SACCO
New regulation guidelines to root out Co-operative quacks
REVIEW
KSPC CEO Symon Mburia
Website: www.saccoreview.co.ke
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THE LEADING NEWSPAPER FOR THE CO-OPERATIVE MOVEMENT IN KENYA
JULY KSHS 50 ISSUE 74
Current high inflation hits Sacco savings
Mr. Peter Njunguna, SASRA CEO
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INSIDE: SACCO LEADER | SACCO DIARY | HOUSING & INVESTMENT | HUMOR WORLD
: Sacco Review Newspaper
Coops @ 100: The rich history of rising industry Page 17
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T
he Co-operative movement in Kenya has made a significant contribution to the country’s economy, notwithstanding emerging challenges as the country marks 100 years of Co-operative existence. According to the Nationwide Cooperative Sector Baseline Survey carried out in September 2020, Kenya had a total of 23,275 registered Cooperative societies, of which 8,814 were active. The survey’s report further classified these societies as Savings and Credit, marketing, housing, consumer, investments, transport, multipurpose, handicraft, agricultural marketing, fishing, ranching, timber and others; which is a clear manifestation that the cooperative sector is present in all the sectors of our economy.
Sacco women awarded scholarships
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»» STORY PAGE 2
Ali Noor, Co-operative PS
Federations to replace NACOS in new Cooperative reforms »»
SASRA urges Saccos to review growth yardsticks
The imposing Imarika Plaza which was officially opened recently. The completion of the building is a major milestone for Imarika Sacco, one of the fastest growing Saccos in the country. (Inset) Imarika Sacco Chairman Renson Ndoro with CAK CEO Daniel Marube helping the PS for Cooperative Development Ali Noor Ismail cut the ribbon to mark the official opening of the Imarika Plaza in Kilifi County. Photo Courtesy »» Story Pages 8 & 9
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Tujitegemee Kiuchumi We have a wide range of members. TSC Employees. People from the private sector, people in business, just to mention a few. Welcome today, we surely have something for everyone
SHARES DEPOSITS EMERGENCY LOAN FEES LOAN DEVELOPMENT LOAN TOP-UP LOAN SUPER SAVER LOAN PREFERENTIAL LOAN SMART SAVER LOAN
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PRODUCTS AND SERVICES
PRODUCTS (BOSA) • • • • • • • • •
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PRODUCTS (FOSA) • • • • • • •
AKIBA ACCOUNT JUNIOR ACCOUNT PIONEER SALARY ACCOUNT JIINUE SALARY ACCOUNT FIXED DEPOSIT ACCOUNT SACCO-LINK DEBIT CARD MOBILE BANKING
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ADVANCES • PREMIUM LOAN • INSTANT LOAN • TULIZA LOAN
PRODUCTS (MCU) • MICRO CREDIT ACCOUNT • BUSINESS LOAN • ASSET FINANCING
Postal Address: 2274,30200 Kitale Cell-phone: 0712585874, 0728337194 Admin no: 0712 585874 Customer Service No: 0111050510 Physical Adress: Teachers Plaza, Next to Kitale Police Station Email: info@tntsacco.co.ke | tntsacco@yahoo.com | Website: www.tntsacco.co.ke
JULY, 2022
2 | SACCO REVIEW
Kenya’s 100 Years of Co-operative Ups and Downs A 2020 nationwide Cooperative Sector Baseline Survey revealed that cooperatives have nationally amassed assets of more than KSh1.167 trillion while contributing to 2 per cent of the country’s Gross Domestic Product (GDP). By Roy Hezron The Co-operative movement in Kenya has made a significant contribution to the country’s economy, notwithstanding emerging challenges as the country marks 100 years of Co-operative existence. According to the Nationwide Cooperative Sector Baseline Survey carried out in September 2020, Kenya had a total of 23,275 registered cooperative societies, of which 8, 814 were active. The survey’s report further classified these societies as Savings and Credit, marketing, housing, consumer, investments, transport, multipurpose, handicraft, agricultural marketing, fishing, ranching, timber and others; which is a clear manifestation that the cooperative sector is present in all the sectors of our economy. According to the report, co-operatives have nationally amassed assets of more than Ksh1.167 trillion while members’ deposits are valued at KSh844 billion. The sector contributed 2 per cent of the country’s Gross Domestic Product (GDP) during the review period. In 2002, a new Co-operatives law was enacted, laying the base for turnaround in the performance of Co-oper-
atives and today, the cooperative sector in Kenya is leading in Africa and the Sacco sub-sector specifically was once voted as the fastest growing globally. As Kenya joins the world in celebrating the 100th Ushirika Day at KICC on July 2, 2022, Sacco Review carried an in-depth interview with Symon Mburia, who is the Acting Chief Executive Officer of the Kenya Society of Professional Co-operators (KSPC); he gave a reflection of the Co-operative movement in the country, its growth and the challenges the movement has faced since inception. According to Mburia, the growth of co-operatives can be described in several phases; that is, period before 1970, period between 1970 -1985, period between 1985 and 1995, 1995-2002, Cooperators following proceedings at YMCA hall in Nyeri town at 2002-2010, and the post-2010 period. He observes that the period before a past Ushirika Day event. The sacco industry has made major 1970 recorded high growth in co-op- strides since independence. File photo eratives, seeing the establishment of co-operatives in the country, which key cooperative institutions like Ken- ed. He notes that the Structural Adjust- have been in existence for more than ya Planters Cooperative Union Ltd (KPCU), Kenya Farmers Association ment Programmes (SAPs) by the World 100 years, the performance of co-oper(KFA), Kenya Cooperative Creameries Bank encouraged privatization and the atives through this period have posted (KCC), Cooperative Bank of Kenya and enactment of 1997 Co-operative Societ- wide-ranging results in various sectors ies Act saw Saccos starting Front Office where the movement has representaCooperative Insurance Services (CIC). tion. “These were very strong national Activities (FOSAs). For instance, the performance of agco-operative institutions and remain Achievements, challenges, ricultural crop marketing co-operatives as such today. The period 1970-1985 mitigations for Co-operative is different from that of Saccos, dairy witnessed rapid growth of cooperatives sector co-operatives, transport co-operatives, with the first savings and credit cooperThe country’s Co-operative sector mining co-operatives, consumer coopatives being registered,” said Mburia. He added: “Major crops like cof- has now gone global with CIC and Co- eratives or even worker co-operatives. “The general objective of a Co-opfee, pyrethrum and others were doing operative Bank having investments in Malawi and South Sudan respectively. erative is to promote the economic interpretty well, earning farmers and the Kenya hosts the Africa Confeder- est and general welfare of members in government good returns. The coffee and pyrethrum Unions were very strong ation of Cooperative Savings Credit accordance with co-operative principles during this time. Many towns in Kenya Associations (ACCOSCA) offices and and values. Each cooperative sub-secfrom Kisii, Bungoma, Murang’a, Ki- also the International Co-operative Al- tor faces distinct challenges, different rinyaga, Embu, Meru and many others liance (ICA) Africa regional offices, from the other sub-sectors,” observed have remnants of major infrastructural which is a big honour for the Kenyan Mburia. Among the challenges that affect developments implemented during this movement. However, Mburia observes that a the Co-operative movement in the period.” According to Mburia, the period lot needs to be done to revitalize the ag- country, according to the National Co1985-1995 can be remembered since ricultural co-operatives for them to im- operative Policy (Sessional Paper no. 4 it is the time that saw many agricul- prove productivity and engage in value of 2020), are inadequate legal and institure-based co-operatives starting to per- addition for maximum benefit to their tutional frameworks. To address this, the policy focuses form poorly, though Saving and Credit members. Despite early establishment of to accelerate the growth and developCo-operatives (Saccos) were not affect-
ment of the co-operative sector through legal and institutional reform. Since the enactment of the Kenya’s 2010 Constitution, the co-operative function was devolved to the counties. This meant that regulation and supervision of co-operatives, especially primary co-operatives, became the responsibility of the county governments while the national government was left with the functions of Cooperative policy and Cooperative standards. The absence of unifying law and the disruption of the cooperative ecosystem has been a major source of confusion, conflict and underperformance of the sector. “There exists, especially in crop marketing co-operatives, the discordant actions between the regulating government agency and the licensing agency, which need to be harmonized,” noted Mburia. Inadequate production, inaccess to shared resources, and minimal value addition and marketing, also affect the movement in the country since the objective of the cooperatives is to maximize returns to the farmers; which would be achieved if cooperatives can engage in value adding activities. For maximum results, agricultural cooperatives must be involved in every stage along the value chain from production to markets. Currently, many cooperatives just produce raw materials, leaving the rest of the chain to other parties who end up gaining more. Poor saving culture, which will be mitigated through development of policies and products that promote savings in co-operatives, will enhance financial deepening and investments through co-operatives. Another challenge that also affects the sector is poorly linked and co-ordinated co-operative sector whereby to mitigate this, Mburia notes that institutional framework for enhancement of co-operation, consultation and co-ordination of co-operatives management should be established. According to Mburia, this should be done through redefining of country’s cooperative structure from the primary level to the apex, ensuring that every cooperative sub-sector has a presence at every level. Currently, only savings and credit cooperatives and housing cooperatives are visible at the national l level.
Stima Sacco sponsors beautification of Kisumu City By Fredrick Odiero Stima Sacco Chief Executive Officer Gamaliel Hassan has expressed his Sacco’s commitment to give back to the society as part of their Corporate Social Responsibility (CSR). Speaking during the official opening of a major roundabout refurbished by the Sacco in Kisumu city, Hassan said his Sacco was keen on elevating the environment through conservation and beautification programmes. “Kisumu city is a busy city with people from far and wide. The adoption of the roundabout goes a long way in giving the city the much-needed aesthetic facelift,” he said. He said doing so demonstrates the values underpinning their organization’s mission and choices. “Our employees strive daily to enrich lives through business and
Kisumu CECM for Cooperatives Development Dickson Obungu officially unveils the refurbrished roundabout in Kisumu City sponsored by Stima Sacco. Looking on are Sacco CEO Gamaliel Hassan (left) with Sacco Kisumu branch manager Anne Ayoro (centre). Photo/Fredrick Odiero
community activities,” he said. Hassan added that they focus their energies on initiatives that support their diverse membership and protection of the environment. Kisumu Stima Sacco branch manager Anne Ayoro said the area has 24,000 members. Ayoro said their high member retention is due to their affordable products and efficient services with very low turnaround times. The manager said some of their future plans include growing membership base to 40,000 with an asset base of Shs6 billion by 2024. She proudly revealed that the Sacco is ranked as the 2nd best Sacco in Kenya and that during 2019 Ushirika Day celebrations, it was feted as the ‘Most Innovative Nationwide Sacco’. Ayoro said they have been working closely with the community
through CSR and that some of their initiatives include the beautification of Kisumu’s Oginga Odinga Street roundabout, donating text books to Obambo Secondary School in Siaya County and Nyagowa Secondary School in Homa Bay County, and refurbishing a special unit classroom in Acts of Hope Academy in Kisumu County. Kisumu County Cooperatives Executive Committee Member Mr. Dickson Obungu advised members of the public to join the Sacco movement. He added that through loans from Saccos, people grow. Also present at the function was city manager Abala Wanga, the director of Trade and Industrialization Mr. Bovince Ochieng and local Director for Co-operatives Ms. Susan Kanga.
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
JULY, 2022
Resilient Ufanisi DT Sacco records progress across 5 years
SACCO REVIEW | 3
UFANISI DT SACCO SOCIETY LTD Your Future Secured
3rd Floor, Development House, Moi Avenue
current employees of AFC as well as elP.O. BOX 2973- 00200 NAIROBI igible business entrepreneurs’ and memWe are proud to Tel: No.(+254) 020-2246383 fanisi Deposit-Taking bers of the general public, also recorded be associated Mobile:0712690660/0734690660 Sacco Society Limited an increase in members’ deposits during Ufanisi DT Sacco is with the Email: info@ufanisisacco.co.ke has continued to post the same year, which increased from registered with CRB Website: www.ufanisisacco.co.ke impressive performance KSh240 million in 2020 to KSh265.3 100th trends for the last five years with its as- million, representing a 9.77 per cent Ushirika Day set base growing by 10.3 per cent from growth. celebrations. OBJECTIVES At the same time, loans and advancKSh330 million in 2020 to KSh365 milBOSA PRODUCTS a.To encourage thrift among its members by es to members stood at KSh299.7 million lion in 2021. affording them an opportunity to accumulate The Sacco, which was registered in 2021 compared to KSh258.6 million their savings NORMAL LOANS VISION in July 6, 1973 as a Savings and Credit in the previous year, representing an inb.To create a source of funds where members can Co-operative (Sacco) Society for em- crease of 15.9 per cent. - Nawiri Loan borrow at a fair and reasonable interest rate To be the ultimate innovative The total revenue increased from ployees of Agricultural Finance Corpoc.To provide members with credit for provident financial partner - Jibebe Loan ration (AFC), and later being among the KSh48.6 million in 2020 to KSh58.7 and productive purpose. Zawadi Loan MISSION first Saccos to be registered and comply million in 2021, representing a growth MEMBERSHIP JIINUE LOAN A person shall be eligible for membership if he/ with Sacco Society Regulatory Author- of 21 per cent, which was as a result of To empower members through she is: ity (SASRA) regulations; revealed its increased lending during the year under EMERGENCY LOANS mobilization of financial resources a.An employee or ex- employee of Agricultural and provision of customer growth during the 49th Annual General review. COLLEGE FEES LOAN Financial Corporation responsive financial solutions In 2021, the Sacco membership Meeting (AGM) on March 26, 2022. b.Employee of the Sacco through modern technology. SCHOOL FEES LOAN According to the Sacco National stood at 861 active members compared c.An employee of parastatal bodies and other to 832 in 2020, an CORE VALUES agencies approved by the board as per the FOSA PRODUCTS increase of 3.4 per membership policy Integrity cent. It is upon this d.Any individual(s) introduced by society’s Customer focus statistic that the member. SALARY ADVANCE Teamwork chairman encourCompetitiveness CHEQUE CLEARANCE Innovation Besides the above, the person shall have the aged members to HOLIDAY ACCOUNT All the other universal cooperative following qualifications: take an active part values as entrenched in the I.Is not less than 18 years of age, if a natural ONE MONTH ADVANCE in the recruitment SACCO by-laws. person 3 MONTH ADVANCE of new members ii.Is not a member of another salaried based to accelerate the 6 MONTH ADVANCE SACCO with competing interest as Ufanisi DT growth of the Sac12 MONTH ADVANCE SACCO. co. As an incentive, iii.Is not directly or indirectly a money lender or KARIBU ADVANCE Members training in Eldoret the Board resolved to carrying such activities that may be detrimental SCHOOL FEES ACCOUNT to the objectives of the SACCO chairman CPA Akeno Tom Okeyo, they re-introduce the Shs500 stipend payable FIXED DEPOSIT iv.Is of good character. endeavour to be the best Sacco in Tier 3; to members for every new member reINSURANCE PREMIUM FINANCING that is, small-sized Saccos by total assets cruited. The members resolved that the Sac- hence the need to continue leveraging on technology to improve service deliv- co’s borrowing powers be maintained at BOARD OF DIRECTORS ery on both products and services, attrib- KSh20 million. On the other hand, it was uting the growth as a result of growth in agreed that Interest on Members Deposmembers’ deposits and increased loan its for the year 2021 be paid at the rate of 9 per cent, alongside honoraria payment. uptake in 2021. “With the experience and lessons Dividends on share capital for the same period were to be capitalized on BOSA learnt from the Covid-19 yearpandemic, 2021 be paid at the rate of 9 percent, alongside honoraria payment. Dividends on emphasis will be placed on risk manage- deposits at the rate of 17 per cent. capital for the same period were to betocapitalized on BOSA deposits at the rate of 17 However, members resolved rement to ensure sustainableshare operations in percent. We view the qualifications for the Sacco the prevailing business environment. will continue to leverage on technology leadership, resolving that for one to qualHowever, members qualifications for the Sacco leadership, resolving ify forresolved leadershipto of review the Saccothe Board and to ensure delivery of products and serthat for one to qualify for leadership of the Sacco Board and the Supervisory Committee, the Supervisory Committee, one should vices to our members in an efficient and have a minimum of KSh500,000 as one should a minimum of Sh.500, 000 as BOSA deposits, and additionally sign a bond convenient manner. We endeavour to behave BOSA 000. deposits, and additionally sign a the best Sacco in Tier 3,”of said CPA Aksecurity of Sh.500, Vice Chairman, CPA Treasurer, CISA Hon.secretary, security bond of KSh500,000. eno. Chairman, CPA Augustine F. Wasike Andrew A. Wanga Nelly W. K. Melita The Sacco, which serves andintroduced an optional capitalization incentive Tomprogramme O. Akeno on Interest on The past board By Roy Hezron
U
The Board introduced an optional capitalization incentive programme on Interest on Deposits with the following bonus rates being applicable for the 2021:
Deposits with the following bonus rates being applicable for the 2021 Interest on Deposits: PERCENTAGE OF CAPITALIZED INTEREST ON DEPOSITS 100% 75% 50% 25%
PERCENTAGE EARNING (RETURN) 10% 7.5% 5% 2.5%
2021 2020 2019 2018 2017 Board Member, Key Performance Parameters PERFORMANCE TRENDS FOR Society THE LAST 5Limited YEARS was registered in July 6,Board Member, Ufanisi DTSacco Credit Co- M. Kimani KES KES KES KES KES 1973 as a Savings and CPA Henry
S.Corporation M. Abuga (AFC). operative (SACCO) Society of Agricultural Claire Finance 2021 2020 2019 for employees 2018 2017
Key Performance Parameters Asset base
364,901,751
330,690,512
282,557,901
237,763,070
200,593,459
KES KES KES Later, on JulyKES 22, 2013, it was KES registered with the Sacco Society Regulatory Authority 58,782,360 48,581,578 42,880,332 38,409,610 364,901,751on330,690,512 282,557,901 237,763,070 (SASRA) being among the first Saccos200,593,459 to comply 32,441,568 with SASRA regulations.
Total AssetRevenue base
Loans & Advances Total Revenue
Board Member, John M. Ngetich
Board Member, Polycarp E. Otero
SUPERVISORY COMMITTEE
299,746,411 258,621,627 165,202,687 48,581,578 42,880,332 38,409,610 201,375,256 The58,782,360 Sacco now serves past215,835,908 and current32,441,568 employees of Agricultural Finance Corporation 299,746,411 258,621,627 215,835,908 201,375,256 165,202,687 and members of the general public. (AFC), as well as239,991,098 eligible business entrepreneurs' 265,278,474 203,511,956 183,607,810 158,010,257
Loans & Advances Members’ Deposits Members’ Deposits
265,278,474
239,991,098
203,511,956
183,607,810
158,010,257
Rate of Returns forRATE theOFLast 5 Years the last 5 years RETURNS FOR THEor LAST 5 YEARS Rate of Returns for the Last 5 Years or the last 5 years Rate Rate
2021 2021 2020
2020 2018 2019 2017 2018 2019
2017
17%
17% 17% 16.7% 17% 15% 16.7%
15%
Interest onMembers’ Members’ Deposit (REBATES) Interest on Deposit (REBATES) 9% DIVIDENDS DIVIDENDS
The Sacco objectives are:
The Sacco objectives are: 1.
9% 8.5%
17% 17%
8.5% 8% 7%7.5% 8% 7.5%
7%
To encourage thrift among its members by affording them an opportunity to
Board Member, Rose M. Lwali
CEO, CPA Frederick M. Abuyabo
Supervisory Chair, CPA Cornelius G. Onsongo
Supervisory Secretary, CPA Leonard C. Mwangi
Supervisory Member, CPA Francis N. Ndegwa
JULY, 2022
4 | SACCO REVIEW By George Otieno
H
azina Sacco, one of the tier one Saccos in the country, has opened a new satellite office in Mombasa County and introduced enhanced products and services to serve members of the coastal city. The colourful mega event was graced by Mvita Sub-county cooperative officer, the Sacco’s top national leaders and the Sacco’s members. The new office is located along Nkrumah Road. The Sacco’s National Chairman Mr. Evans Kibagendi said the launch is part of the Sacco’s strategic move of expansion. He said Mombasa is an important region considering it has many of the society’s members. “We’ve given Mombasa the first big office after Nairobi so as to draw more membership from the region,” he explained. Mr. Kibagendi said they have worked hard to get Hazina Sacco to its current
Hazina Sacco launches Mombasa satellite office, introduces enhanced products, services
"The Board is in the process of ensuring we give them value by opening a satellite office there,” he concluded. Mvita Sub-county Cooperative Officer Madam Jackline Kemboi, who was the chief guest at the event, applauded Hazina Sacco for the commendable strides it has made. She urged the Sacco leaders to focus on services and products that are people-centred. She urged them to think of Sharia-compliant products to better serve the people of Mombasa County. "We should focus on people-centred issues so that we are able to serve the movement," Kemboi stated. Kemboi also encouraged the society to embrace the digital space so as to reach more people, especially the youth, to patronize their services. She urged the Sacco’s management to educate their members in financial literacy to enable them make good use of loans and ensure the Sacco does not have huge numbers of
The colourful mega event was graced by Mvita Sub-county cooperative officer, the Sacco’s top national leaders and members. The new branch is located along Nkrumah Road. The National Chair Mr. Evans Kibagendi
heights and made it the preferable Sacco for the people of Mombasa. “We have worked hard and sacrificed so much. We have more than KsSh8.5 billion members’ deposits, a sign that members have a lot of confidence in the society," he said. He went on to add that the Sacco offers the cheapest interest on loans, gives a maximum of thirty million shillings, has products that are very preferable and has an interest on reducing balance. He revealed that they are likely to open another office in Kitale because the staff and members there have been working hard.
Sacco CEO Dickson Okungu
We have worked hard and sacrificed so much. We have more than Sh.8.5 billion members’ deposits, a sign that members have a lot of confidence in the society
non-performing loans. “Live by your tagline ‘Together we Prosper’. Members need to be equipped with financial management knowledge. It is our responsibility as Saccos to come in and ensure our members are informed on the proper use of their finances., she concluded. National Vice Chairman Mr. Macdonald George Obudho praised the staff and members from Mombasa office for the stunning job that led to the magnificent launch of their office. "I want to encourage the
- Mr. Kibagendi
Mombasa Office chairman Mr. Nyang’au Mobibo
Sacco’s management educate their members in financial literacy to enable them make good use of loans and ensure the Sacco doesn’t record a huge number of non-performing loans - Jackline Kemboi
Mr. Macdonald George Obudho, Vice Chairman
Continued next page...
SACCO REVIEW | 5
JULY, 2022
New office breathes freshness into vibrant Sacco After the breathtaking launch, the society will now be able to serve people from the Coast beyond the traditional FOSA and BOSA services. We’ll also be offering Co-op kwa Jirani services, Equity Agency Banking, KCB Mtaani Services and Mpesa Services - Mr. Dickson Okungu ...from previous page
New Mombasa office entrance
leaders of Mombasa branch to keep steering the Sacco to even much higher levels," said Mr. Obudho. He further appealed to the locals to come on board and work with the Sacco, adding that no business can grow in an area without being patronized by the locals. The Vice Chairman also urged the Mombasa populace that they needed not be Hazina members to benefit from the new services offered by the Sacco. “We appeal to the locals to work together with us. Hazina is such a big Sacco that is heading to even higher levels. We are already ranked among the tier one Saccos and our aim is to offer better services and products,” Mr. Obudho said. Mr. Dickson Okungu, the Sacco’s CEO, said the launch was basically meant to activate the Mombasa satellite office into a fully
fledged office offering all and other extra services. “We are activating our Mombasa satellite office because the Board and management of the Sacco have taken note of the bigger interest we have in the coastal region,” Mr. Okungu said. The CEO added that after the breathtaking launch, the society will now be able to serve people from the Coast beyond the traditional FOSA and BOSA services. “We’ll also be offering Co-op kwa Jirani services, Equity Agency Banking, KCB Mtaani Services and Mpesa Services,” he said. Mr Okungu said the Sacco has a focus on Mombasa County because of the number of members from region. “Hazina Sacco currently has a membership in excess of twenty-four thousand and a good part of that membership comes from Mombasa," the CEO explained. He added that the launch was meant to give new life to the Mombasa office and the Sacco at large,
sending a clear message to the locals that apart from the usual and traditional services, Hazina had come with enhanced and improved services and products that are people-centered and relevant to their needs. Mr. Nyang’au Mobibo, the Mombasa Satelitte office Chairman, described the launch as a milestone of how far Hazina Sacco had come. He added that the launch was a clear indication that the Sacco had opened its doors wide open to not only civil servants but also private members, students, the youth and even the business fraternity. He added that they were set to witness tremendous growth after the launch. Mr. Mobibo added that the Sacco’s focus has been to satisfy members’ needs the best way they could and that they feel proud when their members are happy and developing themselves.
