uncertainties that came with the pandemic. Cynthia: What was your immediate concern when you had of the restrictions and remittance began to shrink? Joseph: Our immediate concern was that the ratio of non-performing loans would go up because we focus on the youth whose small businesses in the informal sector run at night and you can remember at some point curfew was beginning early around 7 pm so, their businesses were very much affected lowering their remittance. Another concern was not being able to disburse more loans. We were also scared whether the employer would be able to remit the deductions from employees. Cynthia: You have mentioned something worth exploring thus membership growth, how did you manage to overcome this concern around growing membership, did you manage to grow your membership? Joseph: Not by much to be honest, but we did try to reach out to various Chamas, because we thought that we were in the same line of business. We encourage them to join the Sacco by taking the products that we have, but during the pandemic especially at the beginning it was very hard, however the situation is slowly improving as things get better Cynthia: Sammy, your Sacco being employer base, how did you manage your member numbers, what conversation did you have with members to make them understand that the Sacco is there for them and were you able to attract new members? Sammy: Thank you Cynthia as you say our Sacco is employer based and so we didn’t have many cases of members leaving or growth, how-
ever, this year we only managed to attract the people who had left either employment or the society at that time. Cynthia: What is the role of technology in cushioning the sector against these effects and unlocking a little bit forward?, What is the role of technology in ensuring continued service delivery even in this new world that we are living in?
Cythia Wandia, Co- founder and CEO of Kwara. Sammy: For us initially, we didn’t have technology as our main platform but we were lucky last year to get a digital platform. What that changed is because the company is registered in Nairobi, staff basically are people who live in Nairobi. And now when they were told to go and work from home majority of course went away and could access services through the digital platform. Technology helped us to reach our members, enabling them to access what they needed to know about their savings access products and services, general information as well as receiving their statements online. Joseph: Before the pandemic we were signing statements for our members on a monthly basis which I don’t think was very convenient to our members. Like Sammy, we were also able to procure a digital platform in the course of the year and mem-
bers were now able to access their statements, services in real time and quicker loan processing. With digitization we have become agile enough to see the trends in members deposits and how they are repaying their loans that advises us on how to work with them. Cynthia: Dear panellists, even as we conclude, what are some of the biggest take home lessons your Sacco learnt and how is that informing decision making in the management of your Saccos today, the mind-set shift? Joseph: The first take home would be more of an internal one so better cash flow management on our side. Before the pandemic the assumption was that business would just continue as usual but we so that anything can happen and put you in a condition you never envisioned. Secondly, ee need to make members enjoy similar experience, enabling them to get loans faster to enable them equally repay faster. Enabling them to access our products from everywhere so, automate or digitise as much as possible. Thirdly, we need to market ourselves better because I think most of the products and services Saccos in
Kenya provide are much better than what may be available on the online loan aps. Fourthly we need to innovate, improve our products to avoid usual or traditional products. We must learn how the customers are behaving and new market which means we had to transact all businesses online because that is the only way we could reach everyone. The pandemic is still here with us and even if it the goes, I don’t think we shall stop, so for Oxford society, we agree to embrace technology. I know even if we go back to the office majority will apply for loans online. The other thing we notice is that when there is panic, people really don’t know what to do so, during that time we had to do a lot of research as management, constantly seeking solutions that can help members to make decisions faster. Lastly as a Sacco, we must remain flexible so that it can also be able to adopt or adjust as fast as possible to the changing economic situation to earn higher return and for growth and sustainability. Cynthia: Thank you my panellists, that was so comprehensive and helpful in addressing service delivery post Covid-19 pandemic.
The power of the phone in the Covid-19 era.
