Chairman’s Statement

On behalf of the Board of Directors, I am pleased to present the Annual Report and audited Financial statement for the year ending 31st December 2019.

Economic Review

The year 2019 presented the most challenging period for Kenyans in general with the economy worsening and the inflation rate in the second Quarter of 2019 growing by 47% to 5.9% compared to the previous year the same Quarter where inflation was at 4%. This was driven by the rising food prices which was mostly affected by the bad weather conditions witnessed in the country. Weighted interest rates on commercial banks loans and advances declined to an average of 12.48 per cent in the first half of 2019 from 13.22 per cent during a similar period in 2018. This was due to reduction of Central Bank Rate (CBR) by 50 basis points. The Kenyan currency remained steady supported by resilient inflows from service exports, diaspora remittances as well as lower imports.

The Co-operative Sector Overview

Despite the challenges noted above, the SACCO sector continued to play its key role of promoting socio-economic welfare of members with minimum hindrances. However, the Society experienced a very high default rate in loans which could be attributed to the tough economic times experienced all over the country. The Society is however committed in ensuring that the recoveries are promptly and accurately done to mitigate against any major loss. Performance Overview

The Sacco has continued to witness a steady and sustainable growth in the past one year despite the challenges outlined above. Interest on loans and advances increased by 5.95% compared to the previous year. The SACCO recorded 10.4% increase in total assets with members’ deposit and loans growing by 10.3% and 6.5% respectively. Interest on members’ deposits proposed increased by 1.7% while proposed dividend on share capital grew 1.35%. The Society also witnessed an improved core capital and institutional capital which improved by 15.5% and 7.8% respectively while share capital grew by 24.3%. Our loan delinquency grew abnormally by a margin of 586% and this is explained by the introduction of a new International Financial Reporting Standard (IFRS) 9 which took effect as at 1st January 2019.

Future Outlook

The Society continues to be focused towards attainment of our vision through commitment to deliver value to all our stakeholders: members, employees, regulators and the communities in which we work in. To this end the Society has invested in creating a simpler organization with clearer roles and responsibilities that will enable more collaboration to increase efficiency and strengthen all our relationships. In conclusion, I want to take this opportunity to extend special thanks to our members for your continued support as well as the Board of Directors, the supervisory committee, delegates and members of staff for helping us keep the promise to our members

Isaac Kiprop National Chairman