JULY, 2022
6 | SACCO REVIEW
Mixed reactions to increased bonuses for tea farmers Though there is a slight reprieve at the announced increase in payouts by upto 20 shillings, farmers have complained that they had been made to believe they would receive at least 90 shillings per kilo. By Staff Reporter Tea farmers across the country will receive increased bonus payments this year compared to what they earned in 2021. In Kirinyaga County, five tea factories registered impressive bonuses of between Shs31 to Shs35.50 per kilo, up from Shs21 last year. Kenya Tea Development Authority (KTDA) Board member John Mithamo attributed the good prices to the rise of the dollar against the shilling and fair bidding of the produce at Mombasa Tea Auction. Mithamo, a director at the Ndima Tea Factory and a member of the KTDA Board, said farmers will get their pay in early July in line with a government’s directive. “There will be no more delays like the previous regime did; hoarding the pay until October or even paid at its own convenience. Farmers need to be respected for their toil and be handed what is rightfully theirs in a timely manner,” he said. Mithamo noted that though Kenya’s dependable markets have regisBy Staff Reporter Savings and Credit Cooperatives Societies (Saccos) have been urged to change the criteria they use to measure their contribution to the country’s economic and social wellbeing. Sacco Societies Regulatory Authority (SASRA) CEO Peter Njuguna noted that the annual performance based on growth of asset base, deposits, share capital and surplus is never enough. Speaking during celebrations to mark Tembo Sacco’s 50th anniversary, Njuguna underscored the vital role Saccos play in Kenya’s economic and social landscape, hence the need to review their performance reporting tools. “Saccos need to change how they report our finance performances since the dividend payout does not give a true measure,” he said. Njuguna said there is a high possibility that a number of properties dotting major towns and villages are as a result of contributions from Saccos. “Saccos have to measure how many billions they have given out to members to create wealth,” he said. Njuguna urged Sacco members to elect good leaders as the Sacco Board members to entrench good governance practices. “Sacco members who put good leaders to office gift themselves good leadership,” he said. He added that successful and sound decisions are behind the stellar performance of the entities, hence the need to have good leaders in office. Njuguna said that by electing good leaders into office, Saccos es-
tered a low tea consumption rate, the dollar exchange at Shs120 boosted the earnings. Much of the farmers produce is still in stores awaiting export. According to the Tea Board of Kenya, earnings from tea exports to Russia declined by Shs598 million in March, as volumes dropped to 686,072 thousand from 2.6 million kilos during the same period last year. Russia is Kenya’s fifth-largest buyer of tea in terms of volumes. Mununga will pay the highest at Shs35.50, followed by Ndima and Kimunye tea factories which tie at Shs34, Thumaita Shs32.50 and Kangaita Shs31. However, small-scale tea farmers from other parts of Mt Kenya expressed frustration with the bonus payout of between Shs35 and Shs40 per kilo announced for their supplies. The farmers said that with the implementation of the new laws in the sector, they expected at least Shs90 per kilogramme this year. The farmers quoted Agriculture CS Peter Munya that the bonus would be the highest since 2016.
Tea pluckers in a tea farm owned by the Keyian Group Ranch in Trans Mara While opening a new tea factory in Nyamira County mid-June, Munya promised that the pay would be the highest since 2016. “This year’s bonus is projected to be the highest across the tea growing counties since 2016,” Munya promised. Farmers and officials from the Kenya Union of Small-scale Tea Owners (KUSTO) complained of being duped to believe there would be a windfall this year.
KUSTO County Secretary Njagi Kinyamu said the Shs36.20 pay per kilogramme that Weru Tea Factory announced was below their expectations. In Meru County, farmers supplying Imenti Tea Factory are likely to get the highest bonuses at Shs41 per kilo, followed by Kinoro Tea Factory (Shs37.10) and Kionyo Tea Factory (Shs36.30). Last year, Weru Tea Factory paid Shs20 per kilo and Shs23 in 2020; the trend signalling better times ahead.
The farmers lamented the increasing cost of production, compelling them to take loans that they are now unable to repay. In April, the 42 KTDA-managed tea factories paid a mini-bonus for green leaves delivered between July 2021 to December 2021, totalling approximately Shs3 billion. The main bonus will be paid in full by July 8 in line with the tea reforms introduced in the Tea Act, 2020. The reforms made provisions for the balance due to the tea grower to be fully remitted within three months of the end of the financial year. This is a departure from the past where farmers received their bonuses in October to coincide with the monthly payments, which happened in the first week of every month as opposed to the 3rd week. Implementation of the Task Force on the Design, Development, and Implementation of the Tea Industry Price Stabilization Framework will be done during the financial year 2022/2023. The report, launched in March, recommends the establishment of a Tea Fund to be used to cushion tea farmers against adverse price shocks and provide input subsidies to smallholder tea farmers. It will also look to support the construction of warehousing facilities at the factory level, promotion of value addition either at the factory level or through the common user facilities, and invest any surplus funds for their sustainability.
SASRA urges Saccos to review growth yardsticks There is a high possibility that a number of properties dotting major towns and villages are as a result of contributions from Saccos. Therefore, the annual performance based on growth of asset base, deposits, share capital and surplus is never enough. sentially regulate themselves. Given the billions of member deposits within their vaults and asset base, societies have been identified as critical players in the country’s development. As a result, the government encouraged them to play a key role in its Big 4 agenda where food security, housing, manufacturing and the universal health are the anchor projects. However, a number of societies might differ with the regulator on the measurement of their role in the society, saying that failure to report on the financial reports is an understatement. With billions at their disposal, which they eventually cash out to members for a return, expectations are usually high on the dividend payout. This is the tale in every Annual General Meeting or Annual Delegates Meeting when anxious members wait for dividend payouts to be announced. Tembo Sacco Chair Peter Kiguru said that failing to announce dividend payout is not justifiable as Sacco uses
Tembo Sacco Board Chair Peter Kiguru (left) has a word with SASRA CEO Peter Njuguna members’ savings to issue loans. Kenya Society of Professional Cooperators (KSPC) argues that competition by Saccos to pay super dividends and interest on deposits is affecting the pace of growth of the cooperative movement. During their meeting in Momba-
sa in May 2022, the lobby led by acting CEO Symon Mburia stated that to maintain the high rates, Saccos will have to raise the cost of services hence become untenable. “The focus of growth has now changed from the member personal growth to organizational profitabili-
ty,” he said. Mburia added that it is worrisome that persons endowed with large amounts of money are getting into Saccos as an investment avenue. The Society noted that some societies offer higher rates of up to 20 per cent, arguing that this is not sustainable and it is self-defeating since Saccos were principally formed to offer credit. It is also alleged that some societies borrow to pay dividends to create an impression that they are making profits when they are not. In the process, the huge loans, which they are not able to service, eat into their balance sheets and consequently undermine their liquidity ratios. The Sacco Supervision Annual Report, 2020, estimated that many Saccos reported an increase in asset base and deposits for the year ending 2020. The same was witnessed in the 2021 financial year. The 2021 figure by Sasra places Saccos as key players in the country’s financial sector.
SACCO REVIEW | 7
JULY, 2022
Advertising Feature By Azael Masese
S
tima Deposit-Taking (DT) Sacco exhibits all the attributes and performance indicators of a successful
institution. Ranked the second wealthiest society by the Sacco Societies Regulatory Authority (SASRA), their end year performances have remained mouthwatering. As at December 31, 2021, the society’s asset base, turnover, loan book and balance sheet portfolios had grown by double digit percentage points. The growth, largely boosted by the implementation of its 2019 -2024 strategic plan in 2020, focuses on key drivers of the strategy which include mobile banking, agency banking and physical branch network, diversification of income streams through strategic partnerships and delivery of alternative business channels such as Shariah banking. During the financial year ended December 31, 2021, its asset base shot to KSh46.8 billion, compared to KSh41 billion reported in 2020. Deposits increased by 9.7 percent from KSh31.19 billion to KSh34.21 billion in 2021, with the loan book hitting KSh36.35 billion in 2021 compared to KSh32.80 billion reported in 2020. Its share capital grew from KSh2.02 billion to KSh2.38 billion while the balance sheet grew by 13 percent from KSh41.06 billion to KSh48 billion. During the period under review, its turnover grew by 16 percent to KSh6.86 billion compared to KSh5.89 billion in 2020. Stima DT Sacco paid out dividends and interests on deposit at the rate of 14 percent and 10.75 percent for the 2021 financial year. Total payout for the two items was KSh2.99 billion in 2021 compared to KSh2.72 billion in 2020. The Sacco achieved surplus for the year of KSh1.43 billion compared to KSh1.03 billion previously. Over the last five years, the Sacco’s membership has increased by 9 percent annually to 154,000 as at December 31, 2021. Statistically, and if all goes as per plan, membership will jump to more than 167,000 to realize increased deposits and loan uptake. The membership of over 154,000 is derived from the energy, utilities, education, services, diaspora, individuals, groups/ Chamas, small and micro enterprises (SMEs), among other sectors. In key fronts, Stima DT Sacco has not disappointed, setting the pace among its peers in unchartered waters. It was the first conventional Sacco
Stima Sacco delegates actively involved in one of their recent Annual Delegates Meetings (ADM)
Stima Sacco: Kenya’s 2nd wealthiest Sacco banking services. The society also took a critical step to become an important partner in the Kenya Mortgage Refinance Corporation to provide long term funding to primary mortgage lenders. The move will consequently boost the country’s efforts of achieving affordable and quality housing as part of the Big 4 Agenda. Its investment arm, Stima Investment Cooperative Society Ltd, has remained at the fore front in enabling families own their dream homes and getting office space made easier. Some of its flagship projects, under the investment arm, include Stima Investment Plaza, Stima Investment
Rebecca Miano, National Chairperson
Gamaliel Hassan, CEO Stima Sacco members in a procession through the streets of Eldoret town to mark the 2015 International Day of Cooperatives
to launch Sharia-compliant product line and the first to introduce instant ATM services. Eager to differentiate its products and services, it was the first to offer cheque transaction services. The Sacco prides itself in being the first deposit-taking Sacco to be licensed by SASRA and holds License Number 1. It was also the first to introduce mobile
Ushirika Day
Tushirikiane, Tujijenge!
Coming together is the beginning, keeping together is progress, working together is success.
Theme: ‘Cooperatives build a better world’ This year marks the 100th celebration of Ushirika Day. SACCO YANGU, MAISHA YANGU For further enquiries please visit the nearest Stima Sacco branch or contact our customer care agents on +254 703 024 000, +254 703 024 024 or send us a message to: customercare@stima-sacco.com or diasporabanking@stima-sacco.com @stimasacco
Stima Sacco Society Limited
Stima Sacco Society Limited
www.stima-sacco.com
WE MAY HAVE WON AWARDS, BUT OUR MEMBERS ARE THE WINNERS The Financial Reporting (FiRe) Awards is the most prestigious and coveted Award in East Africa for financial reporting. The Award is aimed at promoting intergrated reporting through enhancing accountability, transparency and integrity.
JOIN STIMA SACCO TODAY AND BE PART OF OUR SUCCESS. Stima Sacco Society Limited Stima Sacco Society Limited
@StimaSacco www.stima-sacco.com
Plaza II, Stima Village and Stima Mall. In its efforts to diversify revenue streams, enhance its balance sheet and improve its books of accounts, the society started MPawa Insurance Agency to provide its members and staff with covers. Before the agency was established, the society paid millions in form of commissions to other parties. Established in 1974 to serve employees of the then East African Power & Lighting Company, the Sacco’s efforts are geared towards making it a one stop shop and meet all the financial needs of its members. Its seamless salary processing solution dubbed Salo Chap Chap ensures that members receive their salaries, allowances and pension payments in a timely and efficient manner. The Sacco launched its Agency Banking initiative dubbed Stima Sacco Mlangoni to bring services closer to members. This seeks to improve financial inclusion and ensure the Sacco reaches a wider customer base. The initiative will be one of the methods the Sacco will use to extend its branch network in a cost-effective way, via authorized agents in remote areas. In 2022, Stima DT Sacco launched several products and services such as an Omni Channel that encompasses Mobile, Internet and Agency Banking. These are aimed at enabling members access the same service experience as well as the same products across digital channels. Diaspora Remittance Solution will also provide a seamless platform that will enable members in the diaspora send monies to the Sacco with automated and hassle-free forex conversions.
Call us on 0703 024 024 or Email info@stima-sacco.com for more information.
JULY, 2022
8 | SACCO REVIEW
Imarika Sacco launches Plaza, new Strategic Plan
Sacco Chairman, Mr. Renson Ndoro, delivering his speech during the event
The Chairman said the new Strategic Plan has a clear focus on members and is designed to ensure that they are socioeconomically uplifted. “The plan also focuses on growing membership and offering better services to members and the general public through the use of modern technology as the major driver of operations in the contemporary setting,” he said. He expressed his pride in the Sacco’s achievements. The Sacco has an active membership of 140,000 and total asset base of KSh10.6 billion. The launch of the plaza and Strategic Plan come at a time the society has registered impressive growth. It has 8 branches in the Coastal region: the headquarters in Kilifi and other branches in Malindi, Mtwapa, Mariakani,
Garsen, Ukunda, Bamba and Mombasa. Mr Ndoro said the Sacco’s achievements are as a result of the support of members and other partners. “We started computerizing our operations at a time other Saccos were still on manual record-keeping,” he said. In 2015, Imarika Sacco started the Imarika Foundation, which majorly focuses on five pillars: Education, Health, Agri-Business, Disaster Management and Environment. “The formation of the foundation has enabled us plough back to the society,” he said. He asked members to participate in national development through exercising their democratic rights by voting and maintaining peace and order in the coming general elections. Sacco CEO Mr. George Yongo Ngala said Imarika Plaza is one iconic building in Kilifi town with 10 floors, including two basements for parking. “The plaza was funded by members’ contributions. It has a conference hall and
of the Kenya Mortgage Refinance Company (KMRC). “The objective of this strategic partnership is to provide long term funds to primary mortgage lenders,” he said. Primary mortgage lenders include Saccos, banks, and micro finance institutions.. The CEO also disclosed that the Sacco had partnered with Cooperative Bank to offer instant ATM Card processing services that allows members to get new Visabranded Sacco link ATM cards instantly. He further revealed that the Sacco recently introduced Sacco Agency, which is in the pilot stage and will be rolled out soon. Principal Secretary in the State Department of Co-operatives Development Mr. Ali Noor Ismail, the chief guest, lauded Imarika Sacco for recording remarkable growth. He commended the Sacco
members for their selflessness towards the establishment of the plaza. “This member funded project is now a reality. The launch of this plaza marks a great milestone for the Sacco,” he said. He added that the modern and
By Tsozungu Kombe
I
marika Sacco, one of the best performing Saccos in Kenya, recently launched Imarika Plaza as well as the 2022-2026 Strategic
Plan. Speaking during the launch of the plaza, Imarika Sacco Board of Directors Chairman Mr. Renson Ndoro said the new plaza will go a long way in helping the Sacco give better services to esteemed members and the general public by ensuring that members are able to easily access products and services. “It will also provide revenue for the Sacco through renting out the remaining spaces,” he said Mr. Ndoro praised the Sacco founder members and the former Board of Directors for their vision and direction towards the Sacco’s objectives. He asked potential tenants from the Coast to engage the Sacco for the opportunity to work in one of the most comfortable and secure premises in the region; Imarika Plaza in Kilifi County.
Sacco CEO Mr. George Yongo making his remarks
Cont. next page...
PS State Department of Cooperatives Ali Noor Ismail unveils the commemorative plaque of Imarika Plaza in Kilifi town Photo/George Otieno
The imposing Imarika Plaza which was officially launched recently. The completion of the building is a major milestone for Imarika Sacco, one of the fastest growing Saccos in the country
a gym,” he proudly revealed. He added that the construction work was started in July 2017 and completed in 2021. Mr. Ngala stated that the new plaza is envisaged to not only enable the Sacco offer improved services but also serve as a platform for an alternative income stream for the Sacco. He revealed that the Sacco’s 20222026 Strategic Plan aims to transform the lives of the Sacco members socially and economically. “We seek to add value to our esteemed members by growing their saving deposits to KSh15.8 billion by 2026 and the loan portfolio as well,” he said He added that the plan also provides for Corporate Social Responsibility (CSR) in keeping with the seventh principle of the cooperative movement. “This will be achieved through our Imarika Foundation,” Mr. Ngala disclosed. He said that the Sacco is a member
The plan also focuses on growing membership and offering better services to members and the general public through the use of modern technology as the major driver of operations in the contemporary setting. - Chairman
Imarika Sacco Chairman Renson Ndoro with CAK CEO Daniel Marube helping the PS State Department of Cooperatives Ali Noor Ismail cut the cake to mark the official opening of the Imarika Plaza recently
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Fabulous growth that culminated in classy tower Cont. from previous page... strategically-located Imarika Plaza will offer similar services as the headquarters. Mr. Ismail pointed out that Imarika Sacco is among the Saccos with motives to improve the experience and lives of their members. He urged Cooperatives to be vigilant and swift to dictate challenges that befall the cooperative sub-sector, particularly those arising from technology. The PS further challenged cooperatives to invest heavily in education and training so as to enhance members’ understanding of the principles of personal finance. “Cooperatives are formed with the aim of promoting members’ social and economic welfare. They are the easiest and effective avenues of unlocking economic opportunities,” he added. Mr. Ismail disclosed that his department was concerned about how cooperatives operate, adding that they will enhance registration and supervision of Saccos to ensure stability. “The State Department of Cooperatives is committed to the formation of all relevant policies that
will grow the Co-operative movement to the next level. The trend is intended to promote sustainable competition among cooperatives and bring the desired impact of industrialization and better socioeconomic development,” the PS noted. He added that the economic environment keeps changing and the policy reviews must be in line with the changing times. Cooperative Alliance of Kenya (CAK) Chief Executive Officer Mr. Daniel Marube asked Saccos in the country to exercise a high degree of good leadership and governance in a bid to retain members. He further asked Saccos to ensure that members are properly educated for prosperity and stability. Kilifi County Executive Committee Member (CECM) for Cooperatives Ms. Nahida Mohammed praised Imarika Sacco for realizing great milestones. She promised that the county government will continue to play its role of promoting and enhancing the growth of Cooperatives as an appreciation for what Saccos do in enhancing financial inclusion. Former Imarika Sacco CEO Mr. Daniel Masha praised the Board of Directors, management and members
PS State Department of Co-operatives Ali Noor Ismail and Sacco Chairman Renson Ndoro dancing to a tune from entertainers
OPINION
for ensuring that the construction of the magnificent Imarika Plaza is completed. He asked all stakeholders to work as a team to push the Sacco to next level of development. Former Kenya National Union of Teachers (KNUT) Secretary General Mr. Lawrence Kahindi Majali lauded the giant Sacco for recording steady growth. “The sole objective of the formation of Saccos is to enable members save, get loans and accomplish their personal development goals,” he said. He urged Coast residents to be focused on financial freedom by joining the vibrant Imarika Sacco and investing heavily to get bigger loans at the end of their transaction periods. “The cooperative movement plays a vital role of uplifting standards of living,”
An usher serves a cake to CAK CEO Mr Daniel Marube. At the centre is PS State Department of Cooperatives Ali Noor Ismail
he pointed out. Kilifi North MP Mr. Owen Baya praised Imarika Sacco for its sterling performance, adding that the financial body had transformed the lives of many people across the Coastal region. He urged the Sacco top officials to be transparent and accountable while discharging their daily duties in order to win trust from the people they serve. He also asked Kilifi County residents to come forward and join Imarika Sacco in large numbers to save and secure loans for personal development projects. Imarika Sacco was started in 1974 with only 200 members. The founder members united to form the Sacco with the main objective of uplifting their living standards since their monthly wages were not sufficient to accomplish their personal development goals. The Sacco opened its Common Bond in 1998. It rebranded from Kilifi Teachers Sacco to Imarika Sacco to allow nonteachers from the Coastal region to join the Sacco.
We are happy to be part of the
Ushirika Day
celebrations
The Ins & Outs of public speaking Q &A sessions
M
ost often, the art of public speaking involves two pertinent parts: the formal presentation and the Question-Answer (Q and A) session. In a book titled Stand Deliver, Dale Carnegie training dream team posits that Q and A time is both a challenge and an opportunity. It is during this special segment that the speaker can hammer the key points as the listeners bring any resistance out into the open. The downside of this Q & A session is that some questions can be difficult to answer. This can happen if the presenter is illprepared. Every Q and A period should begin with the speaker setting the
time limit. Clearly communicating how much time will be allocated for Q and A helps you to keep the questions short and to the point. It also helps you give answers that are spot on. Q and A sessions evaluate a speaker’s ability to interact one on one with the audience. Since one cannot always predict what they will be asked, they should prepare properly for this special session. A good place to start is by legging up your listening skills. In the whole scheme of things, you cannot answer a question aptly if you have not heard it correctly. As you receive the questions from the audience, never interrupt people. Listen to the whole content of the question to enable you give
Victor Ochieng’ The Writer rolls out Public Speaking Training Services. vochieng.90@gmail.com. 0704420232
cogent responses. Eye contact is also important during the Q and A session. When somebody speaks up, give your full attention to the question. Pause for thought before answering questions. When you start responding to the question, break eye contact with the one who has asked it and address the audience as a whole. Each time you answer a question, always finish your answer by asking whether your response was sufficient. Don’t compel people to ask questions quickly. Do not evaluate questions by saying things like ‘that was a good question’. Try to keep your answers straight to the point. If you are using Power-Point
Presentation, avoid turning off the projector or the computer because you will just have to turn it on again and wait while it boots up. Leaving a dazzling white screen or blank black slide is uninteresting and a glaring distraction. Some experienced speakers save the conclusion of their presentations until after the Q and A session to enable control of exactly when their time in front of the audience will end. To make this happen, you might just say, “Before I make some concluding remarks, who has a question to ask?” After you have spent ample time in Q and A segment, wade into your conclusion. In this way, you can end on a positive, proactive note. Finish by thanking the audience for their attention.
JULY, 2022
10 | SACCO REVIEW
EDITORIAL Restructure Saccos to accept non-core members compete for elective posts Over the years, Kenya’s Savings and Credit Cooperatives Societies (Saccos) sub-sector has taken remarkable steps to deepen financial inclusion. With an asset base, deposits and loans running into hundreds of billions, its role in accelerating the country’s social and economic development cannot be gainsaid. To keep pace, Saccos, in consultation with the government, thought it prudent to rebrand and open the Common Bond, apparently to allow certain segments of the society join and be part of the movement. However, one issue that has posed a serious challenge is the decision by some Saccos to lock out non-core members from vying for elective positions as spelt out in the bylaws. For some Saccos, only members from their original catchment can be elected to the Board, even after rebranding and allowing other segments of the society to join. To run in tandem with the reforms being undertaken and the changes witnessed in the vibrant sub-sector, there is a compelling need to relook into the standoff with a view of having a policy in place for proper guidance across board. Consequently, SASRA as the regulator, State Department for Co-operatives and other stakeholders have an enormous task to stake a new way of thinking to allow all members take part in the decision making processes of their Saccos. The less rigid segments are unique in how they make it in their fields and this can be tapped for the good of the societies. Nobody can claim to have the monopoly of ideas on how to manage Saccos. It is therefore necessary to have all members participate in the decision making processes. Locking out some members, to the critical and accommodating mind, amounts to discrimination and an attempt to curtail good governance practices, which in effect undermines the growth of these financial institutions. As the country marks the 100th Ushirika Day, there is no better gift to offer Saccos than the opportunity to vie for Board membership positions regardless of their origin. Doing so is a sign of having progressive mindsets within the cooperative movement in pursuit of innovative ways to take the sub-sector to the next level. This requires forward thinking individuals within the sector who are determined to have a blend of ideas, beliefs and thought processes. Just as the Saccos value the billions in savings from what might be considered as non-core membership, let their contribution in ideas be appreciated. Grumbling voices in the sub-sector on issues that touch on good governance will compromise the brilliant ideals the sub-sector needs to march forward. There is no better time than this to address the issues in a sober and progressive manner so that every member’s views and ideas are accomodated to chart a new and better path for the country’s prosperity.
