Universities release Sh587 million to Saccos

Using dUbioUs means to pay dividends is wrong

Members of co-operative societies expect their investments to earn them good returns. However, some societies are doing everything possible to appease members. Some engage in the falsification of financial statements or what is popularly known as the cooking of books of accounts. This is perturbing, especially in this era where institutions are expected to be more accountable, transparent, and uphold good governance. Saccos, in particular, must stop window dressing their books to declare pleasant profit to their members. It is more worrying when some Saccos are accused of engaging in 'overvaluation' of their assets, primarily land, building, office equipment, furniture, and fittings, in order to have a glossy balance sheet that can enable them to access credit facilities from other financial institutions such as banks which paints a completely different picture of true state of affairs of their books of accounts. Dividends and rebates are good, but institutions should not borrow or lie to hoodwink members.

Pauline Njenga, Nakuru

Hi, Co-op News; you are doing a great job. I like visiting your website from time to time. @Cat De Wahinya

Co-operatives are important for economic development. Thanks, Co-op News, for keeping us updated @Odera George

Your last edition was informative. It was amazing to see my Sacco featured among the top-performing Saccos. @Terer Gibson

Gaurantor-ship is a major issue for many co-operators. Therefore, I am glad that you covered the topic. @Lisabeth Tiffany Kabui

I was elated to see how my Sacco compared with others in paying dividends. @Calvince Agutu Ogembo

Editor welcomes articles, commentaries and photographs for publications. Send to info@co-opnews.co.ke

A COMPREHENSIVE CO-OPERATIVE JOURNAL

INSIDE

Are Kenyan Saccos safe?

Men dominate Co-operative Leadership

ISSUE NO. 2021001 JANUARY 2021 KSHS 150

Sasra bars briefcase outfits from using “Sacco” name

New search for Woccu President and CEO starts

KENYA'S CO-OPERATIVE MOVEMENT SUCCESS STORY

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A COMPREHENSIVE CO-OPERATIVE JOURNAL

INSIDE

ISSUE NO. 2021002 MARCH-APRIL 2021 KSHS 150

List: Saccos paying high dividends, rebates

Inside new KSPC’s Co-op management professional standards Is guarantors’ law a threat to Saccos?

Survey: Co-ops spend over Ksh200m in legal fees

A COMPREHENSI MAY 2021ISSUE NO. 2021003VE CO-OPERATIVE JOURNAL Read these stories and more: KSHS 150

INSIDE

Kenya's wealthiest Cooperatives revealed

Saccos paying high dividends

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SASRA:

Sacco fraud cases, insiders' job

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THE BEST PAID SACCO CEOs IN KENYA

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highlights

4

Full in tray awaits new SASRA CEO

Universities release Sh587.2 million to Saccos

Non-compliant BOSA Saccos face suspension

Is term limit in co-ops leadership good?

6

8

16

21&26

Govt targets unregulated Saccos

New regulations to rein in on pyramid schemes

28 Tea growers earn Sh734m

31 Cabinet approves Ksh100bn Sacco inter-lending facility 38 Meet Women CEOs driving change in Saccos 44 How to be innovative in your organization

33

Saccos get Ksh150m for mortgage lending The Sacco Societies Regulatory Authority mandate is getting bigger with more Savings and Credit Co-operative Societies now under its watch. This is a good thing for the sector, which more often is invaded by crooks who fleece Kenyans through all manner of promises. However, with the Authority's new Chief Executive expected to be confirmed soon, SASRA must ensure the gains realized in the Sacco-subsector are not washed down the drains. Our major focus is on the Saccos' regulator, which will now have over 250 more Saccos to supervise from June 30th, 2021. Data indicates that about 400 out of a total number of 3,626 Non-Withdrawable Deposit-Taking Saccos meet the new regulatory requirements. Non-deposit-taking Saccos command a membership of 1.5 million with a portfolio size of Ksh 188.02 billion.

The expanded supervision of SASRA is timely. Ethics and Anti-Corruption Commission recently revealed it had received 372 complaints on allegations of corruption and unethical conduct, 27 reports touching on Chairpersons and CEOs in co-operatives. Cooperatives Sector plays an integral role as a driver of economic growth, contributing about 30 per cent of the national savings and employing more than 500,000 Kenyans directly and another 1.5 million indirectly. This must be safeguarded; we tell you why and how to identify entities masquerading as Saccos to steal from you.

The Kenya Mortgage Refinance Company (KMRC) has disbursed Ksh 2.76 billion to mortgage lenders, with Saccos such as Stima DT, Tower, Bingwa, Kenya National Police DT, Mwalimu National, Safaricom, Ukulima, Imarisha, Unaitas, Imarika, and Harambee, benefiting. Read how Saccos are helping members own homes. Enjoy comprehensive and indepth articles about the co-operative sector in Kenya, Africa, and worldwide. If you are looking to understand the trends, achievements, challenges, and emerging issues in the Cooperative sector, Co-op News is your magazine: authoritative and comprehensive journal Editor Natalia

managing editor

Natalia Lyn

sub-editor

Munene Maina

head of Business

Joy Atieno

Writers/Business executives

Peter Njoroge, Ken Wesley, Shantel Nafula, Joseph Maina Tim Okundi, Peter Kinyanjui, Faith Muema, Faith Musyoka

Distribution

Edward N. Oyende

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Expanded mandate tops full in-tray for new SASRA CEO

By Staff Reporter

John Mwaka left Sacco Societies Regulatory Authority (SASRA) Chief Executive Officer post, opening the stage to search for his replacement.