SACCO REVIEW | 33
JUNE, 2021
RIFT VALLEY
Baringo dairy farmers appeal for urgent reforms to boost sector
Bead weaving changes livelihoods By Nancy Masit Nancymasit80@gmail.com
Bomet Dairy Co-operative Union milk processing plant. By Ken Langat Over 17000 dairy farmers from Baringo County have cast aspersions on the proposed BBI Bill fearing that some good clauses would be thrashed if subjected to referendum. Led by Baringo Agriculture Marketing Saccos and Cooperative Societies (Bàmcos) Chairman Samwel Salbei, they stated that clauses mitigating farmers woes should be salvaged through an Act of Parliament. BBI made sweeping recommendations targeting the agriculture sector and also proposed reforms integrated to salvage the stiffled sector. The document has clauses that guarantee maximum returns, price fixing and establishment of institu-
tions responsible for market linkage. It also has the enhancement of livestock breeding, provision of measures for disease control of livestock and other reforms. Salbei stated the only gift the MPs with goodwill from across political divide would give Kenyans is to speed up passing clauses that cushion farmers from vagaries of production, marketing and the weather calamities. He added that the move would spur the dwindling economic situation in the country and elevate farmers from financial doldrums. Salbei was addressing jubilant gatherings drawn from Ainamoi constituency in Kericho County who were hosted in Kiplombe location of Eldama Ravine constituency.
“ The much hyped Agenda 4 had been swallowed by BBI hence the only gift and legacy the 10th Parliament would be remembered and referred to by the future generation is passing clauses that could jumpstart the economy and agricultural production,” Salbei pleaded. He cited the Tea Bill which was passed recently in through parliament and appealed to the MPs to speed up reforms dairy sector. “Dairy farmers are currently operating under the mercy of cartels, imported cheap milk products from neighbouring countries, high cost milk production which needs to solved through the law,” he stated. He revealed that Bàmcos has over 17000 dairy farmers in 20 societies across the county.
Members of Nkoilale Women Group in Narok South Sub-County are now engaged in commercial bead weaving which has impacted positively on their lives. Magdalene Ntinka who is the production officer at their craft centre said the group was started in 2005 and has 85 women whose main activity is beadwork and shop operations. She said before women opened the craft centre to market their products, there was no identified market and they used to sell their items by the roadsides or under trees. They also sold their wares at throw away prices and sometimes, hence earning little income to cater for their basic needs. Their clients declined to buy the item and often demanded explanation as to why the price was high. That is why Nkoilale Community Development Organisation officials decided to look for a market for them.
They were linked to an organisation that officially engaged them and also employed an expert to train them to improve the quality of the beadwork items they were making. Magdalene said that the women are now selling bracelets, belts, necklaces and beads decorated Maasai rungus (clubs). “The women now have money to take their children to school and also improve their livelihoods by buying modern equipment for cooking like gas cookers, improved charcoal stoves (jiko koa) and production of biogas,” she said. They have bought water tanks to harvest water and they also conserve environment by buying tree seedlings for planting in their homesteads. They also assist their husbands and other family members to building modern houses and no longer live in manyattas. She urged the County government of Narok to assist women open more craft centres in the entire county so that they can employ themselves and earn a living from the beadwork.
A group member weaving a bracelet. This trade has empowered Maasai women financially. Photo/Nancy Masit
Coffee farmers receive seedlings By Dennis Bett Farmers in Keiyo South, Elgeyo Marakwet County have received 100,000 coffee seedlings for planting this season. That was after the farmers in Soy South Ward decided in 2018 to develop their own nurseries instead of buying coffee seedlings from other areas. Soy South Member of County Assembly (MCA), Jonah Tanui said they will be distributed to farmers to reduce the cost of procuring elsewhere at a higher cost of Sh70 per seedlings. He added that currently a kilogram of coffee seeds goes for Sh7,500 which translates to Soy North Ward MCA Jonah Tanui with members of Kormut 3,000 seedlings when planted Co-operative Society. Photo/Dennis Bett
which is cheaper as compared to buying a seedling at Sh70. Tanui said area leaders had resolved to support farmers with tree seedlings so as to reduce cost and ensure increased production. The 100,000 tree seedlings were given to the farmers this year and they are looking forward to putting up 50kgs of coffee beans in their nurseries which will translate to more than 200,000 coffee seedlings. “It’s a big campaign that we want our farmers to cultivate coffee as a cash crop because we have seen the better returns it brings,” said the MCA. “As we speak, some farmers are millionaires now because they have been paid good
amounts of money, an example is Koimur Co-operative Society, who in the past one week has paid its members Sh12 million, a big improvement from the past year,” said Tanui. Koimur Cooperative Society had 36 tons last year while Turesha Cooperative Society sold nine tons which translates to almost Sh25 million to our farmers. The MCA added that after two years the farmers will be able to get double their earnings and the environment will be well conserved. “If we plant coffee across the escarpment, landslides and wild fires will be minimal as it is a form of environmental conservation,” noted Tanui.