SACCO REVIEW
Website: www.saccoreview.co.ke
Chief Executive Officer: Peter Silsil Editor: Rosemil Oduor Revise Editor: Kipkemboi Toroitich Supplements Editor: Azael Masese Layout & Design: Gabriel Sankale & Sydney Kimiywi Distribution: Daniel Maganya
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OPINION Why Saccos should institutionalize good corporate governance
G
ood corporate governance is a system by which an organization is directed, controlled and held accountable by its shareholders and stakeholders. In this case, good corporate governance goes beyond compliance with basic legal requirements. It provides a framework on which a culture of business integrity, accountability and standardized best business practices are established. The Sacco governance structure consists of Annual General Meeting (AGM), Board, Supervisory Committee, Audit Committee, other Board committees, managers and staff. Although governance remains a collective responsibility for all organs of an organization's structure, it is a different case in Savings and Credit Co-operative Societies (Saccos). Here the responsibility lies with the Board of Directors. The Boards by design are accountable to the shareholders, whom they must engage and report to regularly. However, lack of good corporate governance and competent leadership translates to conflict of interest among officials and a vicious cycle of leadership wrangles. In such a situation, officials will use their positions of power and plot to extend their term of office as a conduit to swindle members' funds and enrich themselves, hence failing on the fiduciary duty they are entrusted with by the members. Good corporate governance is par-
Ben Oroko The writer is a communication practitioner and correspondent based in Kisii. benoroko2000@yahoo.com amount as it reflects on the co-operative movement’s principles and values. The quest for visionary, competent, dynamic and professional leadership remains in the shadows owing to the nature of Sacco’s business operations, ownership, purpose, principles and values under which they were founded. It is important that Saccos ensure they have in place good corporate governance structures that will enhance effective and efficient operations to cultivate a culture of transparency, accountability, profitability and growth. For these institutions to achieve
the objective, they should have a clear understanding of the various governance structures. They should be awake to the rationale behind separation of powers, duties and responsibilities. The Board of Directors acts as the principal organ charged with reporting to members the progress of their institution. The directors are elected by members during an Annual General Meeting, during which they constitute committees which include but not limited to credit/loans, supervisory and audit committees. It is imperative to note that the future business growth and sustainability of Saccos is gauged against the different organs’ governance practices. Their checks and balances ensure members' interests are protected. Good governance is an indicator of the Sacco going beyond the regulator's minimum compliance requirements. Best practices must be maintained to reflect strong business ethics and ensure consistent communication among the society's governance organs. They also ensure corporate discipline is promoted in which the Board and management make impartial business decisions in the best interest of their members. Weak co-operative leadership and governance structures antagonize employees and members, leading to low productivity, high costs of business operations, apathy, low morale, inefficiency and resistance to change in the organization.
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OPINION
JULY, 2022
Digital revolution in Saccos must reflect customer experience
T
he coronavirus pandemic has induced a shift in cooperatives’ needs that will disrupt the movement ecosystem. As the world grapples with the pandemic, Savings and Credit Co-operative Society (Saccos) businesses have to reposition themselves to align with the demands of the “new normal”. Prioritizing good governance, digitalizing Saccos, and maintaining excellent and quality service delivery will unlock their potential in the post-Covid-19 era. Saccos must look beyond the pandemic and use this crisis as a basis to reimagine their role in the new reality. They must continue to focus on members’ needs to help them recover from the impact of Covid-19. Equally, Saccos must adapt their operating models to drive efficiency and resilience. Risk management
thresholds need to be reflective of broader economic changes, and greater attention must be given to more challenged member segments. Moreover, the cooperative sector continues to fill an enormous credit gap: offering forbearance and giving members greater access to loan facilities. Today, many Saccos are experiencing a growing tension between supporting their members and increased concerns about the rise in non-performing loans (NPL), which will lead to capital depletion. While joint action with governments and regulators is likely to be required to address the immediate NPL overhang, the repercussions for businesses and individuals are expected to be longer lasting. Looking ahead, there are three areas of focus that will reshape the sector and support a stronger re-
David Kipkorir The writer is an editor, writer and author.
covery: serving customers better, through the right channels, with dynamic and relevant products and services, adapting to new ways of working, and building more resilient and agile organizations. To help members and businesses recover from the economic impact of Covid-19 means helping them focus on productive economic activity. These institutions must be a seamless enabler of that activity. This means
enabling members and businesses to manage their financial needs in the right way. Increasingly, that means digitally. Saccos for long have tried to drive digital adoption due to its benefits. Some markets have shown greater success than others. The closure of branches and offices in the wake of Covid-19 has forced a shift to digital services, from account opening to loan applications. Processes demanding physical signatures now allow digital signing. Importantly, members have adapted well to these changes. The question for Saccos is how to keep their members on digital platforms after the Covid-19 pandemic and how to achieve the human touch and a greater personalized service through digital channels. There are two considerations in driving and sustaining the adoption of
digital lending. One is the member experience and need for human interaction; the other is digital access and literacy. They need to shadow the evolution of the online e-commerce giants that have now built out entire connected ecosystem experiences and value propositions. To create this, Saccos need a sophisticated understanding of their members’ context and needs. Saccos now have an opportunity, as they enhance their digital capabilities to adapt during this crisis, to systematically collect relevant data and create connected experiences. This will provide a more personalized and intuitive relationship through all channels. Overall, however, reduced customer demand for physical channels is likely, and Saccos should look for opportunities to release or repurpose real estate where there may be an over-concentration. Saccos will need to reshape their products and services by providing a consolidated offering to meet shifting member expectations.
FEEDBACK COLUMN Competition among Saccos healthy I read with profound curiosity your article titled ‘Competition for payment of super dividends risky for cooperative movement (Sacco Review, June, 2022)’. The piece, which documented how Saccos generously doled out ‘super’ dividends and interest on deposits, was a manifestation of your zeal and passion for cooperative issues as they arise. Overally, the article presupposes unrealistic lengths high achieving Saccos – real or imagined – go through to reward, maintain and attract memberships.
While agreeing with the dangers such acts present, I beg to differ with the generalised narrative attributable to overrated performance and reward to members. Barringspecificcases,Ibelieve respectiveBoardshavegenuine responsibility of safeguarding members’investments,without necessarily skewing facts and statistics. Whichever way one looks at it, I am persuaded that measured competition may not necessarily be bad, after all. Ken Ogada Nakuru
Fast track new coop policy to tap fresh opportunities within EAC The recent formal entry of the Democratic Republic of Congo (DRC) into the East Africa Community (EAC) may not have happened at a better time. With the enhanced shared benefits now ripe to harness EAC member countries’ comparative strengths even further, the Kenya Government’s policy makers in the all-important co-operative sector have their work well cut out. With people-to-people ties standingtobestrengthenedeven better, thanks to the improved free movement of people, goods
and services to boost trade, it is imperative for the government to fast track the new cooperative policytoallowSaccosexpandinto the neighbouring markets. This is especially after the opening up of the Common Bond and rebranding that opened up huge potential, with Saccos able to expand across the country unhindered. With this, Saccos in Kenya now have enough teeth to raid neighbouring countries and, as expected, lead from the front in harnessing the cooperative business in the region. Felix Mwashumbe Voi
The Editor welcomes short and precise articles for publishing on this column. Send your observations to; Saccoreview@shrendpublishers.co.ke
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
12 | SACCO REVIEW
JULY, 2022
Saving mindset lifts Mombasa Port Sacco to fiscal glory The Board of Directors, Management and Staff of Mombasa Port Sacco are delighted to be associated with the 100th International Cooperatives Day celebrations on July 2, 2022 whose theme is; Co-operatives Build a Better World, as we mark milestones in the Co-operatives movement.
Happy Ushirika Day
focus on the tremendous achievements made, notably for the last five years. A quick comparative look reveals a steady growth that has been registered over that period, catapulting it to one of the best managed societies in the country, especially in capitalization. Three critical market segments point to a society whose growth is always on the upward trajectory, reporting a double digit percentage score. For example, the financial statements between 2016 and 2021 indicate its total Mr Alfred Konde Jaka, Chairman
By Azael Masese
M
o m b a s a Port Sacco is arguably one of Kenya’s oldest Savings and Credit Cooperative Societies (Saccos) that mobilises funds and extends affordable credit to its more than 7,500 members. As the members, Board and management commemorate the 100th Ushirika Day, the Sacco will
A delegate making a point during a past ADM
Due to its outstanding performance and contribution to the social and economic well-being of the community, the society has scooped numerous awards at the regional and national stages.
deposits and savings rose from the lows of about KSh1.9 million to stand at an average of KSh4.0 billion, representing a 110 per cent rise. The same phenomenal growth was witnessed on its total asset base, which rose from about KSh3.87 billion five years ago. By December 31, 2021, it had notched a record KSh7.41 billion, a stunning 91 percent jump. Another key market portfolio that reported impressive growth was loans and advances, which jumped to KSh4.3 billion as at December CEO Mr Dedan Ondieki addressing 31, 2021 compared to members during the Sacco Annual Delegates Meeting KSh2.7billion as at December 31, 2016 - a 59 per cent rise. Mombasa Port is a Tier sole businesses, and from 1 licensed deposit-taking people in the diaspora. Its Corporate Social Sacco regulated by the Sacco (CSR) Society Regulatory Authority Responsibility activities have the hearts and (SASRA). The Sacco was founded minds of many, transforming in 1966 by employees of the their social and economic then East African Harbours status in areas such as environmental & Railways Corporation, it education, opened its Common Bond protection, provision of clean in 2010 and now has diverse water and sanitation. As part of its diversification membership coming from salaried and non-salaried efforts, the society launched individuals, investment groups (Chamas), corporates, Cont next page...
Sacco CEO Dedan Ondieki ( left) ,Mombasa County Co-op Director Nelson Nyoro (second left),Mombasa County CEC Agriculture Tandai Lewa (centre) welcome George Ototo, Managing Director, KUSCCO( right) for the ADM
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
JULY, 2022
SACCO REVIEW | 13
Sacco targets share capital of Shs1 billion by 2023 from previous page... the Mombasa Port Housing Cooperative Society. Registered in 2021, the housing arm of the society seeks to explore avenues to ensure its members venture into the housing and real X | SACCO REVIEW estate business. Affordable housing is part
of the government’s Big Four agenda and the subsidiary company aims at enabling its members own not only affordable, but also quality housing. Due to its outstanding performance and contribution to the social and economic well-being of the community, the society has scooped numerous awards at the regional and
national stages. It was recognized as the best capitalized Sacco in the country, best Sacco in capitalization, and first position in the category of Tier 1 employer-based Saccos. In addition, it was also recognized as the one of the most efficient employerbased Tier 1 Sacco, where it emerged second in the
whole country and as the best managed. To enhance its financial stability, the society is targeting to raise a share capital of Shs1 billion by 2023, up from the current Shs283 million and improve its liquidity ratios. To enable members transact businesses from the comfort of their offices or homes, the society’s mobile
banking platform, M-Sacco, provides the perfect solution. Through M-Sacco, one is able to do cash deposits and withdrawals, make instant loan requests, know their loan status and repayments, access mini-statement, pay their bills and transfer funds. Its Front Office Services Activity JANUARY, (FOSA) offers 2020 FOSA savings products.
MOMBASA PORT SACCO U
s
h
i
r
i
k
a
MOTTO:
VISION
MISION STATEMENT
CORE VALUES
Ushirika kwa manufaa ya wote[cooperation for the benefit of all
To be a global financial institution providing competitive financial solution
To strengthen social economic well-being of our customers through prudent management and innovative products and services
♦ Excellent customer care ♦ Creativity and innovation ♦ Integrity and transparency ♦ Corporate social responsibility ♦ Team work
LoaN PRoDUcTs SACCO PRODUCTS AND SERVICES
BACK OFICE SERVICE ACTIVITY (BOSA) SAVINGS PRODUCTS JIENDELEZE LOAN
BACK OFFICE SERVICE
SCHOOL FEES
Issued upto three (3) times a member's deposits/ SERVICES ACCOUNTS contributions upon qualification Do you have plans for any Repayable in 12 months. OFFERED Processed and disbursed on request.
Guarantors/collateral required. Issued upto four (4) times a member's deposits/ contributions upon qualification S Repayable in 84 months. Processed and disbursed on demand.
MASAA LOAN
BIG Project?
♦ Savings accounts ♦ Business accounts for business people ♦ Group accounts for groups ♦ of Special savings account Invoice of your dream asset from the supplier Processed and disbursed on demand. Masaa Loan like holiday account for future travel choice. NORMAL LOAN Fully filled loan application form. and leisure School Fees Loans Friendly interest rates. Guarantors/collateral required. ♦ Fixed Deposit Accounts ACCOUNTS OPENNING Business Loans Repayable in 36 monhs. Issued upto three (3) times a member's deposits/ with interest between 7.5% to Fosa Jumbo Loan REQUIREMENTS The asset financed acts as collateral. 12.5% contributions upon qualification Faster loan processing. Repayable in 60 months. Fosa Normal Loan ♦ Children accounts for The Society fiances 75% of the required amount. Processed and disbursed on demand. ♦ I.D copy members with children Fosa Emergency Loan Guarantors or additional collateral may be required. ♦ Pasport ADDITIONAL LOAN Copy of National ID & PIN. Salary Advance It is a top up loan for hose with Normal Loan ♦ K.R.A PIN Certificate ombasa port sacco Fosa Prestige ♦ Referees BIASHARA LOAN Guarantors/collateral required. ♦ Guarantors. Guarantors/collateral This is an emergency loan top up. FINANCIAL ADVICE MEGALoan LOAN Mega Repayable in 12 months. M-BANKING SERVICES Guarantors/collateral required. Normal Loan Processed and disbursed on request. MONEY TRANSFERS Issued upto four (4) times a member's deposits/ Additional M-PESA SERVICES contributions uponLoan qualification ASSET FINANCE LOAN Repayable in 72 months. CHEQUE CLEARANCE Emergency Loan
Come to us. We have the right product for you.
JIENDELEZE LOAN
required. Issued upto four times a member's upon qualification Mombasa Sacco Limited P.O.Box 95372,Mwakilingo St, deposits +254 725 238367(Mobile) EMERGENCYPort LOAN Repayable in 84months. Moi Avenue Mombasa Mombasa,Kenya 041-220124/2222786(Landline) Issued upto three (3) times a member's deposits/ contributions upon qualification Processed and disbursed on demand. Repayablemombasaportsacco@rocketmail.com/ in 12 months. info@msaportsacco.co.ke / marketing@msaportsacco.co.ke Processed and disbursed on request. Fosa Ordinary Biashara Loan
Issued upto three (3) times a member's deposits/ contributions upon qualification Repayable in 60 months. Processed and disbursed on demand.
The product is tailored for our business members. The businesses should be registered and having operated for at least two years. 12 months bank statement needed for those banking elsewhere (proceeds to be channeled to the society after loan disbursement) Fully filled loan application form with guarantors/ collateral is required. Friendly interest rates. Repayable in 36 months.
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
14 | SACCO REVIEW
JULY 2022
THEME: COOPERATIVES BUILD A BETTER WORLD The Board of Directors, Management and Staff of Mentor Sacco are pleased to be associated with the 100th International Cooperatives Day celebrations on July 2, 2022, whose theme is; Cooperatives Build a Better World, as we mark milestones in the Co-operatives movement. Happy Ushirika Day
Mentor Sacco focuses on educating members on financial literacy
Sacco Headquarters in Murang’a town
M
By Azael Masese entor Sacco is slowly cementing its position as a key player in Kenya’s vibrant cooperative movement. Founded in Murang’a in 1977, the society has remained Joyce Ndegwa, true to its motto “Adding Value Sacco CEO to Life.” Even as the country gears up to the 100th International Cooperative Day, locally known as ‘Ushirika Day’, Board Chair Anthony Kamau says they have only scratched the surface. Founded with only 500 teachers from the then Murang’a District, the society farming and other businesses. currently boasts of more than “We set aside days to conduct 25,000 members. The Chair opines that turnaround education and training as our priority time in advancing loans has been im- as we get feedback such as on loans and rates,” he says. pressive. The Chair is optimistic that the He proudly says their biggest satisfaction is when they advance use of technology can enable them penetrate every part of the country, loans in less than 48 hours. “We also increased the develop- but remains open to the brick and ment loan repayment period to 96 mortar presence. With a few teachers meeting in a months,” he added. He says their main goal is aimed rental space, the society has gone to at improving the Sacco’s econom- open branches in Murang’a, Kenol, ic standing, notably investments in Thika, Ngara in Nairobi, and satellite
offices in Kangema, Ithanga, Kandara, Kangari, and Kiria-ini. The Sacco CEO Joyce Ndegwa expressed optimism that as teachers are mentors to learners, they are ready to mentor a financially productive and stable community. She said doing so will enable their members to have an attachment with the society economically and socially. Formerly Murang’a Teachers Sacco, the Sacco opened its Common Bond in 1996 to accommodate members from other government ministries and departments. In 2011, it rebranded to accommodate any other legally recognized Kenyans, as the former name sounded restrictive. The most unique thing about Mentor, Ndegwa says, is their urge to achieve their objective of adding value to the lives of their members. “We always make sure we offer a platform of investment and give back a good return in form of rebates, interests and dividend,” Ndegwa states. The Sacco’s products are tailored to meet the needs of the members. These include an excellent and robust IT network that uses its media platform to constantly educate its members on the need to observe financial prudence. In one of its Facebook posts, it quotes Benjamin Franklin: “Beware of small expenses; a small leak will sink a great ship.” The society has built a well-coordinated regional and zonal presence where it is able to recruit more members to improve on its deposit base, as well as share capital. With a vibrant marketing team, it also conducts personal visits and frequent communication to create a bond with its members and ensure there is immediate feedback in place. To remain competitive, Mentor Sacco has developed new products and services such as Mavuno
Continued next page...
Our biggest satisfaction is when we are able to advance loans in
48 hours
Anthony Kamau, Sacco chairman
About us • • • • •
Founded in Murang’a in 1977 Formerly Murang’a Teachers Sacco Opened common bond in 1996 Membership at 25,000 Members from TSC, civil servants, BOG/PTA, business and employed people Branches in Murang’a, Kenol, Thika, Ngara in Nairobi Satellite offices in Kangema, Ithanga, Kandara, Kangari, and Kiria-ini.
• •
Mentor Sacco at a glance • • • • • • • • •
Asset base-Sh10.31 billion Loan book-Sh7.34 billion Loans and advances-Sh7.2 billion Income Sh1.32 billion More than 67 per cent mobile banking transactions. Dividend payout-15% -nterest on non-withdrawable deposits-12% Development loan repayment-96 months. Quick fix mobile loan increased-Sh60, 000.
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
JULY, 2022
SACCO REVIEW | 15
Diverse products have kept Sacco ahead of the pack ...from previous page advance, which used to be granted every December, but this was reviewed and members can access it in October.
It has almost increased its quick fix mobile loan to KSh60,000, and its repayment period fixed at six months; strategies that saw it post impressive results during the financial year
Board of Directors
Members of the Sacco follow proceedings at a previous ADM held at Murang’a Sports Club in Murang’a town
ending December 31, 2021. Its loan book increased to KSh7.34 billion at the close of 2021 compared to KSh6.58 billion reported in 2020. It registered 4,517 new members in 2021 compared to 3,327 recruited the previous year. The amount of loans and advances rose to KSh7.2 billion during the 2021 financial year compared to KSh5.06 billion in the previous period, a 42 percent jump. The Sacco’s assets rose from
Shs8.91 billion posted in 2020 to stand at KSh10.31 billion in 2021, a 17 percentage growth. Due to its impressive credit management operations, Sacco non-performing ratios declined from 2.73 per cent to 1.95 per cent reported in 2021. Its income improved by 11 percent to stand at KSh1.32 billion during the year under review. The Sacco’s investment in mobile banking saw 67 per cent of the transactions carried out through the
MENTOR *276*1# *276#
The easiest way to bank
Head Office, Muranga Town – Uhuru Highway Street. PO Box 789-10200, Tel: 020-3580167; 0739-745220; 0704-066827 info@mentorsacco.co.ke Website: www.mentorsacco.co.ke
avenue, a shift from the traditional brick and mortar model which is time consuming. Members approved a 15 percent dividend payout and a 12 percent interest on non-withdrawable deposits for the period ending December 31, 2021. The society has not borrowed externally to meet any budget deficit in the last two years, a further indication of their financial stability.
TO PAY OTHER MPESA NUMBER Allows you to transfer money from your account direct to another person’s MPesa. The other person doesn’t necessarily need to be a member of Mentor Sacco. Dial *276*1#
Select (5) pay other Mpesa
FOR FUNDS TRAN FOR Number FUNDS TRANSFER Enter recipient Phone
Or Or to Enter Amount Allows a member to internally money Allows a member to internally transfer moneytransfer to niSelect Kwetu Enter PIN Select any of his/her accounts i.e. Loans savings or (3) to Pay Another any of his/her accounts i.e. Loans or savings or orHapa EnterNur Enter recipient Phone any other Members account. any other Members account. Enter Amount Enter A TO WITHDRAWAL CASH Dial *276*1# Dial *276*1# Enter P Enter PIN Select (6) FundsTO Transfer Transfer BUY AIRTIME Or Select (4) to PayOrAnoth Allows one to withdraw cash Select from (6) Funds Sele Select (2) Transfer to Any own MPA Enter recipient Phone Select (2) Transfer to Any own MPA Enter Nure your account direct to your Mpesa Allows a member airtimetypeEnter A Account type to purchase Safaricom Enter Account Enter type Enter Account to their phones or any other personsEnter phone Amount Enter A Amount Enter Amount Enter Dial *276*1# Enter P Enter PIN Enter PIN Enter PIN Select (1) Cash Withdrawal Dial *276*1# TO CHECK GUARANTORS & GUARANTEES
Enter Amount
Up to 15% Annual dividends and loan is written off. Next of kin benefits with double your shares in case of death
Allows to check on your guarantors Enteryou PIN and those you have guaranteed. Hapa ni Kwetu Dial *276*1# Select (1) for Guarantors TOEnter PAYPIN FOR GOODS & SERVICES Select (2) for Guarantees AllowsEnter one PIN to pay for goods and services
Buy TOairtime PAY BILLS Own Phone/ other Phone Allows a member pay any paybill and transfer Enter to Amount to another bank Enter account PIN
Dial *276*1#TO CHECK BALANCE Hapa ni Kwetu Select (8) Payone Billsto check account Allows Select (1) Pay any paybill via till number current Savings and Loan balances Hapa ni Kwetu Enter Paybill number Dial *276*1# Dial *276*1# Enter account number Head Office, Mentor House, Uhuru Highway P.O Box 789-10200 Murang’a. Tel: 020-3580167 0739-745220 Select (4) pay for goods & Services Select (2) My Balances Enter www.mentorsacco.co.ke amount 0704-066827 | +254 111 026 000 21874 info@mentorsacco.co.ke Website: Enter Till Number Hapa ni Kwetu Select (1) - for Savings Balances Enter PIN Enter Amount Enter PIN Enter PIN Select (2) for Loan Balances Hapa ni Kwetu Hapa ni Kwetu
JULY, 2022
16 | SACCO REVIEW
ESATERN
Uncertainty as Meru leaders differ on licencing miraa trade By John Majau
Meru Governor Kiraitu Murungi has opposed new regulations by Agriculture Cabinet Secretary (CS) Peter Munya on khat farming and trading. The regulations aim at streamlining the produce, commonly known as miraa, for standardization and acceptance in international markets. The governor said he was not consulted before the regulations were laid down. He spoke at Kaaga Primary School in Meru town when he met farmers during a consultation with Meru County Governor Kiraitu cooperatives across the county. "We know that agriculture is de- Murungi volved; they should have consulted me as the governor," Kiraitu said. The governor said the many licencHe said the regulations will do more es required will cut farmers profits and harm than good to miraa farmers and hence are unacceptable. traders. He even threatened to seek court ar“You must have a licence if you have bitration to reverse the regulations. a miraa nursery. To grow miraa you must He, however, lauded the national have a licence. To sell miraa you must be government for solving the diplomatlicensed as a trader. To export miraa you ic row with Somalia in a bid to ensure must also be licensed as an exporter," miraa is sold in the Horn of Africa. Kiraitu lamented.