In the meantime, this powerful post is being held by Peter Njuguna, who has been a manager in charge of supervision at the regulatory body.

It is still unknown who will be confirmed as the next CEO at SASRA. Uncharacteristically, Mwaka has been silent on what transpired at SASRA and his next move.

During his last days at SASRA, Mwaka was forthright, calling for strengthening governance within the Sacco sector to improve accountability and transparency.

With a shrinking budget and allocation from National Treasury, Mwaka pushed for an increase in the Sacco Levy despite stiff opposition from industry lobby groups such as the Co-operative Alliance of Kenya (CAK) and Kenya Union of Savings and Credit Cooperatives (KUSCCO).

Deposit-Taking Saccos that run FOSAs were from 2020 required to pay more levy SASRA.

This follows a ruling by Judge Weldon Korir that found that amendments to the Sacco Societies Deposit Levy order were done in consultation with all stakeholders, hence could not be quashed or faulted.

SASRA, through a notice signed by Mwaka, increased the Sacco levy from 0.1 per cent to 0.125 per cent. It will then increase to 0.175 per cent.

The new levy is paid based on deposits held in any Deposit-Taking Sacco Society that operates a FOSA, at the rate of 0.175 per cent of the Total Deposits as indicated in the last audited financial statements subject to a maximum of Ksh 10 million per annum.

According to the Sacco Societies Levy Order, 2016, signed by Mwaka, then still Chief Executive Officer of Sacco Societies Regulatory Authority.

Mwaka argued that the move by SASRA to increase the Sacco levy was informed by dwindling financial

sasra acting ceo peter Njuguna

The new levy is paid based on deposits held in any Deposit-Taking Sacco Society that operates a FOSA, at the rate of 0.175 per cent of the Total Deposits as indicated in the last audited financial statements subject to a maximum of Ksh 10 million per annum.

support from the Exchequer to funds its budget and operations.

Figures indicate that funding from the state to SASRA, a parastatal, has been declining in recent times..

Mwaka has been struggling with a shoestring budget to build SASRA's capacity of the technical staff to benchmark with the rest of the world. "Saccos are expanding so fast, and so is risk exposure to members' deposits," said Mwaka while pleading with stakeholders to approve increments in the Sacco levy.

Also on Mwaka's scorecard is the number of DT-Saccos whose licenses were withdrawn after failing to meet stringent licensing requirements, including the giant Moi University Sacco and Nitunze Sacco in Mumias.

Some Saccos that have been on

Change of guard at SASRA as succession begins

SASRA's watchlist include Ainabkoi, Goodhope, and Kenya Midland, among others.

Mwaka's departure is reminiscent of his predecessor Carilus Ademba, who left the regulatory body after the former Cabinet Secretary for Industry, Trade, and Co-operatives Adan Mohammed failed to renew his tenure.

This is even after the board reportedly recommended for a renewal of his tenure contract at the Authority.

Ademba had only served one term at SASRA before his tenure came to an end.

The SASRA board immediately embarked on the process of recruiting the next chief executive at the Authority.

Mwaka, who was then the manager in charge of policy, research, and development at the Authority, was appointed in acting capacity to replace Ademba, whose term came to an end in April 2015.

This is after serving the Authority for one term, having first been appointed by Joseph Nyagah, the then Minister for Co-operative Development and Marketing in the Kibaki administration.

Mwaka has over 20 years of institutional development experience and is an expert in co-operative development, planning, and change management.

He has been involved in institutional development, strategy formulation, planning, and analysis of both planned and existing organizations.

Mwaka is an accomplished professional in institutional design and rural finance development. He has advised and trained co-operatives to create profitable and sustainable financial institutions on a Pro-Bono basis.

Mwaka previously worked for the Ministry of Cooperative Development and Caltex Oil (K) Limited.

SASRA is a Semi-Autonomous Government Agency under the Ministry of Agriculture, Livestock, Fisheries and the State Department for Co-operatives.

The Authority was established under the SACCO Act 2008 and inaugurated in 2009 to license all DT Saccos. This mandate has since been

john mwaka, outgoing sasra ceo

expanded to include supervision on non-deposit-taking Saccos.

SASRA has been ensuring that Sacco members' interests are protected, making sure there is confidence in a sector that has been hit by poor governance and theft of funds belonging to the public. Interestingly, Peter Njuguna, until now, Chief Manager-Sacco Supervision at SASRA, was expected to take over from Ademba given the profile and immense power enjoyed by his docket.