HUMOUR W RLD
34 | SACCO REVIEW
JUNE, 2021
The coronavirus culture shock that hit our village My last visit to Mavumbi Boys late last year where yours truly works was quite depressing to say the least and but it reminded me of the saying, every cloud has a silver lining. The place looked virtually dead and the noise from a church in the neighborhood which we used to consider a nuisance now seemed to have been adding life to our institution. Napoleon, who had accompanied me on the school tour to assess the impact of the untimely closure due to the coronavirus crisis, was still shaking his head as we inspected the remaining food ration. The grains were already invested with weevils while a grey film had developed onto the half used cooking fat, while onions and potatoes had begun germinating in the store. Now that it had dawned on us that the earliest schools were to reopen was in January this year, we discussed what to do with the food and other
perishable items before they went into complete waste. “We can give out the foodstuff as part of our Corporate Social Responsibility (CSR) gesture to aid those affected by Covid 19” Napoleon suggested. That was a very dumb one coming from the likes of Napoleon but to enlighten our forlorn spiritsm, I agreed with Nectar that we make a trip to the village to pay homage to her relatives. Along the way I longed to observe how lifestyles had changed since the so called deadly flu set foot in our country. The first person we met as we embarked on our short journey on the wrong footing was Emoji. Every now and then we wrapped a mask on her face, she peeled it off, throwing tantrums “Takimimi!”. Probably she was wondering what kind of loving parents could gag their girl who is
By Pascal Mwandambo just learning to talk and in the matatu things were just as you and me know. I was required to keep social distance with Nectar despite the fact that back home we share virtually everything at close range including the bed especially in this cold July weather. Thank God they did not
KICOTEC to dress Kitui Matatu crew
ask for social distance between Nectar and Emoji otherwise a small war could have erupted. Upon alighting in the village more drama was in waiting us, as we walked the short distance to Nectar’s home, where a group of children who had gathered by the roadside were singing defiantly. “Corona imekuja.. Corona imekuja” they belted, before letting out a burst of laughter and disappearing into nearby bushes. When Nectar extended her hand to greet the young lass who ran over meet us, it was left hanging in the air. That’s how much things have changed because this is a village where once shaking hands during greetings was regarded as sacred and invaluable like eating but now they were slowly adapting to the new normal. I learnt that cases of people being harassed by security officers during curfews were rare but once in a while two
AMREF Sacco goes virtual in operations
By Malachi Motano
By Staff Reporter
Kitui County Textile Centre (KICOTEC) will supply uniforms to all matatu crews operating along the Kitui - Nairobi route. The Passenger Service Vehicles (PSVs) Sacco for Matatus operating on the route struck the deal with County governor Charity Ngilu for the textile company to dress up its members and the operators. The Transport Welfare Association (Kinatwa) Sacco chairman Clinton Wambua said the arrangement makes economic sense and will help them save money. “Members agreed to have uniforms and other apparels made at the Kitui textile centre at subsidized prices,” said Wambua. He said the Governor met the Sacco members at a Kitui hotel and invited them to do business with the county governmentowned Kicotec. “Henceforth, all our staff uniforms and dustcoats will be sourced from Kicotec. It is cost effective because of the huge discounts we negotiated. It is also a
AMREF Sacco has adopted virtual board, staff and member education meetings to meet the Ministry of Health’s social distancing guidelines on Covid-19. The Sacco also introduced an editable loan and membership application forms and allowed members to submit electronic applications to ease engagement. It increased members loan limits to Sh150,000 from Sh70,000 through Instant Pesa and the M-Cash and also allowed members who had lost earnings to restructure loans. They have also hired a loans officer to support them in close monitoring of loans and debt recovery. The number of employees has also increased from the two they began with, one accounts and another in operations to 15 at their headquarters along Langata Road in Nairobi. Sacco Chairman George Bebora is glad that they now fully owns their own plot located behind the Wilson Airport, having completed the acquisition pro-
Governor Charity Ngilu during a meeting with KICOTEC Sacco members at a Kitui hotel. way of helping to nurture the local economy,” Wambua said. The Chairman added that Sacco membership will support Governor Ngilu’s agenda for Kitui and create wealth. During the meeting with Kinatwa members, Ngilu urged them to focus on the bigger picture and available opportunities. She said her administration
had availed a conducive business environment and many opportunities that had not been fully exploited by local entrepreneurs. She cited the County Empowerment Fund: “ We have the fund available this financial year and once approved by the county assembly, all Saccos and business people should access loans at as little as 5% interest.”