The county boss urged the national government to speed up the bilateral agreement so that the crop can have the biggest market since the ban in United Kingdom. Kenya is close to unlocking the Somalia market with an agreement expected to be signed early July. Munya said discussions between the two countries have entered the home stretch with a deal expected in two weeks. “The agreement will be signed in Nairobi on July 5,” he said. County Assembly Minority Leader Ayub Bundi said Kiraitu is against the regulations so that miraa farmers do not benefit. Bundi, who is also the Abothuguchi Central MCA, said opposing such regulations might hinder the sale of miraa in Somalia. "He is against the regulations so that miraa farmers fail to sell their produce in Somalia and Munya would be deemed to have failed," he said. The regulations were published last week after approval by the Kenya Bureau of Standards.
Matungulu coffee farmers identify MP aspirant to champion their interests By Agnes Orang'o
Coffee farmers in Matungulu Sub-county of Machakos County have named their preferred parliamentary aspirant. In a meeting with Maendeleo Chapchap aspirant Jimmy Mwithi, the over 1,000 farmers noted that they want a leader who will revive the dying coffee sector in the constituency. Led by one James Mwovi, they explained that after listening to Mwithi, they liked his agenda and plan for the people. Mwovi, who is the chairman of Kwa Matingi Farmers Cooperative Society, said it would be a good idea if the Coffee Bill in Parliament is pushed until it is
enacted. "The bill is 90 per cent good for coffee farmers like us and we would like a leader who would go to Parliament and do follow-up to ensure it is passed because it would greatly benefit us as coffee farmers," said Mwovi. "We have listened to Mwithi and realized his agenda is in line with our interests. He has promised us several things that make sense to us as farmers and believe he would be the best shot for the position," he added. They want the sector to be productive as it was in the 70s, 80s and 90s. Kangundo and Kathiani were known to be the best producers of coffee and farmers raked in attractive profits.
The situation has however changed now and some even sell the beans for Shs30 a kilogram, which is a loss since coffee farmers in other counties are reaping big. "Middlemen and expensive fertilizer is a big challenge to farmers. If we are able to sell our coffee directly to the consumer, we can improve the profit. Also, the cooperative societies are sinking into debt while others have numerous court cases that are crippling them. There is a need for these issues to be addressed once and for all," said another farmer. Speaking after the meeting, Mwithi noted that poor leadership was the root cause of all the problems ailing farmers.
Farmers’ cooperative reaches business deal for quarrying to resume
Members of Muka Mukuu Farmers Society during a Special General Meeting Photo/Agnes Orang’o By Agnes Orang'o
Members of Muka Mukuu Farmers' Cooperative Society in Matungulu can now heave a sigh of relief after the disputes surrounding quarrying activities on their land were resolved. Speaking after a special general meeting, the chairman Dominic Nthwao said that quarrying will take place at their 750-acre land near Athi River. He noted that some of the members had gone to court to stop the quarrying activities. "We discussed mostly the stone quarrying and we came to an agreement that we should do it as a society rather than individuals as some suggested. The land is near Athi River. We will advertise bids for numerous companies to carry out quarrying activities on the land," said the chairman. He said they will gain as a society as the activities will be managed by the organization, thereby minimizing losses that could be incurred by individuals. Nthwao disclosed that
Good news for Machakos coffee farmers as they access direct export market By Agnes Orang’o
Coffee farmers in Machakos County have a reason to smile as they will now be able to sell their coffee directly to consumers without having to pass through exploitative brokers. This was disclosed by Kangundo MCA Moses Mitaa who said the County Government of Machakos acquired a license to export coffee without going through Kenya coffee Planters Union(KCPU). “I am happy to announce to our coffee farmers that our county government has a license to export coffee and our Lower Eastern cof-
fee mill will be upgraded to be able to mill quality coffee for export,” said Mrs Ndinda Mitaa. Musyoka, a Mitaa, who is also the shareholder at outgoing Chair of the AgWendano-Matuu ricultural Committee in Coffee Farmers the Machakos County AsCompany, inspects sembly said they already ripe coffee berries secured a market in South at the 280 hectares Korea. He noted that now the farm in Matungulu price per kilogram will Constituency in rise to at least Shs70 from Machakos County the previous Shs20 per Photo/Eugene Kioko kilo. He encouraged farmers who had uprooted the
one of the companies given the lease in 2019 failed to comply with the contract on cash remission, forcing the society to terminate the contract. He urged the members to shun propaganda and lies being peddled by some people. "We can only go far if we work as a team. Believe in us so that we can grow as a society," he said. The members, however, asked the committee to ensure funds from the mining reach the members.
Dominic Nthwao, Muka Mukuu Chairman
crop to revert and plant quality coffee as they will now rake in profits like in the 70s, 80s and 90s. “We have a buyer from South Korea whom I have met and gone round coffee societies and coffee farms where he witnessed how harvesting is done and how the soil is. I want to tell our farmers that there won’t be labour without wages anymore. When things are bad the price will be Shs70,” he said. On the same note, he said coffee societies will be revived, with the exception of those with huge debts. The MCA also urged the farmers to take advantage of the revolving fund to be able to access fertilizer, pesticides and other farm inputs. A spot check by Sacco Review established that many farmers, mostly in Kangundo and Matungulu sub-counties, had uprooted their coffee crop and ventured into other crops.
JULY, 2022
HUMOUR W RLD
SACCO REVIEW | 17
My cousin’s political fortunes and businesses built on quicksand
M
y cousin Timotheo has been hired as one of the leading campaigners for one of the parliamentary aspirants. That’s a windfall for him as far as his dwindling fortunes are concerned. Forget the fact that no candidate worth their salt can hire an egotist like Timotheo as a leading campaigner. Anyway, they say let sleeping dogs lie. So when he called me the other day informing me about his sudden change of fortunes, I laughed inwardly, wondering what the crazy world of politics was up to. 20 | SACCO REVIEW
“Make no mistake this time. Baruti is going to clinch this seat by as early as noon. We have laid all the plans to ensure our campaigns are seamless and flawless,” Timotheo said exuberantly. The call was very clear unlike before when he used to call me using an old mulika mwizi, which usually sent back an echo whenever you talked. Baruti had purchased a smartphone for my cousin and a handful of other rabble-rousers to ensure communication was spot on. Timotheo had been tasked with taking photos and sending content to Baruti using Whatsapp. The sad bit of the sto-
By Pascal Mwandambo ry was that he could neither tell the difference between the call button and Whatsapp, nor the camera application and video call. By calling me, he sought
SACCO DIARY The Ins & Outs in the Industry
Muhanji takes over New Chairman takes over at Dumisha Sacco
at Mufate ‘G’ Ndosha Sacco Sacco as new Board Chair CEO leaves
Mufate ‘G’ Sacco a new Board Christine Makenahas Obadiah leaves Ndoshaafter Sacco asconducting its CEO. Her place has and Chairman free been taken over by Bedford Gikundi fair elections. on an acting capacity. One of Makena’s Mr.remarkable Samuel achievements Muhanji now takes is the establishment Ndosha Sacco’s Light over from Mr.ofDanstun Mwisiahi, Industrial Park inthe Wiru Location about for who has chaired Sacco Board 2km from Chogoria town. It is billed as a several firstyears. in the industry to be undertaken by a TheSacco. elections, presided over by the Kakamega County Co-operatives Commissioner Mr. Ben Kangale during the society’s Annual Delegates Meeting, saw new delegates and Board members elected. The outgoing chairman Dumisha Sacco Head Office. congratulated the newly elected team Charles Leorto is the new Dumisha and asked those who lost to unite and Sacco board chairman. He replaces Mike Lolkurum, who has resigned. work as a team for the benefit of all. Leorto was the Vice Chairman “Let us all be good ambassadors and has served as board member and of our Sacco by actively participating secretary. Leorto, with his deputy, in the affairs of the society,” he said. David Lempesie, are expected to drive Christine thankedMakena, his predecessor the much-needed growth in the Maralal Muhanji Ndosha Sacco immediate based society, which was foundedfor in serving former the Sacco well and CEO. 1980. promised to carry on with the work Retiring Board chairman to ensure the Sacco registers more Mr. Dunstan Mwisiahi growth.
my assistance on how to use a smartphone - at a small fee of course! Secondly, my “ambitious” cousin wanted advice on what business to start using the income he would get from the campaign funds. During the last elections, one gubernatorial candidate had hired him as one of the goons and the results were just as bad. Apart from being badly hurt, the day old chicks business he started became a cropper after all his stock perished. This time round he was proposing to start a wines and spirits shop where he would also stock cheap keg sold in mugs locally known
as vuta pumzi. Given his poor business acumen and drinking habits, I can see that business crashing as fast as his candidate loses the contest. However, I did not want my ambitious cousin to feel that I was envious of him by trying to discourage him from pursuing his fleeting fortunes. The last time he sought my counsel, I advised him to sell Samantha, his old cow that had become a liability by eating so much fodder but only giving him half a litre of milk. Instead of thanking me for my business consultancy services, he told everyone who cared to listen that I wanted to bring his livestock project down. By the time he sold the cow at the peak of Covid-19, the poor cow could only fetch him only as much as he could buy it a bale of fodder.
OCTOBER, NOVEMBER, 2020
Ms. Njoroge succeeds Methu Ndoi leaves the Njogu over helmtakes of Afya Sacco as Cosmopolitan Sacco CEO at Unison Sacco
Unison Sacco has a new CEO, John Njogu, who before his appointment was the Information and Communication Technology Manager. Njogu, who has served the society for about 15 years takes over from George Muriuki, who has since retired. Muriuki had served the Laikipia-based society for more than 30 years, having joined in early 1990s.
Trans Nation gets new chairman Edwin Kaburu Thuura is the interim Board Chair of Trans Nation Sacco Board Chair, replacing Bedford Muriti Mutegi, who passed on. F.M. Ndoi, immediate Mutegi, who also served as the formerofAfya Cooperative Alliance KenyaSacco directorCEO passed on September 16 after a short illness.
John Njogu, Unison Sacco CEO.
Bandari Sacco’s Head of Operations quits Elizabeth Njoroge,
Sacco CEOhas left Bandari Agnes Munyi (pictured) Sacco as its Head of Operations to pursue greener pastures. At one time, Munyi served as the Acting CEOMs but was replaced byNjoroge Joseph Elizabeth Bee who was appointed the substantive chief has been appointed the executive by the Board. Bee had been serving new Development Chief Executive earlier as the Business Manager at the society.Officer at Cosmopolitan
Chief Executive Officer of Afya Sacco Felix Ndoi has opted for early retirement having Wana-Anga Sacco’s served the society for 32 years, Vice Chair dies Board chairperson Beatrice Mogire has reported. Wana-Anga Executive Committee She announced that Ndoi Vice Chairman Peter Omeny has retired at the end of November passed on after a short illness. Omeny 2021 and that the served as the Human Resource andBoard of Education Committee Chair. Management had appointed Mr Peter Gisemba, formerly the Financial Controller, to take over from him in an acting capacity.
Sacco. Njoroge, who has been serving as the Sacco’s Finance Manager, will replace Loise Methu who served the Sacco diligently for many years before her retirement early this year. Being an insider, Elizabeth is sure to fit quickly into the large shoes of her predecessor.
NewFortis Sacco
The former CEO was given a befitting farewell by the Sacco management along with staff in recognition of her long service to the Sacco, now one of the leading brands in the country. Methu was hired as a cleaner by the then Nakuru Teachers Sacco in 1982. She is the perfect description of the archetypical humble beginnings. Through sheer hard work and resilience, she got promoted to a clerk and her star continued to shine, seeing her rise through the ranks to land in the accounts docket. She then worked in the internal audit department and as a Deputy CEO in quick succession. Loise would later scale the ladder even further, when she earned the ultimate prize: being appointed the CEO in 2012.
18 | SACCO REVIEW
JULY, 2022
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
Change in the air at Asili Sacco
We are proud to be associated with the
100
th
Ushirika Day Celebrations
THEME: COOPERATIVES BUILD A BETTER WORLD
As the global economy appeared to cave in at the height of the pandemic in 2020, the Sacco resolved to reinvent and develop innovative, need-based and manageable products and services.
A
By Bernard Matumbai
sili Sacco Society embraced radical changes that essentially informed its newly launched 2022-2027 Strategic Plan as a measure to cushion its members, the co-operative fraternity and the larger national economy from the adverse effects of the Covid-19 pandemic. As the global economy appeared to cave in at the height of the pandemic in 2020, the Sacco resolved to reinvent and develop innovative, need-based and manageable products and services that will continue to reflect on the customer’s journey as well as implement measures targeted at improving members’ experience. To date, these products are diverse, favourable and affordable; targeting individuals, groups, institutions and businesses as the competitive environment in which the Sacco operates demands constant innovation and continous development of new products to match those of competitors. According to Board Chairman Mr Evans Aluda, Asili Sacco has revamped OKOA Loan and introduced the KARIBU Loan for new members. ASILI Chap Chap, the Sacco’s mobile banking credit platform now complements EZY CASH, a facility that is available at members’ convenience for their urgent financial needs. The Sacco has embarked on reenergizing the micro-credit section to align the structure with its current Strategic Plan. It has already recruited a Business Development Officer to help attain fully-fledged micro credit management and seamless product development. To achieve business excel-
Mr Evans Aluda, Board Chairman
lence, Asili Sacco’s leadership – both the Board and management – has since adopted rallying calls as their themes, namely visionary leadership, customer-centric, partnership development, fact-based process management, result focus and social responsibility. The Sacco now seeks to focus on the financing impact of productivity improvement since this is the key feature of business competitiveness.
The Sacco has taken advantage of technological dynamisms to refurbish its operations. To meet its business goals, it has leveraged on technology and innovations. It has majorly transformed its IT department by upgrading to MS Dynamics 365, revamping its website, upgradng its firewall and antivirus, introducing cloud back up, transiting to ASILI Chap chap and optimizing SMS, email and social media networking. Asili Sacco provides diverse and affordable range of savings and credit products targeting individuals, businesses, groups, churches and learning institutions. To increase eligibility for loans, members have been encouraged to pass their salaries through the FOSA facility. Early this year, the Sacco revamped its marketing department and is working towards networking the department with delegates digitally on social media. Asili Sacco has adopted initiatives such as marketers, service automation and rebranding to have a national appeal and increase membership. The Sacco aims to retain the membership through its
Asili Sacco at a glance Established in 1972 Membership drawn from Ministry of Natural Resources Opened Common Bond to accommodate all Operates both BOSA and FOSA services More than 11,000 members Pioneer of the Sacco Link Card Licensed by SASRA as deposit-taking Sacco Pioneer in salary processing Opened micro-finance section Granting collateral loans Mobile banking platform Asili Chap Chap 2022-2027 Strategic Plan themed ‘Creating some change’
Performance Indices Revenue Shs273 million Total assets Shs2.755 billion Share capital Shs231 million Member deposits Shs1.7 billion Investments Shs110 million Loans Shs1.4 billion
BOARD OF DIRECTORS
Ms Grace Okoth, Vice Chairperson
Mr David Angwenyi, Secretary
Ms Chesang Korir, Treasurer
memberdriven products and services. It has proposed to embark on an aggressive campaign to boost membership numbers as a move to raise awareness among the public about its products and services. The Sacco’s management encourages members to sell the Sacco’s products and services as they are the best marketers. The Sacco’s chairman Evans Aluda said all members are accorded an equal opportunity when accessing services and that transparency, accountability and integrity are part of the Sacco’s core values. “We strive to improve speed and delivery of our services, maintain high standards of governance and good practices and continue to demonstrate excellence and integrity in our governance systems, leadership and management so as to achieve sustainable delivery to customers. Plans are underway to ride our achievements to increase our membership base by opening our Common Bond,” he said.
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JULY, 2022
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
SACCO REVIEW | 19
DECEMBER, 2020
Innovation, change light up Asili DT Sacco from prev page.... The society launched a 5-year Strategic Plan running from 2022 to 2027, themed: ‘Creating Some Change’. This is to make the organization flexible and accommodate the new changes. During the Annual Delegates Meeting (ADM) held earlier on, delegates were advised to recruit marketing assistants on commission at branch level to improve the society’s growth. They were also challenged to build their savings before influencing others to save, as this will reduce on borrowing and increase financial growth. Long inducted into the ‘Billionaires Club’ of Kenya’s cooperative movement, Asili Sacco sits among the top 40 Saccos out of about the over 4,000 registered co-operatives in Nairobi. The Sacco celebrates its 50th anniversary having survived the turbulence of formative years. The extent of the Sacco’s innovativeness in the past 5 years attests to its vigour. The Sacco braved the economic challenges occasioned by the pandemic to record impressive growth in the year ended December 31, 2021. This emerged during the Society’s 49th AGM held in February in Nairobi. The chairman disclosed that the Sacco recorded growth in revenue of Shs273,634,110 in the period under review, up from
SACCO REVIEW | 13
ASILI SACCO S O C I E TY LT D
Shs263,306,529 the previous year. Total assets increased from Shs2,741,195 to Shs2,755,972, as share capital jumped from Shs220,535,605 to Shs231,052,279, a 4.8 per cent increase. In equal measure, Sacco ‘s active membership rose from 5,059 to 5,224. To overcome the reduction in membership and justify their representation, delegates were challenged to maintain the branch membership of 50 and above. The Society registered positive growth of 73 per cent in investments from Shs29,422,294 to Shs110,062,489, with the loan book also growing by 4.3 per cent from Shs1,372,279 to Shs1,431,173. Overally, total assets, members’ deposits and institutional capital grew by remarkable margins. The Sacco’s distinctive nature has made it a pronounced player in encouraging savings for development. To ensure that loans issued to members are utilized for the intended purpose, the Sacco follows up and offers advisory services to members with loans. It is documented that Asili Sacco’s unique business model has placed the Society towards its positive deviation. Chief guest Dolphine Aremo, the Nairobi County Director of Co-operatives, commended the Sacco for the growth trajectory. She noted that the Society takes position 36 among 72 billionaires in the county.
Vision
Mission
To be the preferred Sacco in provision of quality services and shareholder’s benefits.
To continuously mobilize member’s savings for provision of sustainable competitive financial services by using appropriate technology while adhering to cooperatives principles for benefits of shareholders.
USSD USSD
*346# *483*987#
FOSA PRODUCTS Salary processing Bankers cheques ATM services M-Sacco - *346 Paybill - 638018
FOSA PRODUCTS FOSA pride Salary advance Biashara loans Chama loan FOSA school fees Hustler loans
Emergency loan School fees loan Refinancing loan Jipange loan.
ASILI SACCO ACCOUNTS Ordinary Account Mwananchi v Saving Ordinary SavingFOSA Accounts
Account No openingv balanceAsili Super Saving Registration certificate of the Minimum operating balance Ksh 500 Saving group Minutes resolving to open v Education Account of the account v Baraka Saving Account Photocopies of the ID of signav FOSA Mwananchi Account Holiday Saving Account tories v Fixed Deposit Account Minimum opening balance Ksh v Malkia’s Saving Account 5000/= Minimum savings of Ksh 500 per month The minimum share capital of 12-month maturity 20,000/= SOCIETY REQUIREMENTS No monthly charges Interest will be determined from time to time Withdrawal is done once per yearfilled membership form 1.Submit a duly 2.Attach a passport size photo
Fixed Deposit 3.Attach a copy of your ID Asili Super Saving Account
4.Attach a copy of your KRA Pin Minimum opening balance Ksh 10,000 Withdrawal is done once per year Interest will be determined from time to time
Minimum deposit Ksh 20,000/= Minimum period 3months Interest rate negotiated depending on the account balance
Jisort na CHAP CHAP! by dialling *483*987#
BOSA SERVICES SHORT TERM
Develop capacity of the Sacco through training, education and research. Mainstream issues related to savings and financial freedom to our members. Promote adoption of ICT in the Sacco.
Holiday Saving Account
6 3 8 0 1 8
FOSA SERVICES
Objectives
Education Savings Account LONG TERM Okoa loan Ordinary normal loan Special normal loan Super normal loan Maendeleo loan Instant normal loan Jipange asset financing loan
Withdrawal is done quarterly Interest will be determined from timeJipange to time na Asili Free bankers’ cheque Sacco JIPANGE Premature cheque clearance Ksh 500
Baraka Savings Account
ASSET LOAN For more information, contact us immediately!!
Id or passport for parents/guardian Birth certificate of the child Minimum balance Ksh 1,000 p.m. Interest will be determined from time to time
SCHOOL FEES LOAN
1.Download salaryfor processing Malkia’s Saving Account -This accountthe designed the ladies form from ASILI SACCO WEBSITE
CONTACTS P.O. Box 49064-00100 Nairobi TEL: 0722472823/0733472823 E-mail: info@asilisacco.coop WEB: http://www.asilisacco.coop
Fill in the Malkia saving account application form and ID submit topassport Asili Sacco Attached both2.Fill the national and recent photo through the email asilisacco@yahoo.com Only charge on withdrawal Earn 10% interest per annum 3.Asili Sacco willwill inform your tofor be A voucher of Ksh 5,000/= be issued at theemployer end of the year ansending account with Ksh 200,000. your salary to us
OPINION
Lackluster performance of some cooperatives reason for State expropriation
By Fred Sitati In the recent past, the cooperative movement has lost two flagship cooperative institutions to the state through expropriation. These cooperatives are Kenya Cooperative Creameries (KCC) and Kenya Planters Cooperative Union (KPCU). KCC was renamed New KCC while KPCU was rebranded to New KPCU Ltd. The effect of this change is that the two entities are now state corporations enjoying funding from the national treasury though they are supervised by the State Department of Cooperatives (SDC) under the parent Ministry of Agriculture, Livestock, Fisheries and Cooperatives. The reasons given for such decisions include purported lack of capacity by the cooperatives to effectively manage the affected enterprises! The two questions that arise are: to what extent
are the cooperators’ interests safeguarded through such institutional changes and who are these parastatal heads answerable to? It is necessary to appreciate the reasons for the fundamental changes in these pioneer cooperatives that had for many years been the flagship cooperatives in the country. It will be recalled that the govt’s declared policy from the mid-80s was privatization of the economy as proclaimed by the Structural Adjustment Programmes (SAPs) that sought to significantly reduce the roles of gov’ts in policy formulation and that sought to create enabling environments for the private sector to drive the economies. That policy shift was lauded as a game changer and the Cooperative Societies Act of 1966 gave the Commissioner of Cooperatives power to appoint management commissions to replace elected management. It was applied till
1997 when parliament replaced it. We should be concerned that while the 1997 Act sought to grant the cooperative movement some autonomy and independence in line with the cooperative principle no.3, all these gains are now being rolled back through expropriation of cooperatives by the State. Cooperative governance policies
obligate cooperative leaders to do annual statutory audits and present them to members within a time frame of four months upon closure of the financial year. The same is not the case with parastatals which are more often than not audited after the lapse of many years due to limited capacity at the offices of the Auditor General (Corporations). Such belated audits are only interrogated by Parliament as part of their routine oversight mandates yet dairy and coffee farmers have no direct stake or voice on the performance of enterprises run by the State. Despite the fact that the government might justify the grounds for expropriation, it puts into question the suitability of cooperative institutions exclusively formed to serve these important sub sectors of our economy. The act of the state taking over cooperatives sets a poor precedent and sends wrong signals since two wrongs can’t
make a right. It gets worse when those appointed to manage such parastatals owe their allegiance to the appointing authorities and not to farmers who toil and moil to deliver their produce to their primary cooperatives. We want to see our cooperative institutions execute their lawful mandates with minimal gov’t involvement. In cases of mismanagements, they should be dealt with expeditiously, firmly and with finality so as to safeguard the interests of the ordinary farmers. The global cooperative community will be trooping to Seoul, South Korea this December to participate in the 33rd World Cooperative Congress (WCC). The theme of the Congress is “Deepening Our Cooperative Identity”! It is time for cooperatives to professionalize their management that is devoid of malpractices that have continued to be hallmarks in some cooperative enterprises in this country!