Njuguna has an MSc. in Operations Research from the London School of Economics, UK, and a BSc in Mathematics.

He has ten years of experience from the financial sector that he brings to SASRA, having worked with the CBK, NBC Kenya, CIC Insurance, and the World Council of Credit Unions.

Njuguna has been driving the process of licensing deposit-taking Saccos, monitoring and evaluating the performance, and conducting a review and improvement of policy, regulatory and supervisory frameworks.

His department has also been doing on-site and off-site surveillance and enforcement of compliance with the regulatory requirements, investigating and enforcing cases of violation against regulatory requirements in line with the Sacco Societies Act 2008 and regulations and analysis of data and information.

The Authority was established under the SACCO Act 2008 and inaugurated in 2009 to license all DT Saccos. This mandate has since been expanded to include supervision on nondeposit-taking Saccos.

Universities release Sh587.2 million to Saccos

By staff reporter

It is a relief for Savings and Credit Co-operative Societies (Saccos) after public institutions started clearing unremitted members money.

According to the Kenya Union of Savings and Credit Co-operatives (Kuscco), public institutions owe Saccos about Ksh 4.3 billion.

Egerton University, Kisii University and the University of Nairobi have released over Ksh587 million Saccos' dues that the institutions had failed to remit due to liquidity challenges.

George Ototo, Kuscco Managing Director, said universities, county governments and parastatals owe a large chunk of the unremitted money.

Chuna Sacco received payment of Sh275.9 million from the University of Nairobi, while Egerton Sacco was paid Sh5.3 million by Kisii University and Sh306 million by Egerton University.

Remittance of statutory, loan and members' deductions to Saccos and banks is a mandatory employer obligation, but many fail to affect operations in many Saccos.

In 2019 President Uhuru Kenyatta directed all government agencies to remit all Sacco deductions. Kuscco had in March called for stringent measures to save Saccos that are staring at a severe liquidity crisis.

Ototo, who spoke during the 6th Annual Sacco Leaders Convention, said universities, counties, and water firms have defaulted in remitting the money-making the situation worse for Saccos that were also hard hit by the Covid-19 pandemic. "State agencies should be compelled to release statutory deductions owed to Saccos by all means to safeguard the gains made in the subsector," he said. "There should be no excuses. The county governments should pay outstanding remittances inherited from the defunct county, municipal, and

john munuve, sasra chairman George ototo, Kuscco managing Director

town councils."

Sacco Societies Regulatory Authority (SASRA) had also raised concerns noting that Public Universities and Tertiary Colleges owed over 74% of the total non-remitted deductions in 2019.

It stated that these employer institutions serve five key DT-Saccos with a huge membership. "It is therefore apparent that the financial operations, service delivery, soundness, and sustainability of these DT-Saccos, will continue to be hampered in the immediate to short term unless the trend is drastically changed," said John Munuve, Chairman, SASRA Board of Directors.

SASRA warns non-compliant BOSA Saccos

sacco societies and officials who fail to comply are liable to suspension or pay financial penalty

sasra acting ceo peter Njuguna.

By correspondent

As the clock ticks towards the 30th June 2021, the deadline when all Non-withdrawable Deposit-Taking Saccos with deposits above KSh 100 Million will be put under the supervision of the Sacco Societies Regulatory Authority (SASRA), the regulator has insisted that there will be no extension for those who fail to meet the compliance timelines.

In a notice signed by Acting SASRA CEO Peter Njuguna, dated May 6th, 2021, the regulator insists that the period for submission of applications for authorization shall not be extended whatsoever as it is prescribed in the regulations 2020.

Available figures indicate that only 400 out of a total number of 3,626 Non-Withdrawable DepositTaking Saccos meet the new regulatory requirements. In total, SASRA estimates that these Non-Withdrawable-Deposit Taking Saccos have a total membership of 1.5 million with an overall balance sheet size of Ksh 188.02 billion, with Total Deposits and Loans at Ksh140.54 billion and Ksh136.89, respectively.

The new rules cover those in the non-withdrawable deposits business, with deposits, is equal to or exceeds Ksh 100 Million.

Also covered are the big BOSAs that mobilize membership and subscription to their share capital from persons who are residents outside Kenya or diaspora Saccos. There are also those large BOSAs that operate through digital or other electronic payment platforms, also known as virtual or digital Saccos.

The Regulations 2020, which took effect from January 1st, 2021, now require all engaged in the BOSA business to secure compliance by applying to SASRA for authorization within six months ending June 30th, 2021.

The SACCO SOCIETIES (NON- WITHDRAWABLE DEPOSIT-TAKING BUSINESS) REGULATIONS, 2020 defines non-withdrawable deposit-taking Sacco as a Sacco Society whose business is strictly limited to the receipt of non-withdrawable deposits from members and which deposits are not available for withdrawal for the duration of the membership of a member in a Sacco society. These deposits may be used as collateral against borrowings and domestic money transfer services only.