Administration Police officer s from the chiefs office visited an illicit brew dens to collect bribes. Kaseno the village witch has also reportedly been doing her evil things in the dead of the night. Talking of illicit brews, I also learnt that some chaps like my cousin Timotheo usually bought cheap keg sold from heavy metal barrels in five litre jerricans to drink in the privacy of their homes. However the talk of businesses taking a downturn is now like a living gospel both in the villages and in towns. That’s why everytime I visit Wakwitu, the butcher operator who sells me meat in Mavumbi town, he does not spare a chance to blame Kovinandini for his business woes, though we know he has been in very low waters since his hardworking wife deserted him.
cess. When Sacco Societies (Non-Deposit Taking Business) Regulations came into effect on January 1 this year, its members ratified a resolution to comply with the new rules set by the Sacco Societies Regulatory Authority (Sasra) during a virtual Annual General Meeting (AGM) that was held in Nairobi. The new rules require that Non- Deposit Taking Saccos with over Sh100 million in members’ deposits submit their applications for licensing by June 30, 2021. The new law also requires capital adequacy to cushion the Sacco from business risks as well as a three-year business plan and internal policies provision. They are also supposed to hire an internal auditor and upgrade the Core Banking System to enable the generation of reports to SASRA. “I am glad to report that we are fully compliant as you will see in the audited financial statements,” Mr Bebora told shareholders.
SACCO REVIEW | 35
JUNE, 2021 By Malachi Motano The Ethics and Anti-Corruption Commission (EACC) has raised the red flag over increased complaints of corruption in Savings and Credits Cooperative Societies (Saccos). Complaints voiced relate to abuse of office, embezzlement and misappropriation of funds, bribery and breach of trust and tax. EACC Chairman Retired Arch-Bishop Dr Eliud Wabukala has warned Sacco officials against engaging in corruption and other unethical practices. He said those found stealing members’ funds in the multibillion sector will be held accountable for their actions. Wabukala said the Commission received and analysed 372 complaints touching on co-operative Societies from the year 2013 to 2020. Out of those 47 fell within the mandate of the Commission and were taken up for investigations while about 31 of the complaints touched on administrative issues involving low and middle ranks of Saccos countrywide. “It is important to note that 114 of these complaints, translating to 31% of the total reports were about administration, which is a mandate of the regulator, Sacco Society Regulatory authority (Sasra). The reports also revealed that 91% of the persons in-
EACC alarmed by graft in Saccos EACC Chairman Retired Arch-Bishop Dr Eliud Wabukala has warned Sacco officials against engaging in corruption and other unethical practices. volved were in the low and ing forfeiture of approximately middle level ranks of the insti- Sh25.5 billion by public offitutions,” Wabukala noted. cers found to own unexplained He said the Commission wealth. had concluded investigations The forinto 1,000 corruption and mer Anglican related cases in the last five Church of Keyears. nya (ACK) It worked in close colArch-Bishlaboration with the Direcop was tor of Public Prosecution speaking (DPP) and secured conduring the victions in 169 cases out official of the 275 corruption cases opening of finalized in various courts. a capacity “The Commission rebuilding covered corruptly acquired assets worth approximately Sh25 billion and prevented the possible loss of public funds worth approximately Sh30.4 billion,” he said. Further, the EACC chairman Dr Eliud Wabukala EACC is pursu-
training of the Corruption Prevention Committee (CPC) and staff of the Sacco Regulator in Mombasa. He said the Commission has entered into a Memorandum of Understanding (MoU) with the State Department for Co-operatives aimed at combating and preventing corruption in the co-operatives sector. Wabukala said Sasra has registered about 180 licensed Saccos in the country controlling huge amounts of resources and, therefore, it was prudent for the sector to fully embrace transparency and accountability. According to the SASRA Reports, assets of Deposit-Taking Saccos account for 5.7 percent of the National Nominal Gross Domestic Product (GDP).