JULY, 2022
20 | SACCO REVIEW
NAIROBI
Tembo Sacco celebrates golden jubilee in style By Azael Masese
Tembo Sacco celebrated its 50th anniversary, a period in which it braved a tough journey to cruise to a solid balance sheet and stable liquidity ratios. While marking the golden jubilee on June 17, 2022 at the EABL grounds, members recounted the tumultuous journey it took to be able to get a return on their investment. A period interwoven by bright and dull moments, it did not, however, deter their ambition to become the largest shareholder of Tembo House, a prime property located in Nairobi’s Central Business District (CBD), which enables retirees to earn an income even in their sunset days. Sacco’s Chief Executive Officer (CEO) Lydia Mungai said the tough times, rather than dampen their spirit to push forward, helped them focus even more on turning around their fortunes. They bravely opened other investment arms that enabled members claim a stake on a number of properties. “I hear of legends like the late (Kenneth) Matiba. Some did very well. Others not so well. Some days were bright and beautiful, others were grey and dull. The Sacco had its glorious moments and other days, would not rather talk about. But that past has forged us and made us strong,” she said. Mrs. Mungai appealed to members, partners and stakeholders to join the society in a strong resolve of making a positive change in the society. “We step into the next 50 years with enthusiasm and energy, determined to continue doing that for which we exist: changing lives for better economically,” she emphatically stated. In its 50-year journey, the society has purchased Trio Complex, which formerly served as the EABL head office.
COAST By George Otieno
Imarika Sacco Chairperson Mr. Renson Ndoro has said the society expects to have a total asset base of Sh20 billion 2026. The chairperson said this in a recent Imarika Sacco’s members education meeting where they were taken through the Sacco’s journey, educated on its various products and services, and walked through its 5-year strategic plan. Mr. Ndoro said that currently the Sacco boasts of over 140,000 members compared to 3,400 back in the year 2013, when it was looking forward to a total membership of 286,000 in the five years follow-up. While taking the members through all the aspects of the Sacco, Mr. Ndoro appreciated the strides so far made and applauded the members for their effort. He said the society expects to have a share capital of 933 million shillings by the end of their 5-year strategic plan, 406 million shillings more than its present share capital of 527 million. In 2013, Imarika Sacco deposits stood at 2.1 billion shillings while in the current year, the deposits have risen to 6.8 billion with an expectation of 15 billion in the year 2026. The Sacco’s loans were at a record 2.4 billion in 2013, but have gone up to
Tembo Sacco Board, management and invited guests cut the cake to celebrate the Sacco’s golden jubilee It bought the house when EABL wanted to offload some of its fixed assets, taking advantage of the preferential treatment of the Sacco by the company. The society continued offering savings and credit business until 1989 when they formed Tembo Investment Cooperative Society. “This helped acquire Tembo Cooperative House located in Nairobi’s CBD, out of which investment members continue enjoying returns to date,” noted Board Chair Peter Kiguru, adding that it was a significant boost to the ordinary income from the society’s normal operations. The society formed Tembo Ventures Housing Cooperative Limited and more recently, Tembo Trio Investment Company Ltd to help members acquire land and other properties. “These are run by independent Board of Directors to afford the society time to focus on savings and credit ser-
vices,” he said. The society also engaged in an aggressive purchase of Co-operative Bank shares in the 1980s and 1990s, which has enabled members earn a return on
their investment every year. It acquired Tembo Complex located at Garden Estate where Sacco operations are conducted, as two office floors are rented out to earn the Sacco an extra income. To cement its financial position, it started FOSA activities in 2002 so that members could open accounts for withdrawable deposits such as salaries. “The Fosa operations have helped stabilize the liquidity position of the Sacco as we are able to attract withdrawable deposits,” said Kiguru. The biggest strategic decision the society made was in 2008 when it launched its first 5-year strategic plan. “Since then, we have had a roadmap and this has not only led to tremendous growth in the society but also helped us improve greatly in risk management and governance,” asserted the Sacco Chair, adding that they pride in being able to deliver quality services to members efficiently and in a cost-effective manner. In its tumultuous journey though, the society has bagged several acco-
Alloys Aboka, retired EABL Accountant, awards Grace Koki, one of the youngest Tembo Sacco savers
Nairobi County Cooperative Commissioner Dolphine Aremo keenly listens as Tembo Sacco CEO Lydia Mungai shares her thoughts
Imarika Sacco’s ambitious plan to hit Shs20 billion asset base by 2026
Imarika Sacco chairman Mr. Renson Ndoro addressing members Photo/ George Otieno
9 billion shillings in 2022. The chairman urged the members to visit their nearest Sacco offices and take loans to develop themselves and grow the society in return, suggesting that the Sacco’s biggest and highest asset was the loans. Impressed by the remarkable journey the society had taken over the years, Mr. Renson Ndoro was pleased to inform the members that compared to the year 2013 where the Sacco’s profits were only 518 million, today,
the society’s profits were a whooping 1.7 billion and expected to rise to 3.2 billion in seven years if the members keep investing in the society as they always have over the years. To efficiently serve the members from where they live and operate, Imarika Sacco has over the years invested heavily in infrastructure that meets the members’ needs. The Sacco is delighted to so far have 9 branches as compared to only 4 in 2013 spread all over the country with the ninth branch
lades during the Ushirika Day celebrations and delivered reasonable returns to members while ensuring loans remained competitive. On its leadership policy, one can be a Board member for a maximum of six years or two terms of 3 years each to ensure the best delivery of service while allowing fresh ideas to sprout. In a speech read by Nairobi County Cooperative Director Dolphine Aremo, Obonyo disclosed that the society had graduated to Tier 1 category after attaining an asset base of Sh.4.5 billion with member deposits clocking Sh.3 billion. Longest serving employees, youngest savers, and members who have been with the society the longest were awarded during the event. Those who graced the occasion include Sasra CEO Peter Njuguna, Co-operative Bank Director Banking Division Vincent Marangu, Qwetu Sacco Chair Alfred Mlolwa, Shirika Sacco CEO John Kirika, Nation Sacco Board Chair Peter Munaita, and KUSSCO regional Senior Manager Arnold Munene.
being under construction in Mpeketoni area. The latest branch to be opened is a Mombasa branch at Kengeleni launched on May 4, 2022. The Chair also asked the members to be proud of Imarika Plaza that stands tall at the centre of Kilifi CBD, saying the property should be the joy and pride of all Imarika Sacco members as it is their sacrifice and contribution that saw such a magnificent project become successful. To increase the number of members receiving services every day, the Chair revealed that the Sacco was in the process of adding a hundred more Imarika Sacco agents to support the existing 13 in rendering services. He also urged members to embrace the existing digital platforms that complement the physical offices and agents to easily transact and quickly get the society’s services whenever needed. In order to enable members conveniently repay their loans, Mr. Ndoro announced that the Sacco had extended the 5-year loan repayment period to 8 years. This, he said, would give the members sufficient time as they balance to meet their every day needs following
the tough economic times. Additionally, the Sacco has ‘Mtandao Loan’ as one of their products where members can walk into any of their offices and walk out with a brand new phone that will enable them easily access the society’s services and repay within a certain period. The Imarika Sacco Chair further encouraged the members to invest in their children by patronizing the Malaika Junior Savings Account, where members can conveniently save for their children’s school fees and future, while at the same time developing the young ones’ saving culture. The members also learnt of the Corporate Social Responsibility (CSR) ventures the society had been undertaking through its Imarika Foundation such as the Eye Treatment Camp held in Mombasa, the anti-jiggers campaign in Mwandaza Kaloleni, Kimbule, and Ganda, among others, the education scholarships so far awarded to over 24 needy but brilliant students, and the sanitary pads campaign that helps restore dignity to school girls who are unable to acquire them. The chairperson concluded by urging the members to be brand ambassadors and role models of the Sacco and encouraged them to bring more members on board so as to grow together as one large family.
JULY, 2022
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
We are pleased to be involved with the
SACCO REVIEW | 21
100
th
Ushirika Day
ANNIVERSARY
SALARY ACCOUNTS ACCOUNTS YOU CAN OPEN
PRODUCTS AND SERVICES PRODUCTS (BOSA) • • • • • • • • •
SHARES DEPOSITS EMERGENCY LOAN FEES LOAN DEVELOPMENT LOAN TOP-UP LOAN SUPER SAVER LOAN PREFERENTIAL LOAN SMART SAVER LOAN
Children under the age of 18 years
Jiinue Salary - Salary Accounts
PRODUCTS (MCU) • MICRO CREDIT ACCOUNT • BUSINESS LOAN • ASSET FINANCING
PRODUCTS (FOSA) • • • • • • •
AKIBA ACCOUNT JUNIOR ACCOUNT PIONEER SALARY ACCOUNT JIINUE SALARY ACCOUNT FIXED DEPOSIT ACCOUNT SACCO-LINK DEBIT CARD MOBILE BANKING
ADVANCES • PREMIUM LOAN • INSTANT LOAN • TULIZA LOAN
Fixed Deposit - Salary Accounts
Akiba - Salary Accounts
CONTACT US
Contact Numbers : Website: www.tntsacco.co.ke Meet Us In Office : 0111050510 0712 585874 Email: info@tntsacco.co.ke P.o Box 2274 - 30200 Admin no: 0712 585874 tntsacco@yahoo.com Teachers Plaza,Next tokitale police station. Customer Service No: 0111050510
JULY, 2022
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
22 | SACCO REVIEW
THEME: COOPERATIVES BUILD A BETTER WORLD The Board of Directors, management and staff of Airports Sacco are pleased to be associated with the 100th International Cooperatives Day celebrations on July 2, 2022 whose theme is; Cooperatives Build a Better World, as we mark milestones in the Co-operatives movement. Happy Ushirika Day
Airports DT Sacco Society: 28 years of soaring success
BOARD OF DIRECTORS
Mr Henry Ogoye, Chairman
Ms Gyllian Kwamboka, Vice Chair
Airports Sacco Chief Executive Officer Harrison Song’e (fifth right) poses for a group photo with his team during the 17th AGM Photo/Courtesy
O
By Bernard Matumbai n March 25, 1994, employees of state-run Kenya Airports Authority (KAA) teamed up to found Airports Sacco, a savings and credit co-operative society purposely to deepen financial service delivery to its members. The Sacco derives its membership mainly from KAA, organizations within and around airports across the country, MSMEs and individual members. The Society also has members in the diaspora – mainly the US, UK and Saudi Arabia. At the onset, about 18 members attended the first meeting, which was held on April 14, 1994 at the KAA headquarters in Nairobi. This inaugural meeting saw five officials elected on interim basis. These were Mr Simon Njunge, installed as Interim Chairman, Mr Hoboson Mwangovya (Vice Chairman), Mr SK Nyamu (Treasurer), Mrs Gladys Ilahalwa (Secretary) and Mrs Patricia Maitha (Assistant Secretary). Airports Sacco was officially registered on November 11, 1994 with an initial Share Capital of over KSh240,000. It was during this
period that the Sacco also joined the ranks of the Kenya Union of Savings and Credit Cooperatives (KUSCCO) as a member, complete with 100 shares worth KSh10,000. Cognizant of the fact that a co-operative is the most suited avenue through which small scale practitioners can jointly add to their net worth, Airports Sacco has over the years committed to good corporate governance and practices. 28 years later, the Sacco has taken a bold step in committing its resources, focus and direction to the achievement of its vision to be a leading, dynamic, vibrant and trusted Sacco service provider to its 2,000-plus membership. Riding on Kenya’s r e l a t i v e l y improved economic performance in the post-Covid 19 era, the Sacco remarkably registered all-round growth in its key performance indicators in the year ended December 31, 2021. With its asset base, total deposits, share capital, net loan portfolio and total revenue randomly growing by between 4.3 and 19.8 per cent, the Society attributes this milestone of positive
Mr Simon Peter, Treasurer
Mr Humphrey Bwire, Hon Secretary
Mr Bonface Kibisu, Member
Mr Isaiah Lusweti, Member
Ms Siddy Jepkirui, Member
Mr Anthony Kulei, Member
Mr Kenneth Juma, Member
Supervisory Committee
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AIRPORTS SACCO AT A GLANCE
A
irports Sacco is a savings and credit co-operative society that was formed on March 25, 1994 with the purpose of deepening financial service delivery to its members. The Sacco derives its membership from employees of Kenya Airports Authority (KAA), other organisations within and around the country’s airports and individual members. We also have Diaspora members in the United States of America (USA), the United Kingdom (UK), and Saudi Arabia. The Sacco was officially registered on November 11, 1994 and had a Share Capital
of over KSh240,000. It also joined the membership of the Kenya Union of Savings and Credit Cooperatives Ltd (KUSCCO) the same year, with 100 shares worth KSh10,000. The Sacco recognizes that a cooperative is the most suited avenue through which small-scale practitioners can jointly add to their net worth. Airports Sacco therefore commits to good corporate governance and practices. The Sacco has taken a bold step in investing its resources to provide focus and direction to achieve the vision to be a leading, dynamic, vibrant and trusted Sacco service provider in the country.
Mr Ronald Yano, Chairman
Mr Cyrus Gitari, Member
Mr David Ong’ondo, Member
Mr Harrison Song’e, Chief Executive Officer
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
JULY, 2022
SACCO REVIEW | 23
28 years of smooth takeoff at Airports DT Sacco from previous page... growth to its members, who critically informed the theme of this year’s Annual General Meeting (AGM) held in Nairobi on March 26, 2022. During the AGM, the Sacco’s Board of Directors proposed for subsequent ratification, a dividend distribution of 17 per cent and a further 8 per cent in interest on members’ deposits, with KSh6,026,187 being transferred to the statutory reserve. In the period under review, total assets remarkably grew 15.7 per cent to stand at KSh950,844,440 in 2021, up from KSh822,099,862 in the corresponding period in 2020, with total members’ deposits rising by 4.3 per cent from KSh629,142,861 to KSh656,480,094. On the other hand, the Sacco’s share capital grew by 5.8 per cent to hit Shs51,169,257 compared to Shs48,373,402 recorded in the previous year. Net loan book and total revenue rose from KSh571,834,540 to KSh689,566,072 respectively, representing a 13.9 per cent and 19.8 per cent increase in that order. During the AGM themed ‘Sustainability of the Sacco Through Member Participation’, immediate former national chairman Anthony Kulei passionately outlined a member-owned, member-managed and member-customer model. In return, he said, the Sacco management was committed to continue leveraging on technology to provide more short term loans on its mobile banking platform while introducing investmentdriven, long-term products at very competitive rates. Member mobilization has over the years yielded hundreds of new members, phenomenally growing from the initial 18 at formation to 2,181 members as at December 31, 2021. The former chairman went on to reveal that various growth strategies in membership growth, including developing and signing partnerships with organisations within and around airports, are in the implementation stage. To reinforce the continued growth of the Sacco in line with envisaged goals, Mr Kulei implored the Airports Sacco fraternity to keep on operating transparently and accountably, with full participation in AGMs, member education and training. On member economic participation, members were
Team leader and CEO Harrison Song’e urged to contribute towards the Sacco’s growth by adopting a sound saving culture on the one hand, and optimally patronising the products and services at its disposal on the other. Of note was the Sacco management’s benchmarking initiatives. Sacco Chief Executive Officer Harrison Song’e says the Society is in the process of implementing various programmes in ICT X | SACCO REVIEW infrastructure to achieve ICT-
driven operations and enhance service delivery to members. This, Mr Song’e avers, comes with the trappings of capacity building for board , staff and general membership, being key strategy in line with Cooperative Principle Number 5: Education, Training and Information. On his part, newly elected Chairman Henry Ogoye exuded the passion with which the Sacco’s drive to implement its current strategic
FOSA PRODUCTS • • • •
plan and developing a new one to drive the Society in years 2023-2027; as they continue to improvise key innovative programmes and initiatives. The Chair asserts that his organization is determined to mobilise funds and offer sustainable and affordable financial services to its members in order to enhance shareholder value through prudent management, with its members’ growth being its strength. The Sacco has innovative savings and credit salary account, savings account, children account, joint account, company account, fixed deposit account, the holiday account and VIP account. On the menu of credit services are Karibu Loan for new members and salary advance, among other loan products. Equally rich are wide-ranging FOSA services, which include KRA payments, bankers’ cheques, safe custody, NHIF payment and Co-op Bank cheques. Airports SACCO is equally strong in the provision of Mobile Banking Services that include transfers from FOSA Account to M-Pesa, airtime purchase, ministatements, loan repayments, requests for advances and deposit contributions.
MISSION STATEMENT Vision Statement
‘To be the Sacco of choice in provision of tailor made financial services to its members’
Mission Statement
‘To mobilize funds and offer sustainable and affordable financial services to our members in order to enhance shareholder value through prudent management’
Motto/Slogan
‘Your growth, our strength’
Core Values
Underpinning the vision statement values that AIRPORTS SACCO would like to promote among its membership of individuals, groups and organizations. These values will guide work of AIRPORTS SACCO and its relationship with its stakeholders. Ideally these values portray the virtues of AIRPORTS SACCO and also the image AIRPORTS SACCO would like to project to the general public. These include:• Integrity • Transparency and accountability • Customer service/focus • Teamwork • Democracy • Innovativeness • Environmental sustainability/concern.
INVESTOR RELATIONS • • • • • • • • •
Total Assets Shs950,844,440 Total Deposits Shs656,480,094 Share Capital Shs51,169,257 Total Revenue Shs689,566,072 Net Loan Book Shs571,834,540 Dividend Distribution 17 per cent Interest on Members’ Deposits 8 per cent Statutory Reserve Transfer Shs6,026,187 APRIL, 2022 Membership 2,181 and counting
AIRPORTS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LTD
Salary Account Savings Account Children Account Joint Account
Your Growth, Our Strength
BOSA PRODUCTS • • • • • • • •
Development Loan Emergency Loan School Fees Loan Bosa Super Loan 1 Hifadhi Loan Mega Loan Bosa Super Loan 2 Christmas / Idd Savings
M BANKING *477# Pay your loan via our Sacco paybill: PAYBILL
M-BANKING SERVICES • • • • • •
ACC/NO MEMBER NATIONAL ID NO
Request for Advance of upto KSh10,000 Transfer from FOSA Account to MPESA Airtime purchase Mini statement Repayment of Loans Contribute Deposits
Email: info@airportssacco.co.ke bosa@airportssacco.co.ke
BOSA contacts FOSA contacts Office: Next to KAA HQS, KAA Fire Office: JKIA Cargo Terminal Training School Phone: +254 715843888 Email: fosa@airportssacco.co.ke Mobile: +254 717243119 Email: bosa@airportssacco.co.ke
+254 (020) 2148939, +254 (020) 8221116, +254 (020) 611000, +254 (020) 6612000
JULY, 2022
24 | SACCO REVIEW
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SACCO REVIEW | 25
JULY, 2022
SACCO LEADER By Benedict Ng’etich
T
he successful growth of most Saccos in Kericho and Bomet counties can be traced back to serious commitment by a few ambitious elders. Most of the prominent businessmen today in Kericho County started in a trade known as “Kipsigirio”, which is the use of donkeys to transport commodities. Others were pioneer teachers, while some were the first people to be employed by white colonialists. One of these famous personalities is Mzee Nehemiah arap Suge, popularly known as “Lord Suge”, an enigma in the history and lives of the Kipsigis people in the larger Kericho region and beyond. He is the leader of an indigenous Savings and Credit Society which has managed to purchase thousands of acres from the multinational tea companies, as well as from the Nyayo Tea Zone. He was feted by the late Minister for Cooperative Development and Marketing Joseph Nyagah as an example to be emulated by the younger generation. Despite lacking formal education, the man is held in high esteem by virtue of his achievements. He was born in 1931 at Kapsuser in Belgut Constituency and never pursued formal education due to lack of school fees, which was Shs8 per term. “In 1951, I started my first business of buying and selling maize and milled flour. At that time, one bag of maize sold at KSh13, milled at KSh2 and then sold at KSh18.50 per bag. I would transport theX flour from Kapsuser to Kericho | SACCO REVIEW
The man behind the co-operative movement in the South Rift In the same year, I managed to buy my His first major contract was with first 3-tonne truck, registration number then Brooke Bond Liebig Kenya LimKDC 871, at the price of KSh27,000.” ited, where he initially supplied fireHe was probably among the first wood to the factories but by 1956 he Africans to purchase a heavy com- had been appointed as the main supplier mercial lorry. With others, he initiated of firewood to the company and had to Sinendet Multi-Purpose Cooperative in sub-contract others. 1977 with only KSh3 million. Currently His community involvement started the group, where he is the treasurer, is when the multinationals started disposputting up a 8-storey building in Ker- ing of their assets. icho town. “I felt the locals needed to be inThe cost of the project is estimated volved in investment for a more secure at KSh230 million and already KSh160 future. In 1975 Brooke Bond sold the million has been obtained as a loan from current Tea Hotel to the Kenya Tourism one banking institution. Trade Corporation, the predecessor of “We have started the construction the Kenya Tourism Board. I felt that the and the project will take a period of one locals should have a share and in view year to be completed,” said former Min- of this proposed to the Board that they istry of Lands Permanent Secretary Mr. sell part of this investment to us. They Josiah Sang, who is the secretary to the agreed to sell 40 per cent of the shares. Mzee Nehemiah Suge is society. At that time Tea Hotel was valued at happy he leaves a wonderful The now elderly Mr. Suge recalls Shs2 million,” he said. legacy in the Sacco movement incidents where members wanted to Photo/Benedict Ng’etich withdraw from the group and were demanding for refunds. He took a tough town, a distance of 10 KM, on donkey stance and invested the money. back,” he narrates. “Most of the members decided to He continues: “Having made some withdraw but I refused to give them savings, I started my own butchery in money. I had to trade with the money 1953, buying and slaughtering cattle and by the year 1989 we had KsSh36 locally. By 1955, I had moved to sup- million and that is the success story of plying charcoal for the Kericho District our society,” Mzee Suge disclosed. Hospital. The Kipsigis County Council, Ambassador Joshua Terer, one of then headed by Mr. William Bill Martin, his friends, describes Suge as, selfpaid Shs4 per bag. The requirement for made, focused, resilient and with a balthe hospital was onlyFOCUS 60 bags a month. anced social life. ON 100TH USHIRIKA DAY CELEBRATIONS
He proceeded to register Yasangwan Holdings Limited to raise the funds needed for the purchase. Subsequently, he and others founded Kapchain Company Limited and he sensitized the community on the need to buy shares and assets from the departing whites. “I rallied the community to the point that in 1989 we managed to buy 932 acres of mature tea under a parent company which we named Kericho Rural Multi Purpose Co-operative Society. Under this umbrella company, we managed to buy Mau Tea Estate,” he said. He has founded schools and churches since the 50s, notable among them Chepsir Secondary School in1976. “I also initiated the local dispensary which used to be a settler’s barn. Later I spearheaded its renovation, expansion and registration as a health centre, complete with a laboratory,” he said. In his twilight years, Mzee Suge is satisfied with his achievements and wants the younger generation to pick and carry the cooperatives mantle to greater heights.