All BOSAs will be required to maintain a core capital which shall comprise of not less than KSh 5 Million, not less than 8% of the total assets of the Sacco Societies: provided that at least fifty per cent of the core capital shall be composed of retained earnings and disclosed reserves. The law also requires the BOSA to have not less than 5% of the total non-withdrawable deposits held on behalf of its members.

Where a non-withdrawable deposit-taking Sacco fails to maintain its capital adequacy requirements, in addition to sanctions provided under section 51 of the Act, the Authority may suspend the Sacco society from lending and investment, acquiring any additional land or buildings; or from accepting further non-withdrawable deposits or other lines of credit.

A non-withdrawable deposit-taking Sacco society or the relevant officer of the Sacco society that fails to submit a return on capital adequacy as required shall be liable to pay to the Authority a financial penalty not exceeding KSh 50,000.

A BOSA that fails to maintain the required liquidity ratio will be suspended by the Authority from lending and investing, taking new nonwithdrawable deposits, acquiring additional non-core assets or declaring dividends, paying bonuses, salary incentives, or any other discretionary compensation to officers of the Sacco.

Also covered are the big BOSAs that mobilize membership and subscription to their share capital from persons who are residents outside Kenya or diaspora Saccos. There are also those large BOSAs that operate through digital or other electronic payment platforms, also known as virtual or digital Saccos.

Explainer: Regulation of Non-Deposit Taking Societies

The government, in May 2020, published the SACCO Societies (Non-Deposit Taking Business) Regulations, 2020, through Legal Notice No.82 of 2020. Known as the Regulations 2020, this document was designed to prescribe prudential and market conduct measures to be complied with by all SACCO Societies undertaking the specified non-deposit taking business (popularly referred to as BOSA-Back Office Service Activities- business in Kenya). These SACCOs collect deposits that are only withdrawable on the member's exit, and not at any other time, like their Deposit-Taking counterparts who receive demand deposits like banks.

The publication of the Regulations 2020 was a landmark step towards the policy of bringing Non-Deposit Taking SACCOs under the regulatory oversight of the SACCO Societies Regulatory Authority (SASRA).

The Regulations specified the number of BOSA businesses as the non-deposit taking SACCOs as defined by Section 3(2) of the SACCO Societies Act. 1. Non-Deposit Taking business (BOSA) in which the total non-withdrawable deposits from members is equal to or exceeds the sum of one hundred million shillings (KSh100 million) 2. Non-Deposit Taking business (BOSA) in which the SACCO Society mobilises membership and subscription to its share capital through digital or other electronic payment platforms; or 3. Non-Deposit-Taking business (BOSA) in which the SACCO Society mobilises membership and subscription to its share capital from persons who are ordinarily resident outside the country.

times u sacco Board of Directors after a workshop held at Nokras Hotel Sagana. The Sacco is set to launch a new five-year Strategic plan.

2021 ICU DAY THEME OUT:

'Building Financial Health for a Brighter Tomorrow'

On October 21, 2021, credit unions worldwide will celebrate International Credit Union Day (ICU Day). This annual event raises global awareness for the credit union (cooperative) movement through outreach, volunteering, fundraising, and other ICU Daythemed activities.

Cooperatives bring financial inclusion and a promising future to people all over the world. Since the first celebration in 1948, ICU Day is a chance to spotlight and celebrate these achievements.

World Council of Credit Unions (WOCCU) and Credit Union National Association (CUNA)—WOCCU's will lead the celebration. "This year's theme for ICU Day is 'Building financial health for a brighter tomorrow," said Ariel Bilskey, Director of Blended Learning at CUNA. "Financial well-being for all is a shared commitment among America's credit unions, leagues, and CUNA."

Since its inception in 1971, World Council has expanded financial inclusion worldwide through the global credit union community, sharing the belief that all people should have access to affordable, reliable, and sustainable financial services. "The COVID-19 pandemic continues to challenge the financial well-being of credit union members around the globe. That is why we see 'building financial health for a brighter tomorrow' as much more than a theme—it is the fulfillment of our global credit union mission," said Brian Branch, World Council President, and CEO.

Participating credit unions can showcase how they are working to improve the financial well-being of their members. In addition, you are encouraged to share your memorable ICU Day plans and highlights with credit unions worldwide on social media using #ICUDay.

The ICU Day 2021 logo, along with posters promoting the event, will be released later.

Innovative products, best customer services fuel Bingwa Sacco's excellent growth

The Sacco paid annual interest on members savings at 14% one of the highest in the country despite adverse effects of Covid-19.

mr Francis muriithi mugo, chairman Bingwa sacco

By cN Writer

Bingwa Sacco braced a difficult economic period in 2020 to register exemplary growth in all key segments as its membership hit over 201,500.

The outstanding financial performance posted by the giant Deposit Taking Sacco was attributed to innovative services and products coupled with improved use of information and communication technology in service delivery.

Last year, the Sacco Societies Regulatory Authority (SASRA) licensed financial institution installed a centralized computer system, which was upgraded to ensure members get notifications via SMS when their accounts are credited. "The Society intends to acquire the best system in the market to enable provision of efficient services to our members," said the Sacco chairman Mr Francis Muriithi Mugo.