Saccos asset base has been increased by 12.4 percent from Sh495 billion in 2018 to Sh556.7 billion in 2019. “This makes the Saccos key players in realization of Vision 2030 through mobilization of savings for the country’s investment needs. Resources of such a high magnitude ought to be applied prudently with utmost transparency, accountability and sound leadership,” Wabukala said. He urged Saccos to run their institutions with integrity and professionalism, noting that EACC had so far received 400 complaints from co-operatives 16 of which fall under the Commission’s mandate. He promised to have the MoU ready for signing in a week in order to expeditiously deal with the rot in the Saccos. The Chairman warned that corruption in the country had reached unprecedented levels and stressed the need for concerted efforts to eradicate the vice. He added: “Corruption is a multifaceted phenomenon which cannot be eradicated by one institution.” The Commission joined hands with the State Department for Cooperative Societies and Ethics Commission for Cooperative Societies to promote ethics, corruption prevention, education, awareness and law enforcement in 2019.
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Sacco Review JUNE, 2021
Saccos must meet new rules June deadline »»
Page 2
Loan default hits guarantors
By Sammy Chivanga
Just as the name suggests, Savings and Credit Co-operative Societies (Saccos) are about members cooperating to create a pool of savings from which to borrow for growth. The Sacco movement in Kenya is founded on trust because people mobilise money and take loans at attractive interest rates to achieve their dreams. But the crucial aspect for the cooperative movement is a member using guarantors, usually fellow members, as security for the loan. The Sacco’s model is based on traditional social values where members accept to cover others with hope that those they have guaranteed will reciprocate. However, the rising case of members defaulting on payments is threatening the very crucial foundation that attracts people to Saccos; relying on each other for guarantee as opposed to assets such as land and log books. Courts are now replete with cases of Sacco members suing colleagues over broken promises while many others silently service loans they had not planned for after their once trusted friends vanished. Seven members of Stima Cooperative Society for instance in 2019
Winas Sacco chairman Robert Njue and Commissioner for Co-operatives Geoffrey Njang’ombe at a past function. moved to a Co-operative tribunal in Nairobi seeking to stop the Sacco from deducting them money after the member they guaranteed Sh3.7 million defaulted. The tribunal heard that the member was then an employee of Kenya Power in 2017 when he took the loan. Court documents showed the member applied for voluntary early retirement without the knowledge of guarantors yet he had four years left for his contract. The seven members lost the bid to stop Stima from deducting each of them Sh13,217 from their ac-
counts monthly to recover a total of Sh379,355 from each. “Due to the guarantee agreement we note that the 2nd respondent (Stima) would suffer great loss financially since there is no other collateral from which the defaulted amount can be recovered,” the tribunal said. And legally, the Sacco is justified to deduct the amount, because guarantors had signed an agreement that in case of default, the loan may be offset against their deposits in the Sacco or by attaching their salaries. But as many of such cases emerge, a rising level of mistrust
among Sacco members is making it difficult for the model of guaranteeing each other to go on smoothly. This has been worsened by the fragile economy that has seen thousands of workers, who are also Sacco members, lose jobs and therefore default on loans. Non-performing loans (NPLs) ratio for deposit-taking (DT) Saccos for instance jumped to 9.12 percent in June 2020—the highest since 2012 when it was at 9.6 percent. Gross loans stood at Sh426.4 billion meaning that the value of NPLs at the end of June was Sh38.89 billion in contrast with Sh25.79 billion at the end of December 2019. The latest NPL ratio is far off than the maximum of five percent that is prescribed by the Sacco Societies Regulatory Authority (Sasra) and means more guarantors could find themselves in trouble as their fellow members default. Alarmed by the rising loan defaults, Saccos have reacted by slamming breaks on the pace of lending to avoid elevating loan losses. The Commissioner for Cooperatives Development Geoffrey Njang’ombe says the current law is sufficient to ensure smooth lending in the cooperative movement. He however says members should ensure they have the capacity to comfortably guarantee others.