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
TRANS ELITE COUNTY SACCO LIMITED FORMERLY NANDI TEACHERS
We are elated to be a part of
Mr Alfred Ng’etuny, Chairman HISTORICAL DEVELOPMENT
Registered in 1978 by teachers from the then Nandi District Formerly Nandi Teachers Sacco Head office at Kapsabet Membership at 4,000 Opened BOSA in 2004 to cater for teachers’ banking needs
Mr Ezekiel Sawe, CEO FINANCES 2021
Revenue Sh.181 million Asset base Sh.1.45 billion Dividend payout 7.5% Interest on member deposit 5% Loan portfolio Sh.600 million Sale of Sacco Plaza at Sh.39 million Interest rates reduced to 1.045% from 1.075%
Ushirika Day celebrations RETIREMENT PACKAGE Members are encouraged to retain their membership after retirement Lumpsum monthly pesion paid through FOSA Monthly contribution of Kshs 500 Loans available like other members and are serviced through Standing Orders No guarantors are required incase you have shares CONTACT US:
TEL: 053 - 52103 P.O. Box 547 - 30360
www.tecsacco.co.ke info@tecsacco.co.ke
Mzee Suge giving tips to co-operative officials on good management practices Photo/ Benedict Ng’etich
JULY, 2022
JULY, 2022
26 | SACCO REVIEW
Saccos growth threatened by low savings due to rising inflation By Azael Masese Kenya’s saving rate might decline due to skyrocketing inflation, raising fears on the country’s ability to raise the necessary capital for investment. The cooperative sector and Savings and Credit Cooperative Societies (Saccos) in particular stand to be the biggest losers. Kenya is gearing up to mark the 100th Ushirika Day on July 2, 2022, an event which will see Kenya being praised for topping the African charts in the cooperative movement and ranking 7th globally. According to the Cooperative Commissioner David Obonyo, the cooperative sector contributes about 31 per cent of Kenya’s national savings. Saving is a critical cog of the cooperative movement and the Saccos in particular, whose core mandate is to mobilize savings. However, high inflation rate is squeezing Kenyans’ pockets, with fears of a global recession further dampening growth prospects. Kenya’s gross saving rate as a percentage of the Gross Domestic Product (GDP), according to a 2020 World Bank report, stands at 15 per cent. Uganda and Tanzania stand at 22 per cent and 34 per cent respectively. Kenya lags behind Africa’s average saving rate of 17 per cent and this is compounded by a current sluggish outlook. Past reports have established a correlation between the saving culture
John Muigai, Cosmopolitan D.T Sacco chairman and faster growth prospects. China for example has a 45 per cent rate of the savings to its Gross Domestic Product. Consequently, its high growth rates are attributable to the high saving rates. Cosmopolitan Sacco Board Chair John Muigai cited the harsh economic times facing Kenyans as the cause of the low saving rates. “Kenyans, compared to other East African Countries, are paying through their noses for essential commodities and sparing very little for saving,” he said. Muigai highlighted the comparative fuel prices between Tanzania and Kenya as enough case study resulting to the country’s poor savings. In the past, there have been cases of Kenyan motorists living near the two borders, notably Isebania, flocking to neighbouring Tanzania for fuel, which
Mr. Haron Biwott, Smartlife Sacco CEO is cheaper. “The poor saving culture is brought about a poor economy, forcing many to go into mobile loans,” he regretted. Wanandege Sacco CEO Joanne Cheruto concurs on the high cost of living eating into Kenyan’s pockets, hence eroding their power to save. “Majority of Kenyans are economically subdued due to the high cost of living, making it hard for them to save,” she said. However, she said wrong perception on savings especially with Saccos could be hurting the culture. Cheruto noted that there are those who could be discouraged from saving since they are fed with the wrong information. With the harsh economic realities knocking on Kenyans’ doors, Cheruto feared that the saving rate could decline. “With the hard economic times,
Kenyans will be hard pressed to spare a few coins as savings,” she said. On mobile borrowing, Cheruto said that the situation where Kenyans can fail to repay is sending the wrong message on the need to save. “There are those who borrow from the mobile loans but fail to repay and this is sending the wrong message on saving,” she said. It is common for Kenyans to use one sim card to borrow and discard it. Though the high cost of living is a contributing factor to Kenya’s poor saving rate, Smartlife Sacco CEO Haron Biwott critiques Kenya’s unique consumer behaviour. “A good number of Kenyans spend whatever they have on luxurious lifestyles and not on the basic things,” he said, adding that Kenyans borrow money to spend on secondary items and any idea of delayed gratification takes a
back seat. “Even when Saccos encourage to save and borrow three or four times their savings, they cringe,” he regretted. He revealed that the members opt to instead approach commercial banks with their pay slips for immediate cash to satisfy their financial needs. “Even if we educate them on the advantages of saving and taking credit with our cheaper interest rates, they are disinterested,” Biwott said. A study by the University of Nairobi titled ‘Gender and household savings behavior in Kenya’ offers insightful peek into the country’s saving rate. “Low savings in an economy means unfavourable growth of the economy, poor job creation and inferior overall living standards relative to nations with a better savings performance,” it observes. It revealed that household heads within the age bracket of 45-65 years had the highest (65.6 percent) saving rate of 0.00-0.20 percent and the least (9.4 percent) saving rate of 0.041-0.60. The study recommends that low income earning households should be sensitized on the importance of savings.
George Ototo, Group Managing Director Kuscco Ltd, hands a gift to Joanne Cheruto, Wanandege Sacco CEO during the society’s ADM. Photo/ Felix Wanderi
Kenyan Sacco women get global leadership awards By David Kipkorir Muki Sacco CEO Violet Ndungu and her Unisa Sacco Society Ltd counterpart Polly Gathoni Waweru are among four women across the world who were awarded the 2022 Global Women’s Leadership Network (GWLN) scholarship. The other two 2022 GWLN Scholarship recipients are Dorothy Mambulasa from Malawi Union of Savings and Credit Co-operatives Limited (Malawi) and Enkhchimeg Nergui from Mongolian National Confederation of Credit Unions (Mongolia). The scholarships made them members of the network and provides them with opportunities for professional expertise, networking and skill diversification. The women also have a sponsorship to take part in the 2022 World Credit Union Conference (WCUC) in Glasgow, Scotland, from July 17-20, 2022 (including travel, hotel accommodation and a stipend). They will also have an opportunity to present project proposals and win an ‘empowerment grant’. The director for the GWLN Lena Giakoumopoulos said that through support from corporate sponsorships and individual GWLN memberships, they expanded the annual scholarship
Muki Sacco CEO Violet Ndungu(left) receives an award from Mary Mungai, former Commissioner for Cooperatives Development in Nairobi. Looking on is KUSCCO National Chairman George Magutu File Photo programme and re-introduced the empowerment grant. “It was exciting to see several unique proposals from women applying for the first time from credit Union systems around the globe,” said Giakoumopoulos. Giakoumopoulos added: “Some project proposals focused on specific issues impacting the local communities, while others presented solutions to improve businesses
targeting specific populations in their respective regions. The common denominator is empowered women from diverse financial and socioeconomic backgrounds leading, facilitating and implementing projects with the support of GWLN.” In 2022, GWLN will be offering scholars the opportunity to receive an empowerment grant to implement a new or continuing home-based project focused on empowering
women, their credit Union members and/or their local communities. The GWLN scholars will be required to attend all GWLN-specific events during the 2022 World Credit Union Conference, including the GWLN reception and the GWLN Forum—where they will each make a presentation on the empowerment grant project proposal submitted as part of the scholarship application process. Attendees of the GWLN forum will cast votes to select two winners, who will be announced following WCUC. Each empowerment grant winner will receive $10,000 to implement their proposal over the course of the next twelve months. All scholarship recipients will also be required to attend 2022 scholars’ meetings, showcasing the progress and growth in their credit Union/communities, along with the GWLN sister society virtual strategy session later this year. Since 2009, GWLN has awarded 90 scholarships to women from 30 countries. Scholarships and empowerment grants are made possible through funding from annual memberships and corporate donations from Co-op Solutions, CUNA Mutual Group, PSCU and the Susan Adams Scholarship Fund supported by One
AZ Credit Union. “The scholarships and empowerment grants provide opportunities for growth, learning and connection,” said Giakoumopoulos, adding: “But, more importantly, they offer hope for the future.” Last year, GWLN awarded eight scholarships to industry women, allowing them to join the network and gain opportunities for professional development, networking and skill diversification. The 2021 scholarship winners were: Jane Ndambiri, a junior clerk at Taifa Sacco Society Ltd, Kenya, Gertrude Wambuga, Board Director at Kenya Union of Savings and Credit Co-Operative Ltd (KUSCCO) and Charo Jawadu, Business Development Manager, Mudi Sacco, Malawi. Others were Patience Duduzile Sembereka from United Civil Servants Sacco in Malawi, Mary Rose Gob, a Certified Cooperative Manager at National Confederation of Cooperatives, The Philippines, Elizabeth Kanyane Khumalo from People Empowerment Co-operative Financial Institution in South Africa, Rachel Chojnacki from Calcite Credit Union in USA and Dawn Lepore from Vantage West Credit Union in USA.
SACCO REVIEW | 27
JULY, 2022 By Tsozungu Kombe
L
engo Sacco has continued to perform well across all spheres despite the economic challenges in the country. Speaking to Sacco Review in his Malindi office, the Sacco’s CEO Mr. William Karani Yaa said the vibrant Sacco has been progressing very well in terms of offering quality services to members and the general public. Mr. Karani said they have projected an increase in asset base to KSh600 million by December 2023. He added that since the year began, the Sacco has given loans amounting to KSh297,543,000. He further disclosed that the Sacco’s share capital has also increased from KSh29 million in 2021 to KSh40 million in June, 2022. “We currently have an active membership of 27,100 and plans are underway to recruit an additional 10,000 members by the end of December 2022,” he revealed. Mr. Karani said they aim to increase their share capital through increased membership. “Our delegates are currently carrying out the recruitment exercise at the grassroots in the
Lengo Sacco projects asset base to hit KSh600 million
Lengo Sacco headquarters in Malindi town
A client being served at the Sacco
‘
To serve members better, we have fully fledged branches and two site offices. Our main office is in Chartered Building in Malindi, the fully fledged branch is in Kilifi, and the two site offices are in Mtwapa and Mariakani in Kilifi County.
Beatrice Gona, Human Resource Manager
Arnold Jembe, Accountant
accountability and honesty while discharging their daily duties to win the trust of the people they serve. He urged county residents to join the Sacco in large numbers to benefit from their products and services. “Joining our Sacco will enable you save and invest heavily. Through prudent saving, you’ll qualify for higher loans to accomplish your personal development projects,” he urged. He noted that many people in the country have managed to accomplish their personal development projects through taking loans from their respective Saccos. Mr Karani pointed out that the cooperative movement plays an important role in uplifting the living standards of people. He revealed that the Sacco’s management has approved the purchase of a vehicle to enable the Sacco operate effectively and efficiently. He revealed that the
Hope Nyevu Jefwa, ICT officer
LENGO SACCO
William Karani Yaa, Lengo Sacco CEO rural areas within the county,” he pointed out. He attributed the Sacco’s success to the cooperation between the Board of Directors led by Mr. James Garama Karisa as the Chair, the management team and the staff. Mr. Karani disclosed that the Sacco had adopted Information Communication Technology (ICT) in a bid to enhance efficiency in service delivery. “To serve members better, we have fully fledged branches and two site offices. Our main office is in Chartered Building in Malindi, the fully fledged branch is in Kilifi, and the two site offices are in Mtwapa and Mariakani in Kilifi County,” the CEO said. The CEO urged the Sacco leaders, staff and members to fully cooperate and work as a team in order to push the vibrant Sacco to the next level. He urged top Sacco officials to exercise a high degree of transparency, integrity,
Irene Mbuiwa Kimeu, Loans Recovery Officer
0707 700 084 | 0719 871 817 Email: info@lengosacco.org PRODUCTS AND SERVICES
Emily Neema Kahindi, Marketing Officer Sacco has 30 employees. Lengo Sacco was formed in 1976 with only 50 members and employees of the former Malindi Municipal Council. Mr. Fredrick Fukwe Tsuma, Daudi Kahindi ,Fredrick Nguma, Christropher Yaa Mwangala and Rodgers Chea are some of the Sacco’s founder members. The founder members formed the Sacco with the sole objective of uplifting their living standards. They used to contribute only KSh20 as monthly contributions. Currently, members are allowed to contribute monthly deposits ranging between KSh3,000 to KSh5,000.
Savings Products • • • • • • • •
Loan Products
JAWABU ACCOUNT TUINUKE PAMOJA ACCOUNT LENGO SAVINGS ACCOUNT SHEREHE (CHRISMAS/ IDD/ BIRTHDAY) ACCOUNT TUNZA JUNIOR ACCOUNT MAMA JIANDAE ACCOUNT BAKISHA ACCOUNT CORPORATE ACCOUNT M-pesa
Make deposits and Loan repayment through M-pesa Paybill no:319938 MALINDI HEAD OFFICE Stanchart Arcade Building P.O. Box 1005 – 80200, Malindi Tel: 0715 882 191/ 0707 700 084 0719 871 817/ 042-2131126 Email: info@lengosacco.org
Paybill no: 319938
KILIFI BRANCH Guiness Building TEL: 0790487091 Email: info@lengosacco.org
• • • • • • •
DEVELOPMENT LOAN OKOA LOAN DEVELOPMENT LOAN TOP UP BAKISHA LOAN SOMESHA LOAN SMART LOAN EMERGENCY LOANS
MTWAPA SITE OFFICE Mama Ken Plaza 3rd floor TEL:0769394450 Email: info@lengosacco.org MARIAKANI SITE OFFICE TEL:0113558116 Email: info@lengosacco.org
HOUSING & INVES TMENT 28 | SACCO REVIEW
JULY, 2022
By Boy Matumbai At the onset of the Covid-19 pandemic, Hazina Housing Co-operative Society chairman Charles Musungu agonized with two of his friends who had lost their jobs to the damning ravages of the outbreak. Looking further, he figured out that both his friends owned plots that they were yet to develop. However, even as he empathized with his friends, Mr Musungu was optimistic something could be done. To begin with, it was apparent that trouble with rent and self-sustainability loomed large. It then took him the courage to face his two friends with a word or two in wise counsel. “Do you have any savings that can afford you some mabati to start you off by fencing your plot?” he posed, to which his friends separately answered in the affirmative. His counsel would instantly resonate well with them, for in a matter of days, they went on to fence their plots and – much later – embarked on construction in their own small way. Fast forward, the two have settled on their own properties and, in essence, making Mr Musungu proud. With the development, the two men now have chances of feeding their family, for, according to the chairman, they can happily rear chicken as well as grow sukuma wiki on their own plots. The rest, as they say, is history. In retrospect, Musungu argues that Covid-19 had to take place. “Covid-19 was prophesied. A prophesy doesn’t fail. It’s real and must take place,” he ponders, adding, “This is just a beginning.” The chairman asserts that having an own compound is crucial as opposed to living in a rental property that makes us vulnerable to uncertainties in the event of probable loss of income, noting that one has the luxury of growing maize and vegetables, as well as domesticating chicken or goats. Speaking exclusively to Sacco Review, Musungu takes us through the
Hazina Housing Co-operative Society setting pace in home ownership With pressure mounting on Saccos to provide housing solutions to members, Hazina Housing is a step ahead in identifying and inviting members to purchase land through their investments in the Society.
Charles Musungu, National Chairman successive projects that Hazina Housing Co-operative Society has scaled to make home ownership a near-reality to majority of their 1,370 members mostly drawn from the mother Sacco, Hazina. Through his mobilization, the chairman managed to rope in new members from Ushuru Sacco, thanks to his previous days as a taxman at the Kenya Revenue Authority, KRA. The society’s 20-acre Kisaju project in Kajiado County is virtually sold out, with only two quarter-acre plots remaining. In Joska, its new 17-acre project is
awaiting official launch, as sale agreement is ongoing with willing members already making deposits. Hazina Housing’s model is currently restricted to acquisition and sale of land. With this, members have been left wondering how to actualize their dream of owning a home without a developer. “As it is now, we have restricted ourselves to making land available to members, not housing, leaving them wondering: how do we do it?” Musungu poses. Revealing his office is in talks with some institutions to finance the development of affordable housing units for members, the chairman laments the non-responsiveness of Kenya Mortgage Refinance Company (KRMC), a government agency, to Hazina Housing Co-operative’s successive appeals. Some of the financial powerhouses the co-operative is talking to include Fontana, Foltan and France’s Ropco. Some 600 members out of 900 have developed plots. Joska project is the society’s seventh, coming after Lukenya 1 and 2, Kisaju, and Kangundo 1, 2 and 3 projects. In Lukenya Phase 1 – consisting of 20 acres – three people, including Hazina Sacco chairman Evans Kibagendi, have already developed and settled in their own homes. Lukenya Phase 2, a 10-acre project, has attracted Ms Josephine Mwakima, the Hazina Sacco Supervisory Committee Chair, being one of the ten people who have since settled on their premises. What informs the uniqueness of the Hazina Housing Co-operative projects? “Ours is all about the welfare of members, not business – at least for now,” reveals Musungu, adding that
RIFT VALLEY
Unison Sacco introduces novel retirement plan
By Asa Maina Unison Sacco has introduced the Golden Plan, a retirement saving plan that will see members save a minimum of Shs200 monthly, withdrawable upon retirement. The Sacco chairman James Muhandi revealed that upon retirement, the depositor will determine whether to receive the money as a lump sum amount or in monthly installments. “The interest rate payment shall be at the same percentage as other non with-drawable deposits and the interest earned will be ploughed back into the saving plan while contribution will be through check off or standing orders,” he explained. He added that if well-implemented, members will be very wealthy upon retirement.
Speaking during the Sacco’s Annual Delegates Meeting held at Wiyumiririe Primary School in Laikipia, Muhandi reiterated the Board’s commitment to overseeing the implementation of the financial institution’s 2022- 2026 strategic plan. “We are focused on adopting the next phase of our business model through market outreach, with ICT and marketing as business enablers. Emphasis on efficiency and capital adequacy is the key to sustainable growth in this highly regulated deposit-taking Sacco industry under the Sacco regulations,” he said. Supervisory committee Chairman Charles Wachira Kiruri said that by December 2021, the Sacco had opened three new branches in Naku-
ru, Isiolo and Maralal after the Maralal marketing point was upgraded to a branch. Kiruri pointed out that competition from other financial institutions, low business for its micro credit business customers and the adverse effects of Covid-19 had somehow affected the Sacco’s business. Laikipia Director of Cooperatives Rosemary Ngugi lauded the plan to introduce the Golden Plan scheme, saying it will help members, who are mostly teachers, to maintain their lifestyles even after they retire. ‘I would like to urge teachers to take advantage of the plan so that upon retirement, they will have income to enable them finance themselves,’she said.
pricing is key here. At Kangundo Phase 3, for, instance, quarter-acre plots are going for Ksh575,000 compared to Devki – barely a stone throw away – who trade in the same for Ksh900,000. Other than the member-friendly prices, Musungu insists on what he terms ‘proper sizes; being Hazina Housing’s tradition. To qualify to be a member of Hazina Housing Co-operative Society, one only parts with Ksh2,000 in registration fee and a minimum of Ksh10,000 being minimum share capital. Musungu pleads with Hazina Sacco’s 34,000-strong membership to join the housing co-operative society and patronize its affordable product to enable them build their own homes. “Rentals are expensive in the long run. Take, for instance, 20 years of paying rent. You realize you will have spent far more than what you will do buying a plot and constructing your own home,” he challenges Sacco members; most of whom he says are still paying rent. The chairman says Hazina Housing is completely independent of Hazina Sacco.
Musungu has been a Hazina Sacco member for more than 20 years and a delegate for 15 years representing KRA. For six years, he chaired the Sacco’s Nairobi branch while also chairing the Board of Hazina Housing Co-operative Society. Having run the society since 2014, Musungu feels he shall be reviewing his stay at the helm in two years’ time, in line with his personal believe in 10-year timelines. A Christian counselor who also dabbles in secular counseling, Musungu has a background in teaching. Passionate about the co-operative movement, the chairman says he long predicted that in 50 years, banks will be obsolete. “The trend, capacity and economic significance of the co-operative sector long pointed at the sector taking over from banks,” he says. For every project commissioned at Hazina Housing Co-operative, the society retains some plots that are habitable for development of shopping centres, social facilities and other future investments. The chairman reveals they are looking forward to venturing into construction of property to sell to members and the general public. Charles Musungu, Hazina Housing chairman, leads members during balloting day at Nimrod Road, Kantafu
EASTERN
Solution Sacco trains Form One students on financial prudence By Sacco Review Reporter
Solution Savings and Credit Cooperative Society has offered to train Form One students on financial literacy in a drastic move aimed at inculcating a saving culture in the young learners. Solution Sacco Chief Executive Officer Daniel Marete said educating the students on the benefits of saving was certain to help them make sound Daniel Kinyua Marete, CEO financial decisions in future. Already, the cooperative lines of offering financial litersociety has opened bank accounts for 60 students under acy training at various levels of learning. their sponsorship. Early this year, the Sacco The Sacco’s latest initiative is just part of its Corporate partnered with the Teachers Social Responsibility (CSR) Service Commission (TSC) to projects fashioned along the provide teachers with similar
training on financial management. Coming at a time when disciplinary cases attributable to financial mismanagement were aplenty in the teaching fraternity, Solution Sacco is primed to address such inadequacies that have cost many teachers their livelihoods. Across many counties, numerous cases of disciplinary actions have been directly related to a lack of prudent financial management. With acquisition of loans among teachers on the upward trend, Solution Sacco intended this programme to reach out to teachers in over 10 counties. Such are the deficiencies that have seen teachers fall to alcoholism that is responsible for absence from work.
JULY, 2022
FOCUS ON 100TH USHIRIKA DAY CELEBRATIONS
SACCO REVIEW | 29
We are happy to be part of the
Ushirika Day celebrations
Mr. Richard Mutai, Chairman
BOARD OF DIRECTORS
BACKGROUND Registered August 8, 1991 as Belgut Tea Growers Sacco Changed to Kericho Tea Growers Sacco Rebranded to Kenya Highlands Sacco in 2010 Membership includes dairy, sugarcane, and coffee farmers Others are civil servants, business community, public and private companies Has five branches mainly in tea growing areas
Mrs Alice Kosgey, CEO
Mr. Johana Kimetto, Vice Chairman
Mr. Issac Ng’etich, Board Member
Mr. David Lang’at,Treasurer
Mr. Peter Kirui, Credit Manager
Mr. Reuben Too, Hon Secretary
Mr. John Kosgei, ICT Manager
ECONOMIC INDICATORS
Mr. Dennis Korir, Board Member
Mr. Robert Kirui, Internal Auditor
KENYA HIGHLANDS SACCO
Mr. Paul Chirchir, Supervisory Chair
Total assets grew to Shs3.49 billion Loans 2.9 billion in 2021 compared to Shs2.044 billion in 2020 Revenue at Shs556 million, a 25 percent rise Membership increased to more than 110,000 Plans to put up Shs250 million building in Kericho town Raised Shs144 million for the project
JIJENGE DEVELOPMENT LOAN Based on four times your deposit Repayment period: 72 months with competitive interest rates
CONTACT US:
+254 719471633
info@kenyahighlandssacco.co.ke
Pamoja Tunawiri
JULY, 2022
30 | SACCO REVIEW
Sweeping reforms in cooperative sector as NACOs now replaced with Federations By Roy Hezron As Kenya joins the world in celebrating the International Co-operative Day, locally known as Ushirika Day, the National Co-operative Policy has restructured the co-operative movement in the country as part of sweeping reforms in the sector. Apart from the policy recognizing co-operatives as private business organizations, it has also proposed a new structure that promotes integration and enhances self-regulation. While retaining the four-tier system to support the growth of the movement, the policy replaces the tier previously known as National Co-operative Organization (NACO) with ‘Federations’ as a way of enhancing self-regulation within the movement. To facilitate growth within the movement, sector-specific co-operatives will be promoted at the national level. The replacement of NACOs with Federations will differentiate them from Unions at county level since the Federations, once established, shall offer services to their affiliates in matters of advocacy, market research and promotion, and formulation of sector-specific standards and regulations. Such will include ensuring that all affiliate societies keep proper records and books of accounts, provide a platform for the advancement of ICT and innovations for its affiliates, and provide education and training to affiliated societies. They will also establish and enforce a code of ethics for their affiliates in the counties, work with other local, regional and international bodies for the benefit of its affiliates, develop and enforce such standards that shall be necessary for their advancement, and engage in any
The new structure seeks to empower the Co-operative Alliance of Kenya (CAK), which is the apex body in the Country’s Co-operative structure, to play its rightful role of advocacy for the co-operative movement.