Mr Mugo said Bingwa Sacco had developed a new five years strategic plan from 2021-2025 that focuses on ensuring the Society's continuous growth.

Among other things, Sacco is aiming at growing members by 15 percent, increase loan portfolio by 10 percent, grow non-withdrawable deposits by 15 percent and share capital by 15 percent annually.

According to the Chairman, the Sacco will leverage ICT to improve efficiency and achieve its targets.

The Sacco completed the extension of its head office building in Kerugoya, which stands as a landmark in the town and greatly improving the Sacco's image. "I am grateful to our members who enabled the Sacco to complete the construction of Bingwa Sacco complex without borrowed funds. We believe the extension will increase our rental income and improve members' dividends in future," said Mr Mugo. He was speaking during the 36th Annual General Meeting at Kerugoya Catholic Church ground.

The Sacco Chief Executive Officer Jane Mugo said the growth in membership from 187,488 in 2019 to 201,558 in 2020 was a demonstration that the fast-growing DT Sacco is committed to offering unique products and services that are tailored to members' needs and demands.

She noted that the Sacco renovated its banking halls, giving them a new look with new executive customer lodges to serve members better.

Madam Mugo has won various accolades for his achievement in the co-operative sector including Head of State Commendation (HSC) in 2012 and Shujaa Award, which was awarded by President Uhuru Kenyatta during the 2017 Mashujaa Day celebrations.

The Sacco has acquired plots

Sacco targets to grow membership to 350,000 and Asset Base to over Ksh 10 billion by 2025

jane mugo, hsc, ceo Bingwa sacco

in places it has branches to reduce high rent expenses. Last year, it bought plots and buildings at Kianyaga, Gatwe, Kutus, Kangaita, Kiamutugu, and Githure trading centers. In 2019, the Sacco acquired a building and plot at the Kiangai trading market.

On financial results for the year ended December 31st, 2020, Bingwa Sacco's asset base went up from Ksh 5.810 billion in 2019 to Ksh 6.208 billion, while deposits and share capital increase to Ksh 1.987 billion from Ksh 1.838 billion in 2019.

The Society disbursed loans worth Ksh 3.2 billion last year. Since its inception in 1984, the Sacco has disbursed loans worth Ksh 23.9 billion. "Majority of members service their loans as required and request all to repay their loans timely to avoid unnecessary costs," said the Sacco chairman.

The Sacco plays a significant role in enabling its members to acquire land and houses through affordable asset and mortgage financing.

Bingwa Sacco Ltd

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ACCOUNTS  Personal Accounts  Corporate and Institutions  Micro-Finance Groups  All Accounts

INVESTMENT  Fixed Deposits  Shares and Deposits  Insurance  All Investments BINgwA PRESTIgE INSURANCE AgENCy SERVICES:  Motor private and commercial, non-Motor, Agriculture,

Last Expense and Medical insurance policies  Life and Pensions insurance products for individuals, groups and organizations  Group and Individual medical schemes  Claims Management  Arranging Insurance Premium financing  And Many more benefits

Enjoy Competitive Rates from Multiple Insurers

CREDIT  Long Term Loans  Short Term Loans  Special Loans M-BANKINg  Deposit  Withdraw

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PAYBILL 400200

aBout BINGWa sacco

In addition to Savings and Credit Bingwa Sacco offers the following services:- Insurance Agency, Investment Wings, Agency Services and Inua Jamii Payments, Mobile Banking Services, ATM -Visa Branded Sacco Link Cards, Benovelent Fund Scheme, Bankers and Ordinary Cheques and many more services.

our branch network has a total of 19 Branches:-

 Kirinyaga County - 16  Githurai, Kiambu County - 1  Accra Road, Nairobi County - 1  Kitengela, Kajiado County – 1

Bingwa Sacco has continually won national and county awards for prudent management and excellent service delivery

The magnificent Bingwa sacco complex has rented office space that generates income for the sacco. Bingwa Sacco Ltd 434 -10300, Kerugoya info@bingwasacco.coop +254 725 713 471 +254 707 069 180

How Saccos are reaping big from digitization

By Faith muema

The economic meltdown after the first COVID-19 case was announced in Kenya in March 2020 has had a devastating effect on employment and businesses. As a result, many employees, including Savings and Credit Co-operative Societies (Saccos) members, went on unpaid leave or had pay cuts.

A growing number of firms and personal businesses have either recorded losses, scaled-down operations, or have completely shut down. This has resulted in many Sacco members withholding their contributions or withdrawing their savings to cater to personal financial needs.

Some Saccos have scaled up their IT platforms due to COVID-19, viewing the pandemic as a silver lining.

An example is Tai Sacco which had already rolled out agency banking solutions in March 2020 when the first COVID-19 case was reported in Kenya.