“We don’t have serious issues where Saccos follow the laid down structures for proper evaluation of loans. Those guaranteeing should also have the capacity to do so,” said Njang’ombe. “A weakness of any society like poor record keeping should not be seen as a weakness in law. The member has a duty to make an informed decision such as not guaranteeing somebody a loan with a maturity beyond their retirement period.” The law of contracts— in which the rights and responsibilities of guarantors are captured—allows financial institutions such as Saccos to go for the guarantor once the principal debtor is in breach. The National Assembly had in September 2019 passed the Law of Contract (Amendment) Bill, 2019 requiring creditors to realise the assets of the principal debtor before turning to guarantors. However, President Uhuru Kenyatta last February refused to assent to the Bill, arguing that it would affect creditors by making debt recovery longer and more expensive. “By requiring a creditor to realise all assets, the Amendment Act presupposes that the creditor has security over the assets or can cause a liquidation of the assets,” Bowmans Kenya, a law firm, had argued.
Adopt technology or be doomed, Saccos urged By Staff Reporter
within East Africa to deliberate on pertinent issues. She said IT departments of many Saccos are still hesitant to embrace digitisation fully for fear that it may reduce the chances of success or effectiveness. “Many Saccos in Kenya have developed strategic plans expected to give them competitive advantage, including the digitisation of customer relationship management and regulatory framework, monitoring, evaluation and mentorship and capacity building,” she says. Laura Chite, CEO of CIO East Africa said Saccos emerged as a response to the long bureaucratic processes associated with commercial banks and have become increasingly
popular particularly with people who have had little success procuring credit from banks. “Traditionally, Saccos have had their fair share of challenges that have hampered growth and profitability and like other organisations they were impacted by the Covid-19 pandemic,” she stated. She, however, said they have found news ways of doing things and some are already thriving which can be attributed to cutting edge technologies that are levelling the playing field for Saccos The technologies include cloud computing, Fintech, marketing automations, data analytics and digital identity.
Saving and Credit Cooperative Societies (Sacco) leaders must counter the fear of redundancy that is slowing the adoption of technology in their institutions. The Head of Information Technology (IT) at Boresha Sacco Winnie Sergon says it is only through adoption of technology that they can compete effectively in the financial sector. “It is until Saccos embrace digitisation that they will become competitive in the finance sector,” said Sergon. She said the shift to technology will transform and accelerate growth of the Saccos but many are adverse to that due to fear of making employees redundant. “The shift has been met with instances of objection as some employees believe that digitisation will lead to the automation of processes, rendering their jobs redundant,” she said. She was speaking at a panel during the virtual East Africa SaccoTech Forum 2021 organized by CIO East Africa themed: Accelerating The Change in Saccos. The four-hour session invites East Africa SaccoTech Forum during a meeting at the Naistakeholders in the Sacco space robi Serena Hotel. Photo/File SHREND PUBLISHERS
“Look at how your technology maps into your business strategy, several critical questions, like what your Sacco should invest in can be answered by trends such as IT security, data analytics, cloud computing,” she added. Sacco’s inspire a saving culture and have wider, far reaching impacts that touch on people’s lives. The Digipay.guru website says people in all parts of the world especially in Africa have a high level of comfort when it comes to mobile financial services because they depend more on Saccos. It says while Africa is a massive market when it comes to mobile financial services like mobile money, mobile banking among others, it however has a low banking penetration. That is because the unbanked people are directly dependent on Saccos for their credit and savings and so it only makes sense to marry both of them. At the meeting, the CEO of Intrasoft International Wambui Mbesa, opined that in this 4th Industrial Revolution, Saccos must prioritize setting aside budgets and embracing forward-thinking strategies and rewriting the Sacco rule book. “The only sure way to grow and thrive as Saccos now and in the future is to embrace digitisation that will in return rewrite the Sacco rule book. At Intrasoft, we promise to walk that journey with Saccos,” she said, Paul Nabiswa the Chief Operat-
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Laura Chite, CEO of CIO East Africa. ing Officer and Director of Analytics at E nvision Global observed that the Covid-19 pandemic was another major motivation for the digitisation journey. He said it forced the industry and the banking sector to adopt social distancing measures to curb the spread of the disease, but they still deliver the seamless services promised to their clients. “In such times it is imperative that Saccos embrace digital channels that can minimize human contact,” he added. Tony Mutero the General Manager of ICT at Police Sacco said digital leadership must now explore the growing use of digital technologies in addressing the digitisation gap in Saccos. “Technologies like Cloud enable Saccos to provide service without a lot of expenditure thereby maximising on profits,” he noted.
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