Daniel Marube, CAK CEO business to promote the interests of its county subsidiaries as long as the business is not in competition with them. The new structure seeks to empower the apex organization, the Co-operative Alliance of Kenya (CAK), to play its rightful role of advocacy for the co-operative movement. Currently, the co-operative movement in the country operates on a four-tier structure where societies are classified as either primary, Union, national or apex. At the lowest level of the structure are the primary co-operatives that are formed by individual persons, usually as a single purpose or single product enterprise. In order to enhance economies of scale, the government encouraged the
formation of Unions that operated at district or sector levels. These Unions have their membership drawn from primary cooperatives, and are instrumental in the provision of either specialized services or goods. At the third level are the National Co-operative Organizations (NACOs), usually specialized vehicles that offer sector-driven services to affiliated primary co-operative societies and Unions. At the apex is the Co-operative Alliance of Kenya (CAK) that is meant to be the custodian of the cooperative principles and values in the country. The structure was meant to provide a viable economic unit capable of providing services to members, exploit the economies of scale to ensure the highest possible returns to members, align each co-operative sub-sector with a national co-operative organization to coordinate activities of its affiliates nationally and internationally, and have a strong apex organization to lobby and articulate the interests and concerns of the co-operative movement at county, national and international levels. According to the new policy, the structure as it exists today cannot effectively serve the movement in the current economic environment since the second and third tiers have basically collapsed or changed into organizations that are not Co-operative in nature or simply gathered themselves into one single tier. The policy notes that many district
co-operative Unions have since collapsed while the sector-specific Unions like Kenya Union of Savings and Credit Co-operatives (KUSCCO) and National Cooperative Housing Union (NACHU) have moved up the ladder and are now recognized as NACOs. The Co-operative Bank and Co-operative Insurance Company have since ceased being co-operative organisations and are represented in the co-operative movement by the mother co-operatives that own them. “Most importantly, the linkages between different levels are no longer discernible. Apart from the primary level where membership is clear, all other levels seem to be competing for affiliation from the primary co-operatives,” reads the policy statement in part. The policy observes that the competition tends to create friction within the movement, especially where the functions of the different secondary organizations appear to be overlapping. The NACOs and even the apex organization seem to be engaged in businesses that are in direct competition with each other and sometimes with the affiliate primary cooperatives. “This has not only created conflict within the movement but also caused fatigue among the different players in the sector, resulting in the weakening of some cooperative organizations that are key to the growth of the movement,” the policy further reads.
In the reorganized structure, the CAK shall remain the apex organization with membership being restricted to the Co-operative Federations. However, secondary cooperatives that are not sector-specific and cannot therefore affiliate to any federation shall affiliate directly to CAK whether they are county or national-oriented. The apex may admit any organization or society as an associate member without voting rights for the purposes of promoting the interests of the co-operative movement in the country. The reorganization now gives CAK full mandate over the co-operative movement in the country with its roles being advocacy, representation and promotion of the movement’s interests. It will also promote cooperation, collaboration and linkages among co-operatives and stakeholders through networks at local, regional and international levels. Principally, it will promote the development of the co-operative movement and advise the government at national and county levels on co-operative matters, as well as serve as custodian and champion of the co-operative principles and values. It is also mandated to encourage self-regulation and affiliation with regional and international co-operative organizations for the benefit of the Kenyan movement.
Why Saccos are finding it hard to tap youth membership By Bernard Matumbai The urge to splurge out cash on secondary needs is slowly driving the youth away from saving. Savings are considered critical funding sources, which enable governments, institutions and individuals undertake investment projects. Harrison Song’e, the chief executive of Airports Sacco regrets that the younger generation is mostly driven by spending more than savings. This, he adds, has majorly compromised their patronage to Sacco business concept, which is modeled along savings as a requisite step to accessing credit. On his part, Wana-Anga Sacco CEO Vincent Otara, thinks the youth will always want money; not loans, a perfect allegiance to their penchant for instant desires. With only a pay slip and a mobile phone, he says, the youth find no need struggling to save to access credit as is the norm with Saccos, stringent requirements they would deem a complete waste of time. “This generation has been brought up at a time when obtaining credit from
Alloys Aboka, retired EABL Accountant, awards Grace Koki, Tembo Sacco’s youngest top saver banks and other financial institutions look easier and more attractive compared with Saccos,” says Otara. In retrospect, the older generation found banks, from which obtaining a loan was not an easy task. This, it is argued, partly motivated people to come together to form co-operatives.
As things stand now, banks have easier loaning terms; simple, fast and automated processes leading to liquidity within no time. Why should the youth be encouraged to join Saccos, the stringent requirements, thresholds and timelines notwithstanding?
“The trappings that come with being a Sacco member are tenfold,” says James Kanyeki, a financial expert, who likens it to having one’s cake and eating it. “By virtue of being a member of a Sacco, you are a shareholder. You earn a dividend as an owner and interest on deposits as a shareholder,” he says, adding that with a bank, your savings are used to make profits for the bank but you get nothing from that. George Njuguna, the marketing manager of Nyeri-based Biashara Sacco, declares a Sacco gives one more than just an avenue for savings and source of credit. According to him, there is much more than just loans in a co-operative society. Encouraging young savers to embrace Saccos, Njuguna says through free training programmes, members acquire knowledge on financial literacy including sound investment opportunities. A member of senior management staff of a Tier I Sacco, who declined to be quoted for she is not authorized to speak to the Press, had this to say: “You will barely come across anyone who will charge you interest rates lower than what Saccos will. Banks and
shylocks will have you paying dearly in interest.” The youth, generally infamous for living in the present alone, should start saving for the future. “If you do not save, you deny the country a critical mass of savings, the Kenya Union of Savings and Credit Co-operatives managing director George Ototo,” recently said, adding 30 per cent of the GDP is contributed by Saccos. Maintaining Saccos are the single largest employer of the youth in the country and Ototo says over one billion people in the world are members of Saccos. At the height of the Covid-19 economic depression, top leadership in the Sacco sub-sector implored on the youth to youth to join co-operative societies in order to strengthen their economic muscle. Smartlife Sacco CEO Haron Biwott said that the youth find it arduous to the journey of saving as they are able to access instant cash. “For those employed, presenting a pay slip for a loan makes them shun saving and instead go for bank loans,” he said.
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NYANZA
Kisumu County mulls mergers to strengthen cooperatives By Fredrick Odiero
Kisumu County is mulling over the merger of small and uneconomical cooperatives in order to harness their full potential. Chief Officer in charge of Co-operatives, Alphonse Ouya, said though the economic viability of the cooperatives straddles across many sectors, they are however not fully utilized. The sectors include rice, cotton, fish, sugarcane, dairy, and transport. With more than 100 registered non-performing Co-operatives in this sector, Ouya said they are working towards mergers and revitalization of the Co-operatives through an ongoing identification and capacity-building programme across the county. Out of the 634 cooperatives registered in 2021, only 385 can be traced, adding that even those identified were either active or semi-active and dormant. Some of the hurdles affecting the growth of the movement in the region,
according to Ouya, include attitudinal change especially on saving culture, power struggles in co-operatives, mergers of societies and dependency syndrome. He said there still exists a high potential for cotton production in the county and farmers are being mobilized to go back to cotton growing. Cotton stores in the county are still intact and most of the cotton societies have transformed to multipurpose societies so that apart from promoting cotton, though in a small scale including distribution of seeds from AFA, are exploring other areas of diversification. Ouya underscored the need for the groups and individuals to embrace zero grazing, savings, and commercial agriculture and the need by leaders to promote cooperatives in the region. The County Government, he noted, has built members but called on the greater involvement of the political leadership in the entire process of cooperative growth and development. This, he believes, would play a crit-
Chief Officer in charge of Cooperatives at the Kisumu County government Mr. Alphonse Ouya ical role in marketing products such as coffee, sugarcane, rice, dairy products, fish, and cotton. “The county government is promoting dairy farming through provision of dairy animals to members of Co-op-
eratives, among others, milk coolers and freezers for improvement of dairy farming activities” he says. Ouya says the societies have a staff well trained on value addition and is able to make yoghurt. Dunga Fishermen Cooperative Society is one such entity directly involved in fish marketing, buying fish from fishermen alongside other buyers, and then selling to various customers. Ouya says the society’s proximity to Kisumu City provides a good marketing opportunity for the products. The chief officer says that the county government of Kisumu has also secured coolers for Dunga and others like Ogal, Kaloka and Asat. “The Unions also organize training of their members,” he told Sacco Review. The co-operatives, he said, have been supported by partners like FAO and others in plowing and providing farm inputs, rice milling at the National Irrigation Authority (NIA), and giving packaging machines to the societies. Rice marketing was a challenge to the cooperatives as farmers preferred to deal with middlemen who were paying them cash for rice taken where buyers were coming from as far as Uganda. He says most of the rice, instead of being milled at the local mills, was transported by middlemen to other plac-
How liberalization reversed gains in the coffee sub-sector
By Ben Oroko
The liberalization of the coffee sub-sector in the country continues posing a serious sustainability threat to the primary coffee co-operative societies across the country, following smallholder farmers hawking their coffee beans to middle-men and dealers instead of delivering the same to their primary co-operative societies. What started as a bubble in the cup of coffee turned out to be a brewing storm when the Coffee Act No.9 of 2001 was enacted, with majority of the sector's players misinterpreting it to mean a free market economy; loosely translated as 'soko huru' in local the slang. This liberalization perception has prompted many players in the coffee sector, especially producers and middle-men, to view coffee as any other crop despite it being the country's leading foreign exchange earner. The coffee industry in Kenya used to be government-regulated and controlled until its liberalization in the 1990s following pressure from the International Monetary Fund (IMF). It was regulated by the government through the Coffee Board of Kenya (CBK), and the Kenya Planters' Co-operative Union (KPCU), among other key stakeholders whose operations were controlled by the government to enhance efficiency. Under the above arrangement, coffee producers benefitted from three categories of payments; advances, credit vouchers and cash on their coffee produce. It is during that period that smallholder coffee producers enjoyed high prices for their produce as the government controlled production, translating to production of high quality premium
Samples of coffee beans
Liberalization dealt many coffee producers a serious blow since majority of them got confused on what to do under such circumstances in the absence of a governmentbacked advisory and expertise support.
coffee in the market. Liberalization dealt many coffee producers a serious blow since majority of them got confused on what to do under such circumstances in the absence of a government-backed advisory and expertise support. Since then, various industry experts have come out with divergent views on the way forward in the midst of the coffee liberalization storm. From some point, the government made unpopular decisions without conducting feasibility studies to ascertain the impact liberalization would have on the future performance of the coffee sub-sector in the country. In essence, liberalization meant smallholder coffee growers could no longer have control over their own produce following the introduction of marketing agents and coffee millers in the value chain, who to date continue controlling the industry.
Liberalization ushered in the era of mushrooming marketing agents and coffee mills among other various players, whose presence continue compromising coffee prices and production. It is worth noting that the marketing agents come in after a smallholder has grown coffee, milled, graded and classified it, only for the agent to claim between 2 to 3 per cent of the gross sales, which is explicitly exploitative on the farmer. Worse still, the marketing agent is the first beneficiary of the coffee sales, being paid as a conduit, as farmers wait for months for their dues. Listening to smallholder coffee producers at the co-operative societies level, there is no doubt that their feelings are that liberalization of the coffee sub-sector was aimed at reversing the already declining coffee production to cut incomes among the millions of people whose livelihoods depend on coffee.
es for milling, packaging and marketing. “So far the county government has partnered with KNTC to purchase rice from farmers at Shs42,” he stated. Kisumu County, according to Ouya, is among those where cotton production was a major activity that created several on-farm and off-farm employment. He says cotton cooperatives were actively involved in the collection and marketing of cotton to Kibo’s ginnery, besides being involved in the distribution of various farm inputs to the cotton farmers. Cooperative at a glance - Share Capital base 2,216,483,029 - Membership of over 108,979 - 5 active Dairy Cooperatives - Each society collects 150 litres sold at Shs80 per litre - Five active fishermen cooperative societies - Not directly involved in fish marketing - Over 17,500 riders in Kisumu - 15 registered housing cooperative societies -7 active cotton societies and one cooperative union -5 major Saccos licensed by SASRA to operate FOSA - Notable ones include Jumuika, Kite, Agrochem, Koru and Nyando - 9 active rice co-operative societies They argue that liberalization deprived smallholder producers of government field extension services, leading to poor quality coffee production due to lack of expert information services on modern crop husbandry practices. The removal of monopolies in the coffee sub-sector, they claim, has led to increase in illegal coffee trade syndicates and theft because of unregulated market competition. There is a universal opinion from coffee producers that the national government, through the Coffee Board of Kenya, needs to reclaim its lost glory and enhance its visibility in the coffee producing zones. This means more information flow from CBK to the farmers, particularly regarding coffee milling yields, grading, classification, and negotiation of marketing contracts. The initiatives can only be achieved through direct contact with the farmers; extension services should be revived to ensure production of high quality coffee. Farmers also demand timely and regular payments, as well as provision of low priced farm inputs to ease the burden of high production costs.
Coffee beans in sacks ready for sale
JULY, 2022
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KSPC introduces regulation guidelines to root out co-operative quacks By Roy Hezron
Kenya Society of Professional Co-operators (KSPC), a sector professional organization in the cooperative movement of Kenya, has come up with regulation guidelines that seek to root out cooperative quacks. The move is meant to bring order in the Co-operative movement in the country which has accumulated assets to over Sh. 1 trillion; in the spirit of the National Co-operative Policy and the Co-operative Societies Bill as the country marks 100th Ushirika Day on July 2, 2022. According to the Society’s acting Chief Executive Officer (CEO) Symon Mburia, all persons involved in the management of Co-operatives in the country must be members of KSPC. Every Co-operative officer or Co-operative manager will therefore be required to subscribe to a code of professional and ethical standards. “Any non-professional activity by any of KSPC members will be dealt with appropriately through withdrawal of practising licences or other sanctions as KSPC may deem fit,” Mburia told Sacco Review. The acting KSPC boss defends the move, noting that it is intended to inculcate a professional and ethical culture within the sector, therefore improving the face of the sector, hence the sector professionals will receive the respect they deserve and move the sector ahead with confidence. “KSPC will also protect its members against unfair targeting and therefore any of our members doing the right thing need not to worry. This in the long run, will introduce stability and protect the sector from
Co-operative quacks,” added Mburia. The National Co-operative Policy identifies professionalism as a concern that requires to be addressed to ensure sustainable growth of co-operatives. Incidences of poor governance and unprofessional practices continue to be reported from some co-operatives, seriously denting the image of the entire co-operative sector. According to Mburia, the weak governance is characterized by ineffective leadership, micro-management of co-operative societies by the Boards of Directors, unethical business practices, inadequate application of good financial management and lack of effective member participation. Mburia says the cooperative sector has more than 23,000 registered institutions and regulating such a number of institutions effectively may not be practical, hence an industry self-regulation mechanism became necessary for the sector practitioners. “The cooperative sector has more than 23,000 registered institutions; regulating such a number of institutions effectively may not be practical and an industry self-regulation mechanism became necessary for the sector practitioners,” he said. KSPC was registered in the year 2017 under the Registrar of Societies as a non-profit making member-based organization, hence being an industry led initiative to promote professionalism, co-operative philosophy and practice in the co-operative movement. Since its establishment, KSPC has achieved a number of things, including enhancing
Any nonprofessional activity by any of KSPC members will be dealt with appropriately through withdrawal of practising licences or other sanctions as KSPC may deem fit Symon Mburia, Ag. Chief Executive Officer Kenya Society of Professional Co-operators
member recruitment activities whereby it has managed to recruit 415 members. It has also developed a fiveyears’ 2021-2025 strategic plan currently under implementation and developed and reviewed the Certified Cooperative Professional (CCOP) examination curriculum. With concurrence from the Kenya National Qualifications Authority (KNQA), KSPC has also established a partnership with Kenya Accountants and Secretaries Examination Board (KASNEB) through a signed Memorandum of Understanding (MoU) to administer Certified Cooperative Professional (CCOP) exams, currently open to any willing person. Once KSPC builds the required capacity, it will take up the role.
The Society has also managed to develop various policies that include Human Resource Policy (draft), Member Recruitment Policy, Examination Policy Manual; and also accredited various training KSPC Acts, which is pending final stakeholder validation and enactment, and also developed and operationalized various organs of KSPC which include the Registration Board, the Cooperative Academy, the Research and Curriculum Board. In addition, in the general field of management, human resource management, procurement, finance, etcetera, had been institutions to train on the CCOP programme examinable by KASNEB. It has also developed a draft recognized as distinct professions.
Cooperative management previously was not recognized as a profession and therefore those who underwent cooperative training were not considered as professionals and were disadvantaged compared to others. “Analysis of the current situation depicts a sector that has been infiltrated by all manner of ‘consultants’ , many of whom have no basic understanding of the co-operative model, its philosophy, values and practice,” Mburia said. The government has developed various institutional and regulatory mechanisms to promote professionalism and good governance, which include establishment of Ethics Commission for Co-operatives (ECCOs), an industry-based remedy has been identified to be a better option. The Society has managed to hold leader’s conferences and meetings to sensitize members its existence and benefits, carried out continuous professional development activities, Webinars and workshops in order to seek common professional approaches to common challenges. It has also entered into a working relationship with DGRV towards developing various standards for cooperative professionals. Some of its objectives include promoting the co-operative management as a profession, register persons who meet the required professional and ethical standards and issue certificates and establish, publish, and monitor standards of professional competence and practice amongst members, among others.
COAST
Five farmers’ cooperatives registered in Kwale By Tsozungu Kombe Five farmers’ Cooperatives in Kwale County have been registered, Sacco Review has reliably established. Speaking recently in Kwale town, County Deputy Cooperative Director Mr. Mohammed Mkanga told Sacco Review that the
five farmers’ Cooperatives were registered by the County Cooperative Development office recently. Mr. Mkanga noted that many people in the country have been able to accomplish their development projects through taking loans from their Saccos. “The Cooperative
movement plays an important role of uplifting the living standards of people,” said Mr. Mkanga. He urged county residents to join Saccos near them in large numbers and save heavily to enable them get loans to implement their development projects.
Youth in Lamu urged to form Saccos By Tsozungu Kombe
Mohammed Mkanga, Kwale County Cooperative Director
Youth from Lamu County have been urged to form Savings and Credit Co-operatives (Saccos) to raise their living standards. Lamu County Co-operative Auditor Mr. Nickson Baya, who spoke to Sacco Review recently, lamented that many youth in the county are not in Saccos. “There is no single youth Sacco in the county registered by the County Cooperative Office,” he said. He urged them to form Saccos to help them implement their development agenda effectively.
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JULY, 2022 FOCUS ON CO-OPERATIVE BANK SACCO LEADERS’ MEETING IN MOMBASA
Sacco leaders urged to embrace technology for smooth operations By George Otieno Sacco leaders have been urged to use appropriate technology to run Sacco operations so as to spur growth. Speaking during a three day training forum organized by the Cooperative Bank in Mombasa from 27th June to 1st July 2022, Mr. Martin Kimani, an Associate Director in KPMG’s Technology Transformation Unit and a speaker at the forum, told the leaders that technology reaches more ground and keeps up with the ever changing business environment. Kimani said that over 70 per cent of top cooperative leaders have agreed to have an aggressive digital investment strategy and intend to secure first mover or first follower status so as to change their business. “More leaders have realized the urgency to shift investment to digital opportunities and divert from businesses that face digital obsolescence,” Kimani noted. Kimani encouraged the Sacco chairmen, CEOs and their deputies as well as other stakeholders to embrace technology and view it more as an op-
portunity than a threat as more and more people, especially the young and vibrant youth, are in it. The youth represent a huge market Saccos have not been able to penetrate, hence the need to deploy technology to attract them. By employing the right and best technology, considering the everyday technological advancements, the cooperative movement would compete with other financial players favourably. Technology can be deployed to safeguard members’ funds and ensure appropriate measures, policies and infrastructures are put in place to save various societies and cooperatives from falling prey to fraudsters. He advised CEOs and Saccos’ senior management to appoint money Laundary reporting officers who, in close collaboration with the Anti-Money Laundary Unit, would find and seal the weak spots. The reporting officers also guide in the implementation of internal controls to monitor activities and transactions of the business customers and training of the institution’s staff on anti-money laundarying and combating financial terrorism (AML/CFT).
Mr. Saitoti Miaka, Director General at Financial Reporting Center, indicated that Saccos are faced with various challenges on Anti-Money Laundary and Combating Financial Terrorism (AML/ CFT). These challenges include the low awareness of anti-money laundary requirements that make Saccos operate in a state of not exactly knowing what is needed of them to curb the menace. Lack of adequate resources such as manpower with the requisite skill and knowledge for the job and the high cost of compliance experienced especially in continuous training to keep the officers equipped and the expensive IT licences were also other challenges Saccos face. Other challenges include high cost of infrastructure and the nascent legal and regulatory frameworks for anti-money laundary and combating financial terrorism. Miaka noted that the appropriate regulatory and governance framework must be in place to support the ethics of behavior of individuals. He said without individual integrity, even the best regulatory and governance structures can be defeated.
PS Ali Noor giving his remarks
SASRA CEO Peter Njuguna addressing the delegates/ Photo: George Otieno
Group CEO Cooperative Bank Dr. Gideon Muriuki
CAK boss Daniel Marube makes speech
Saccos urged to unite to build a strong movement
By George Otieno
State Department for Cooperatives Development PS Ali Noor Ismail has called upon Sacco leaders to unite in addressing challenges facing them. While addressing Sacco Board of Directors, CEOs and their deputies and other stakeholders at Pride Inn in Mombasa, the PS said the sector was stronger and only functional if players came together to address their unique and shared challenges. The PS identified shared infrastructure as one area that would address their needs as a group. Others areas he highlighted include products and services that would appeal and meet members’ every day needs and expectations. During the national leaders’ conference organized by the Cooperative Bank of Kenya, the leaders explored the way forward to better position Saccos for future business. Due to the enviable role Cooperative Bank has played, Ali Noor urged the leaders to support its goal of helping the societies meet some of their financial obligations. “Cooperative Bank needs your support since nobody will come from outside to support it. 64.56 per cent of it is owned by the cooperative movement,” he said. The PS encouraged the Group CEO Dr. Gideon Muriuki to share the bank’s journey and experiences, through a book, that he and the bank have had over the years. Sacco Societies Regulatory Authority (SASRA) CEO Mr. Peter Njuguna
More leaders have realized the urgency to shift investment to digital opportunities and divert from businesses that face digital obsolescence. Martin Kimani, KPMG. urged the leaders to put up structures to ensure that societies do not collapse in case of financial crises. Societies’ financial turbulence, he warned, could kill investments, hence the need to create the necessary structures to protect them. He identified shared technological platforms and the Deposit Guarantee Fund as some of the systems that will address any emerging needs. “Creation of financial market infrastructures ensures that no member of a cooperative society loses money,” he said, adding that in the event an institution is in trouble, it can quickly be turned around and in one way or the oth-
er, the members do not lose their money. Cooperative Alliance of Kenya CEO Mr. Daniel Marube underscored collaboration between the cooperative sector and the government. He said that the movement has the option of either being confrontational with the government of the day when lobbying for their issues or being collaborative. Marube said collaboration has achieved bigger steps in the sector where government and the cooperative movement work together. “We work very closely with the national government and the county governments through their Council of Governors (COG) for the delivery of the policy and the bill that we hope will be among the first to be discussed in the next government,” Mr. Marube stated. Marube identified SASRA as another key partner they cannot ignore if they are to achieve the intended results. On the upcoming general elections scheduled for 9th August, the CAK boss reiterated that the cooperative movement remains nonpartisan to any political party but would support the government of the day for economic and political stability. Mr. Muriuki gave an inspiring and captivating speech on the bank’s journey to become one of the most trusted financial institutions in the country. He also promised to support Saccos and the cooperatives in their effort to deepen financial inclusion in the country and improve the social and economic status of its members.