Tai Sacco, which has its head offices in Githunguri-Kiambu County- was already providing its members with mobile phone solutions, in partnership with Tangazoletu, way back in 2012. "This platform enables members to make deposits, withdrawals, buy airtime or apply for loans using their mobile phones. In 2017, we introduced a paybill that now enables members to make deposits to their SACCO accounts," said John Mwangi, Tai Sacco CEO. This pay bill number has boosted the deposit mobilization efforts of Tai Sacco, eliminating the need for members to make deposits at the banking hall. "We have been doing quite well

even with disruptive effects of the pandemic, especially with the full rollout of agency banking last year. Tai Sacco now has over 50 agency banking outlets," said Mwangi.

With the introduction of a pay bill number, Tai Sacco had increased its members' deposits from Ksh 38 Million in 2017 when the pay bill number was introduced to Ksh 500 Million in 2018 and Ksh 800 Million in 2019. "With technology we are doing well and almost there. We are at the point of linking till numbers to accounts of individual members. This development will enable a member to go to a petrol station and pay for fuel through the till number that is linked to the society," said Mwangi.

Like all IT users, Tai Sacco has been keen to have robust cybersecurity systems to protect members' accounts. "We have contracted an IT solution provider to provide surveillance round the clock, all week including weekends and public holidays as well as at night when normal business hours end. We receive reports of any intrusions and also use firewalls to protect accounts of members from hackers and crafty individuals," said Mwangi.

Industry lobby groups such as Kenya Union of Savings and Credit Cooperatives (KUSCCO) and Cooperative Alliance of Kenya (CAK) have been pushing Saccos to consider suspending interest on the loans taken by their members due to the economic downturn. As a result, this has affected the liquidity of Saccos.

Many Saccos have moved their services to electronic platforms and are now leveraging on their IT investments to deliver financial prod-

Many Saccos have moved their services to electronic platforms and are now leveraging on their IT investments to deliver financial products and services to members.

Before the onset of the Covid19 Pandemic, many businesses were slow or had no plan for their digital strategy.

Globally the pandemic has led to a surge in e-commerce and accelerated digital transformation as businesses and consumers increasingly embrace digital, providing and purchasing more goods and services online, raising e-commerce's share of global retail trade from 14% in 2019 to about 17% in 2020 according to a recent UNCTAD survey.

Various studies have shown that the business model has been transformed forever, with many firms prioritizing automation of processes.

Acceleration in technology uptake has changed how top managers work, and now many are aligning their business goals with technology deliveries. As a result, being digital is no longer a cost-cutting measure but a necessity that every company must implement to survive.

The transformation of any organization is now embraced by all, including top leadership, who, before the pandemic, were hesitant to embrace the digital way.

Customer support frameworks have been automated as companies ditch out traditional customer engagement methods. Many are now relying heavily on social media platforms to engage customers.

In addition to ensuring business continuity and enhancing efficiency, automation of customer support frameworks is a primary source of big data, which is crucial in decisionmaking. Data on customer habits and preferences, for instance, is invaluable.

A key lesson is that automation or digitization of the customer support frameworks should no longer be

How Covid-19 pushed firms to prioritize automation

optional. Instead, it should be prioritized and treated as an integral function.

According to Credit Union Executives Society (CUES), an associate member of the World Council, more and more consumers are taking to digital channels to conduct transactions and interact with their co-operative societies, with usage among cooperators higher than non-members. To keep pace with member demand and compete with other financial institutions, credit unions (Saccos) must continue innovating in the digital space, especially as artificial intelligence and biometric technology advance. Credit unions should keep a regular pulse on what their members want and expect when it comes to innovation. Leveraging third-party partners can be beneficial once credit unions have formulated their strategic innovation priorities. Nonetheless, co-operatives should teach members how to utilize alternative payment methods and explain the benefits and security features of each.

Adopting technology, key in banking industry

ucts and services to members.

With adverse effects from coronavirus taking their toll, individual Saccos have been left alone to decline on the best approach to solving their challenges, given that each society has unique challenges. "The board of each Sacco has had to decide on the best options when dealing with effects of COVID-19 including use of IT as well as extending the loan repayment period for members. There is no common approach on how to deal with COVID-19 effects," said Daniel Marube, CAK Chief Executive.

For those Saccos that have been slow to upscale their IT platforms, the pandemic has presented them with the biggest hurdles ever. Many such Saccos have been experiencing low deposits from members as well as a fall in demand for loans from members.

Others are experiencing problems after suspending field sales representatives from moving from place to place to collect cash from members.

Even after reluctantly shifting to digital platforms, this new format remains challenging because avenues for conducting member education have been shut for many Saccos due to social distancing and other public health protocols and restrictions.

Jamii Sacco posts 51.13% growth in four years

anne l. ambwere, mBs National chairperson – jamii sacco

By Ken Wesley

Despite adverse effects of the Covid-19 pandemic Jamii Sacco maintained strong financial growth, with gross revenue increasing to reach Ksh 597.69 million, boosted by an increase of interest from loans and advances.

Members' savings and deposits jumped by 8.52 percent to Ksh 3.44 billion for the financial year ending 31st December 2020.

Addressing the virtual Annual

General Meeting of Jamii Sacco held at its Conference Hall, the Sacco National Chairperson Anne Ambwere lauded members for their resilience and willingness to build their savings and deposits in the face of a challenging business environment as a result of the effects of the Covid-19 pandemic. "Growth in our savings and deposits will benefit our members greatly through wealth creation, loan services, and high rebates," she said.

She added that the Sacco continues to accumulate enough funds to lend without seeking external borrowing and encouraged members to grow their savings and deposits.

Jamii Sacco also played a significant role in assisting members to cope with a difficult economic time by introducing new products and adjusting some to reflect the reality of the day.

The Sacco loaned members over Ksh 1.94 billion that went a long way to support them in their development goals, among other investments. "Despite the challenges we encountered last year, the net loans and advances balance as of 31st December 2020 was Ksh3.85 billion up from 3.58 billion, posting a growth of 7.54%. I trust that the members directed the loans disbursed to the intended projects with potential positive outcomes," said Ms. Ambwere.

The Sacco management has ensured that members could apply for loans despite government restrictions on movements to limit coronavirus spread. In the fiscal year, 2020 Jamii Sacco's share capital rose to Ksh196.66 million, up from Ksh 172.65 million, an increase of 13.91%. Deposits grew to Ksh 2.961 billion, up from Ksh 2.745 billion, an increase of 7.87%.

The Board of Directors declared payment of dividends on shares and interest on savings at the rates of 12.50 and 10 percentages respectively, amounting to over Ksh 348 million.

sacco banks on Ict

Ms. Ambwere encouraged members to apply for loans to actualize their short and long-term development goals. The chairperson revealed that Sacco's business model is anchored on information and communication technology to improve efficiency in service delivery.

Already the Sacco has implemented

"Any members' records with issues will continue to be addressed as we go along. I encourage individual members to continue sharing their concerns with the management for prompt action," Ms. Ambwere.

She said that the system had supported the Sacco in addressing the perennial issues of non-recovery, under-recovery including accounting for all revenues.

The Sacco also enhanced and upscaled the Jamii M-Cash advance to provide more short-term loans and advances. "Our members can now access financial products more conveniently. They should utilize the system to promptly access advances and commit to repaying the same as per the terms and conditions applicable."

Jamii Sacco Mobile Banking Platform (Jamii MCash) allows members to access various services by dialing USSD *879# or *806#, anytime and anywhere, 24/7.

For seamless communication, Sacco has broadened its messaging platforms, improving interactions at every level. Members' concerns are promptly responded to and addressed thoroughly.

The Board of Directors has developed a new blueprint for the Sacco covering the year 2021-2025. The Strategic Management plan focuses on:

jamii sacco mobile Banking platform (jamii mcash) allows members to access a variety of services by dialing ussD *879# or *806#, anytime and anywhere.

a new ICT-System – Vanguard Financials from Centrino Technologies Ltd, which enables it to keep records up to date, including all reconciliations.

eliud K. chepkwony, ceo, – jamii sacco

Sacco defies pandemic to register excellent financial results as total assets hit Ksh4.67bn

Dolphine aremo, Nairobi co-operative Director, who was the chief Guest.

a section of jamii sacco Board of Directors members during the

1. Growth in membership, virtual aDm. 2. Quality products and services, 3. Operational efficiency, and 4. Institutional capacity building During the year under review, the Sacco recruited 2,166 new members raising the membership to 22,432. Ms. Ambwere, who announced her retirement from the Board, having served the Sacco for a long time as Director, Delegate, and Chairperson, was recognized for her outstanding and visionary leadership. Under her watch, the Sacco asset base grew to over Ksh4.67 billion, up from Ksh304.19 million in the year 2002 when she took over. "Growth in all other operational areas including membership, loan book, and returns to members have continued to be recorded," she said. Last year, the Sacco registered an annual growth rate averaging 10.23%, down from 14.58 % in the year 2019. Growth between 2016 and 2020 was 51.13%. Dolphine Aremo, Nairobi County Co-operative Director, who was the Chief Guest, lauded the Jamii Sac-15 societies were pooled under the co leadership and management for medium tiered societies where it steering the institution to great success despite economic hardships. Jamii Sacco is among 100 Nairobi billionaire Saccos. I am encouraged Due to this impressive growth, the Nairobi based society saw its wealth index ranked 34th nation-that your Sacco is among the few Saccos that have high annual returns ally out of the 172 Deposit Taking to members; not many co-operatives

When peer-grouped by total de-were able to do to achieve such results due to the effects of Covid-19," posits of between Sh1b and Sh5b, she told delegates. the society had Sh3.17b by close of She urged delegates to double their efforts in recruiting more This compares favourably with members to join the sacco and en-the Sh2.8b it reported by end of the sure their members patronize Sacco products regularly. She noted that State Department for Co-operative Development had initiated several Due to its healthy balance sheet in terms of the deposits, the society

was able to extend to its members to engage in income generating activities. As a consequence, the society was reported an income of Sh580m in the year ending December 31st 2019. Registered in 1972, the Sacco operates on open membership with Mariakani South B along Mukenia Road. With a membership of about 18,000, the society has evolved as it seeks to become a critical in the country. Its critical pillars are largely driven by the ings and innovative products and services to ensure optimum returns to members and stakeholders.