Event officials in a group photo. Photo/George Otieno
Delegates at the event
PS Ali Noor, Coop Bank CEO Dr. Gideon Muriuki and a colleague sharing a light moment
34 | SACCO REVIEW
Trouble for Saccos as non-core members seek leadership roles
By Azael Masese
The move by some Saccos to bar non-core members from elective positions has come under sharp criticism even as the government seeks to enhance good governance in the entities. Most Saccos rebranded and opened the Common Bond to allow members from outside their traditional catchment areas to join the Saccos but did not change the bylaws that spell the election of members or delegates to the Board. Some societies cluster original members in group ‘A’ while non-core members are grouped in ‘B’ or ‘C’ and cannot vie for the managerial positions. For example, if a teacher-based Sacco opens the Common Bond and allows farmers, business people and employees of other state corporations to join, only teachers can be in the Board of Directors. So emotive is the issue that other cases have proceeded to court for interpretation. Trans Nation Sacco CEO Luncham Mugambi said the issue is sensitive, hence there is need for players in the industry to rethink. “Non-core membership cannot be stopped from vying since they have a democratic right,” noted Mugambi. He stated that a society cannot say
Sacco members in an Annual Delegates Meeting. Non-core members are now seeking more say in the running of their societies/ File Photo that leadership must come from a particular class, yet they allowed everyone else to join the society. Mugambi admitted that the issue faces the Sacco sub-sector but needs sober minds to address it once and for all. “It would be unjust to deny a busi-
nessman with substantial investment and interest in the Sacco the opportunity to vie because they are not core members,” he said. He noted that the issue was discriminatory in picking leadership to steer the society to the next level, likening it
to throwing out the baby with the bathwater. “You cannot deny a member who willingly joined the opportunity to vie for a particular seat. Since it is voluntary membership and democratically controlled by members, one is free to contest,” he said. Former Stake Kenya Sacco CEO Bridgit Magoko called on the review of the bylaws that bar non-core members from contesting for elective positions. “Some Saccos have classes of membership, which is important for record purposes but not to lock them out from elections,” she said. Magoko, who is currently a cooperative officer in Migori, argues that members with substantial savings both in share capital and deposits stand a better chance to be elected. However, Mombasa Port Sacco CEO Dedan Ondieki said they have given non-core members a chance to elect their own delegates. “The core membership has a number of zones but there is one reserved for non-core membership. The membership could be small but it also depends on how much they contribute to the society,” he said. Ondieki disclosed that the society initially did not have representation from the non-core membership but ini-
JULY, 2022 tiated it. “In case they need two, they need to convince us why,” he said. To be elected as a delegate or Board member in some societies, one must have a minimum savings within the Sacco as high as Shs1.5 million. To entrench transparency and fairness, Saccos have come under closer scrutiny due to the huge resources within their disposal. Sacco Societies Regulatory Authority (SASRA) has ramped up efforts to ensure there is good governance in the societies. During the celebrations to mark 50 years of Tembo Sacco, SASRA CEO Peter Njuguna implored members to put the right leaders in place. Njuguna stated that cooperatives that put the right leaders in office gift themselves. To further improve governance in the societies, the government introduced new requirements where those intending to seek leadership positions must have a minimum education level of Form 4 and conform to Chapter Six of the Constitution on integrity. The new Cooperative Society Bill 2021 indicates that the cooperative sector will have sanity and eliminate corrupt tendencies and gross mismanagement of members’ hard-earned resources by leaders. Once enacted into law, it will address key challenges such as poor governance, leadership wrangles, cybercrime, low technology adoption and poor implementation of current regulations.
OPINION
How to create viable networks for mutual gain
N
etworking, also known as self-marketing or social-marketing, entails circulating in business functions on a social level to create a wonderful web of useful connections. The basic philosophy of networking is ‘living is giving’. The heartbeat of networking is people caring about each other. As Theodore Roosevelt put it aptly, ‘People don’t care how much you know until they know how much you care’. Networking focuses on others - giving, sharing and caring. It is mutual and symbiotic. Ideally, networking is not pushing yourself or forcing people to accept your ideas, products, goods, even services. It is not exploiting people for purposes of personal gain. It is not keeping your eye on everyone you meet with a selfish motive to benefit in future. Networking has several definitions. It is the practice of meeting other people involved in the same kind of work you do so as to share information or to support each other. Networking is about making friends. Some of the people you meet along the way – in school, college, world of work, functions – can be of great help to you in some sense. For anyone you may want to meet or contact is only four to six people away from you. Build personal network In the Careerpedia penned by Muthoni Muchemi and published by Story Moja, people are advised on how to create networks: start building your network while still in school. Meet, greet, interact
and connect with people. Do not fear rejection. Start animated conversations. Take a keen interest in topical issues about the career or industry you are in. Make people who are around you feel important. Make wise use of social media. Network is net worth. 10 Commandments of networking In his well-worded book titled How to Win Your Dream Career: A Self-help Guide to Successful Job-hunting, N.A. Salemi talks about the 10 Commandments of Networking: One, drop the 'what-is-in-it-for-me?' attitude. Two, purpose to network at all time. Three, feed the relationship instead of leeching on it. Four, always carry the networking tools. Five, listen and ask quality questions. Six, give referrals when possible. Seven, follow up on the referrals within 24 hours. Eight, thank, in writing, the person who gives you referrals. Nine, set networking goals in writing. Ten, reply to emails and respond to missed calls the same day. Networking etiquette In order to access success in your networks, you must love and cherish courtesy. When you are with people, be careful not to eat, drink and talk at the same time. Avoid complaining and blame games. Politely ask for someone's cards in case you wish to keep in touch with them. Always carry beautiful business cards but do not be in a hurry to dish them out. Synergy is the strategy
work in harmony with family, friends, friends of friends, colleagues and clients among others. Avenues of networking Avenues to help you network are umpteen like stars in the sky and like sand at the sea shore. You can network in conferences, church, school, events, when traveling, in social gatherings – the list is long. You can also bank on referrals.
Victor Ochieng’ The writer facilitates skills enhancement-cum-development programmes in universities, colleges and churches. He focuses on soft skills, employability skills, transferable skills, 21st century skills and life skills. vochieng.90@gmail.com. 0704420232 Dr Stephen R. Covey - in his book titled the 7 Habits of Highly Effective People -posits: Highly effective and successful people are neither dependent nor independent. In fact, they are inter-dependent in nature. They are not islands or leeches. They are like colonies where members interact with each other freely without restraint. They support, integrate and coordinate with each other. Synergy is the name of the game. Synergy is their strategy. For anyone to survive and thrive in the job market and private practice, one must know how to
Networking tools Always have the following networking tools: wear a mile-wide smile; be ready with your business cards; have scintillating topics of conversation; have precise self-introduction; have goals and objectives and make significant telephone calls. What’s more, cordially invite people to useful events; learn to appreciate and acknowledge others; have an attitude of gratitude; be sympathetic and empathetic; express love and largesse; give occasional voluntary service, learn to give back to the society and, have a pleasant personality. The 7 P’s of networking One is people, writes Pepe Minambo in his best-selling book titled Go Beyond Limits. It is about people, people, people. Two things define you: the books you read and the people you meet. Two, passion. To succeed in networking, you must be passionate about what you do. Three, keep on promoting yourself, your ideas, products, goods and services. Marketing is not done just in a day.
Consistency is key. Keep telling people you exist. Four, power. Powerful networking is all about results and relationships - effectiveness and efficiency; assertiveness and graciousness; patience and persistence. It is all about building business and building bridges. Living and giving. Receiving and caring. Trusting and requesting. Five, planning. Mark your calendar. Develop your purpose. Failure to plan is planning to fail. Six is preparation. Prepare scintillating stories to talk about. Be updated. Read at least one newspaper each day. Read newsletters, magazines, professional journals, periodicals and books. Employ mature sense of humour. Most people enjoy humour that is timely and comely. Seven is participation. Enter the room with a graceful gait, head held high. Check on your poise and posture. Manifest a positive attitude. Stand out, stand tall. In his book titled Become Your Excellency, Joseph Obwanda says: In this world, stand. When the world stands, stand out. When the world stands out, outstand. Reasons why some people don't network Lastly, there are countless reasons why some people choose not to network. These include fear of rejection; the fear of being perceived to be weak, needy, inept or incompetent, fear of wanton wastage of time, fear of being perceived to be pushy or aggressive, low self-esteem, the big man syndrome, know-it-all attitude, big ego, pride and pomposity.
JULY, 2022
SACCO REVIEW | 35
RIFT VALLEY
NCCK trains transport sector Sacco leaders on peace By Peter Otuoro National Council of Churches of Kenya (NCCK), has trained transport sector Sacco leaders in Nakuru County on the importance of peace and cohesion. NCCK South Rift Acting Regional Manager David Njuguna said it is only through peace that all transport sector Saccos can operate successfully and yield good returns. Addressing matatu and bodaboda Sacco leaders during a one-day peace workshop in Jumuia Hotel in Nakuru City, Njuguna said as NCCK, they want the ongoing political campaigns to be conducted peacefully so as not to disrupt the sector activities because of its immense contribution to the South Rift economy. “Thousands of Kenyan youths are members of transport sector Saccos and thus to train their leaders on importance of peace and cohesion in the South Rift
WESTERN By Shichangi Richard
Transport sector Sacco leaders follow proccedings during a peace workshop organized by NCCK South Rift region in one of the hotels in Nakuru City Elistus Mbui, Nakuru County Director region will make them peace ambassadors who will contribute to the growth of Sacco activities,” said Njuguna. He warned them against being used by politicians but encouraged constructive engagements that can improve the Sacco economy.
“Draft good proposals, submit to your leaders and ensure they implement when they enter state offices so that you can have a gain-gain relationship with them,” said Njuguna. Njuguna, who was flanked by Nakuru County Director Elistus Mbiu, told transport Sacco leaders to live peacefully and work with all communities as brother and sisters.
On his part, Nakuru County Commissioner Erustus Mbui told transport Saccos to adhere to government rules and regulation governing Saccos in Kenya. “All transport sector Sacco leaders should ensure they strictly operate within the laws that govern their Saccos,”said Mbui.
Mobile App tops list of Wevarsity Sacco’s growth strategy
Wevarsity Sacco has prioritized mobile banking service to turn around their growth and enable members to access their accounts without physically visiting the Sacco premises. This has provided unlimited service where members can withdraw and save at any time of the day. While addressing members recently, Sacco chairman Dr David Alilah said they were proposing to increase the limit of mobile banking transactions to 50,000, urging members to shun panic withdrawals as their money was in safe hands. He added that the Sacco had embarked on intensive marketing where more members were recruited into the Sacco, and that the Christmas and education savings increased by 121 and Dr David Alila, Wevarsity Sacco Chairman 102 respectively. The Chairman observed that their Directors took over six month ago. He Public Relations and Marketing Depart- observed that they had registered imment was created to enhance handling provement in key areas such as mobile of members’ affairs effectively and in a banking and development of mobile timely manner for efficient service de- Apps, marketing, product amendments, livery. micro finance and reduction of loan deHe said that the Sacco had record- faults. ed a steady growth in most of its operThe Chair revealed the products ations ever since the current Board of
they had amended, including splitting the savings products to three; Akiba savings, fixed deposit and golden savings; noting that the readjustment will provide competitive data and urged members to save with them. He said that Maliza Mradi products were to have their repayment periods extended from 60 to 72 months to relief loanees in this difficult economic period. “The mobile App will provide members a one-shop stop where they can access their loan statements, repay loans and check their guarantors status, as well as apply for loans at their convenience. The Sacco has introduced other App services such as mobile salary advance payable in one month and super mobile salary advance to be repaid in three months,” said Alilah. The chair also said that plans were at an advanced stage to launch micro finance services, saying proposals have already been forwarded to SASRA for approval. He further noted that the Sacco had reduced defaulting rates from 16
to 8 million. The Chair, however, noted that Sacco operations had been hit by liquidity hiccups compounded by members changing their pay points. Addressing members, the Sacco treasurer Evans Nandasaba declared interest on members deposits and dividends on members Share Capital and Plaza Share at the rate of 7 per cent on pro rata basis, which translate to a total payout of 18,721,136 as interest on members deposit and 2,568,418 as dividends on Share Capital and Plaza Shares respectively. The chief guest County Cooperative director Ben Kangale urged members to borrow wisely and introduce small societies back at home so that they can benefit from a 20 million grant the County Government of Kakamega was giving to small societies in the dairy, poultry and horticultural industries. Also in attendance was Sacco CEO Mrs Rahema Atieno and other Board members and invited guests.
Bungoma residents advised to take up responsibilities in cooperative sector
Director of the Cooperative societies in Bungoma County Mr Stanislaus Wambani By Bulimo Mathews Achola Bungoma County Directorate of Cooperative Societies Development has asked residents to take part in the cooperative activities across the county. Speaking to the press in his office,
the director of cooperative societies Stanislaus Wambani asked people to participate actively in the running and management of the cooperative societies in the region by first enlisting as members. He said that agriculture was dominated by old people, and so the youth must step forward to carry the development mantle of the cooperative sector. "There is a deliberate effort through government policy formulations to bring the youth to the table through election to Board positions,” he said. Wambani also said land ownership in the county was largely a preserve of the older generation, inviting the young people to engage in various activities in
the value chain through coffee collection, especially in Chesikaki areas. "Different cooperative societies have set up coffee collection centres. The youth can help in coffee picking and transportation to earn a living,” Wambani added. The director highlighted that the county has 153 registered cooperative societies, each having an average of 3,000 members, with Ng’arisha Teachers Sacco having more than 12,000 members. “The cooperative sector in Bungoma County is growing, with coffee production yielding Shs1.3 billion,” he remarked, adding that the government has aided the cooperative societies in
policy formulation, enhancement of earnings through budgetary allocations, and provision of extension and marketing services to farmers. Enumerating how the cooperative societies have contributed to development, he said they had helped in infrastructural support and creation of employment opportunities for residents, adding that despite all the achievements, they had faced various challenges, including poor governance due to poor business skills to run the cooperative societies. “We are aiming to start a cooperative development fund to address some of these challenges and enhance liquidity,” he said.
WESTERN
Youth urged to join Saccos, accede saving culture By Fredrick Odiero Cooperative Alliance of Kenya (CAK) Executive Director Daniel Marube has called on Kenyans to cultivate a saving culture by joining Saccos. Marube urged young people to invest in Saccos since there is life after retirement. He posited that the cooperative movement is a key contributor to Kenya's economic growth. "The cooperative movement contributes up to 45 per cent of Kenya's total GDP and boast of 13 million members who directly or indirectly derive their livelihoods from the sector. This shows the importance of the sector in financial inclusion and attainment of the Vision 2030," asserted Marube. The CAK boss was speaking during IG Sacco’s recent Annual Delegates Meeting (ADM) held in Kisumu where he was the chief guest. He said due to the growing membership in cooperatives, Saccos needs to develop new
IG Sacco Chairman Kennedy Keya with CAK CEO Daniel Marube services and products to meet the evolving demands of the cooperative sector and serve customers effectively. Marube lauded the move by the IG management to focus efforts on growing its membership and capital base, while maintaining a high level of professionalism in its service delivery. IG Sacco Chairman Kennedy Keya said the Sacco had recorded an upsurge in membership despite the Covid-19 pandemic. “We still observe there are so many potential members out there we have not recruited,” Keya said. The Sacco targets at least 2,400 members annually. Last year, it recruited 1,575 members as compared to 834 in 2020.
Sacco Review JULY, 2022
By Bernard Matumbai The emergence of Cooperative societies years back may not have been accidental. A century later, Saccos have grown full circle, rattling traditional financial players to the core. 1908 was the launching pad of a movement that would later culminate in a vibrant Sacco sub-sector, giving commercial banks a run for their money. This was the year the first cooperative society – a dairy Co-operative - was established in Kenya. However, it was not until 1931 that the government first formally got involved in co-operative activities when the inaugural Co-operative Ordinance was enacted to regulate the sector’s operations. According to the Sacco Societies Regulatory Authority (SASRA), the government agency mandated to regulate Saccos, there are 175 licensed Deposit-Taking (DT) Saccos in Kenya today. Tellingly, the larger co-operative movement in Kenya presently has an asset base of about Ksh1.3 trillion, according to Commissioner of Cooperatives David Obonyo. In SASRA Chief Executive Officer Peter Njuguna’s estimation, the DTSacco sub-sector had, over time, grown its asset base to Ksh628 billion as at December 31, 2020, a mind-blowing milestone by any standard. A growth trajectory at its best, this could positively be compared to the Ksh556.7 billion recorded in the previous year, a 12.8 per cent jump and an unstoppable momentum which appears to slay the ghosts of the Covid-19 pandemic. In the same period, the sub-sector’s total deposits grew by 13.4 per cent to reach Ksh431.4 billion up from Ksh380.4 billion. DT-Saccos also reported an increase in the gross loans to Ksh474.8 billion in 2020, a 13.2 per cent growth from 2019, while net loans and advances grew by 12.6 per cent to reach Ksh450.6 billion. The performance of DT-Saccos, barring the calamitous consequences of the pandemic, is a pointer to a deepening financial alternative raring to level up with the big boys – commercial banks. Even as the banks - more so listed lenders - take their exploits to unassailable heights, industry players
Mixed reactions to increased bonuses for tea farmers »» Page
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Sacco leaders urged to embrace technology for smooth operations »» page 33
How Saccos will upstage banks on lending niche
The establishment of Saccos a century ago was not accidental. These financial institutions have grown full circle, rattling traditional financial sector players to the core. The performance of DTSaccos,barring the calamitous consequences of the pandemic, is a pointer to a deepening financial alternative raring to level up with the big boys-commercial banks.
Inside County Sacco banking hall contend that DT-Saccos are fast catching up. Though DT-Saccos can be said to be playing catch up to the banks (DTSaccos’ Ksh628 billion balance sheet pales in the banks’ Ksh5.4 trillion as at December 31, 2020), their upsurge in innovation, leverage on technology, easy access to less costly loans, and flexibility in recovery of members’ debts are tilting the scales the cooperatives’ way. What then, is the ‘state of the shilling’ vis a viz the intensified onslaught by Deposit-Taking Saccos in renewed rush for customer deposits, loan book and balance sheet, 100 years later? Airports DT Sacco CEO Harrison Song’e believes co-operative societies have been slowly eating into commercial banks’ territory; a reality anchored on the latter’s rigidity in doing business. “It’s real; most bank loans are secured by collaterals yet most people lack assets, hence the marketability
of Sacco products where only guarantorship is used,” says Song’e, adding that the ease at which credit facilities are accessed and the Sacco ownership concept combine to make DT-Saccos tick. On the forceful impact DT-Saccos have occasioned on the financial market, the CEO agrees that most Saccos have deliberately invested in ICT infrastructure and that they are offering products that compete with credit facilities offered by commercial banks. “By offering more innovative products, Saccos may command a bigger financial market share in the near future,” he concludes. The CEO avers that through good management, best practices and regulations, Saccos are offering competitive returns to their members. However, Song’e’s counterpart at Wana-Anga Sacco Vincent Otara has a divergent opinion. Noting that banks are now offering similar products to those of Saccos,
Otara feels the perceived migration in patronage is two-way. “Saccos are offering same products as banks. We are chopping off their space and so are they; busy eating into ours,” the CEO said. Otara believes banks, with their bottomless pockets, would easily prevail over co-operative societies. As if to yield to the banks’ unassailable market dominance, the CEO says majority of Sacco customers are small savers, hence a diminished market segment. Citing government-based Saccos like Wana-Anga, Otara bemoans their zero-sum ability to recover defaulted loans as opposed to banks. Charles Musungu, the Hazina Housing Co-operative Society chairman, says he once predicted that commercial banks will become obsolete in 50 years. Giving what he terms ‘an honest view’ of the prevailing dynamics, Musungu exudes confidence that the co-operative sector would in future leapfrog commercial banks. “The societies’ capacity and the role they play in the national economy are reason enough to foretell a cooperativesled financial sector,” he enthused. On his part, a veteran co-operatives activist who chose to remain anonymous decries the ‘briefcase way of managing Sacco affairs’ at the expense of professionalism. Speaking to Sacco Review on phone, the outspoken official took a swipe at elected officials – Boards, supervisory committees and other committees for acting irresponsibly and ‘interfering with the profession’ to curtail efficiency. “Saccos are quietly being exploited, with unjustified costs on the societies that are largely MSMEs (Micro Small
Embrace saving culture, Kenyans urged By Kage Njoroge Kenyans have been advised to embrace a saving culture to enable them get adequate funds for sustainable investments. Speaking during the reopening of the refurbished Kirwara branch of Amica Sacco, Bishop James Wainaina of Murang’a Catholic Diocese said the best formula for ordinary people to tackle poverty is to save and invest wisely. He remarked that financial growth is important for Christians to enjoy a good life. SHREND PUBLISHERS
He noted that the Covid-19 pandemic impacted the people negatively, forcing many businesses to incur huge losses. “Despite the challenges of the global pandemic, Kenyans are determined to move on and confront the emerging issues with courage,” he said. The bishop called on the management of Amica Sacco to develop quality financial products and services which will address various needs of different consumers. “Innovative products will attract new consumers,” he said. He also
Bishop James Wainaina of Murang’a Catholic Diocese
urged the leaders to observe high standards of integrity and make the Sacco a blessing to the shareholders and stakeholders. “I’d like to urge the Sacco management to support smallholder farmers to grow value chains so as to get more benefits from their labour,” he said. The bishop urged local residents to support the Sacco by patronizing its products and services. Amica Sacco Chairman Hezron Maina Muchiri noted that the Sacco is continuously addressing the needs of different clients and that the Sacco
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and Medium Enterprises),” he says, adding that the mess is perpetuated by incompetent holders of elective office with no professional knowhow on technical issues. He strongly suggests that elected committee members should leave the professional staff to manage the affairs of Saccos. On a less radical tone, the vocal official calls for the spreading of training to both professional staff and elected officials, noting that many Sacco chief executives are victims of suppression by their respective chairpersons. Critics have variously argued that Saccos are sound financial partners offering preferential services, with a little cherry to boot, including friendlier interest rates. Experts and scholars alike agree that putting one’s money in a Sacco offers them the opportunity to save while investing. In the Sacco model, savings added to one’s share capital births an investment opportunity in the form of dividends paid out in cash every single year. What’s more, virtually all credit facilities are redeemed on a reducing balance, offering the much-needed relief to the debtors. Saccos across board position themselves as more accommodating in their debt collection than banks, making them a good option during harsh economic times. Proponents of the Saccos’ way of doing business also contend that Sacco loans come with no hidden costs that assume faces like insurance fee, processing fee, account maintenance commission, accrued interest charges, late remittance charges, and premature loan clearance charges.
has laid out plans to reach many regions in the country. Sacco CEO James Mbui disclosed that the Sacco had decided to use digital technology to serve its clients. Mbui pointed out that the Sacco had embraced digital-driven banking and its products and services are available on digital platforms. “Over 60 per cent of our active clients are currently transacting their business on our digital platforms,” he proudly announced. He added that Amica Sacco had developed a strategy to build the capacities of the clients to empower them to grow their enterprises and generate wealth.
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