Guided by the Strategic Plan wide range of products and services to suit the unique needs of its members. nancial Performance, Member/ Customer Service and Market Performance, focus and Improve on Processes, Systems and People, and Technology and Innovation.

Some of its products include Jamii Sacco Benevolent fund which ensures that member savings and loans are insured in event of death or permanent total disability.

In the event of death of a member for instance or total permanent disability, the deposits are doubled and the outstanding Loans are cleared by the insurance.

The Fund also pays for the members Funeral expenses currently up to Sh35,000 and also covers only one nominated next of kin in event of death for a similar amount. In the wake of Covid-19 pandemic that has the country's social and economic status, the society has put measures to ensure it remains strong. As a result, it reviewed its 2020, scaled down on areas that are not considered critical in expenditure while giving prominence to key growth areas.

Top on the list is ensuring that able credit facilities to members in a reliable way. electronic platforms to serve mem

Besides, it will utilise other communication channels to ensure its members are properly informed and updated.

This will ensure members reach out to the society when it is necessary by accessing circulars and nicate and educate our members on various issues.

To further cement its position in ing agent, the society established Jamii Housing co-operative society limited for its members with a vision to opening it up to the general public.

Due to this impressive growth, the Nairobi based ‘

society saw its wealth index ranked 34th nationally out of

the 172 Deposit changes to improve the management Taking Saccos. of co-operative societies in the country, among them New Co-operative Policy -SASRA and regulation of Non-Deposit Saccos The Sacco CEO Eliud Chepkwony was also commended for his prudent manJAMII M-CASHTHE NEW MSTAAFU THABITI LOAN THE NEW MSTAAFU THABITI LOAN *879# or *806# Dial Access your FOSA Account; Anywhere, Anytime on your mobile phone 24/7 on: Dial USSD *356# for non-smart phone holders. Dial USSD *897# or *806# for non- smart phone holders Download the Jamii M-Cash App on your This is a facility for retirees and it has the following features: Smartphone This is a facility for retirees and it has the following features: OUR JAMII M-CASH PLATFORM ALLOWS YOU TO: Account balance Inquiry Mini statement Inquiry Mobile Money / Cash withdrawal PIN Change Funds Transfer Loan Application Utility Payments Jamii Sacco Court Mukenia Road South ‘B’ Next to Mater Hospital P.O.Box 57929-00200, Kenya Tel +254 (020) 655 2477/48 / +254 715 961 545 / +254 704 914 143 TEL: 020 7903200Jamii Sacco Court Mukenia Road South ‘B’ Next to Mater Hospital Email: info@jamiisacco.comP.O.Box 57929-00200, Kenya Tel +254 (020) 655 2477/48 / +254 715 961 545 / +254 704 914 143 www.jamiisacco.com Email: info@jamiisacco.com www.jamiisacco.com ALL-ROUND GROWTH agement and steering the DepositTaking Sacco to greater heights as reflected in the exemplary results of 2020. The Board extended his contract by two years to prepare for a smooth transition.

Wana-anga sacco members vote-in directors during a past aGm. photo/FIle

is term limit in cooperative leadership good or bad?

With the Ministry of Agriculture, Livestock, Fisheries, and Co-operatives yet to formally present a new draft policy paper, which will usher in a fresh beginning for co-operatives, confusion still reigns supreme in this sector.

More than a year since a draft National Co-operative Development Policy Paper was published, this document is yet to reach the cabinet for approval and parliament for debate.

Top leaders in the co-operatives movement, including powerful lobby groups such as the Kenya Union of Savings and Credit Cooperatives (KUSCCO) and Co-operative Alliance of Kenya (CAK), have constantly thrown barbs at key proposals in the draft policy paper, now gathering dust at the State Department for Co-operatives.

There have been loud protests over a proposal to introduce term limits for directors sitting on the Boards of Co-operative Societies.

The now outdated Co-operative Societies Act, Cap 490, does not specify how long a director can sit on the Board of a Co-operative Society. This situation has seen influential directors serve for life in most of these boards.

While the draft policy paper has proposed that a director can only serve for a maximum of two terms of five years each, this provision has drawn protests from sections of the co-operatives fraternity.

The argument has been that cooperatives are member-controlled, and elections are held each year when 1/3 of the board retires and faces an election at the Annual General Meeting (AGM).

Leaders are also opposed to reviewing and eliminating multi-layer leadership structures where one is a director in a primary co-operative society and holding a similar position aspiring to leadership positions.

While there are cases of directors who serve for long because they deliver to members, there are also those, especially the ones leading rural-based Saccos, who retire without leaving any succession plans. Others run these societies like their personal fiefdoms with a complete iron fist.

Directors of these Saccos should allow for their activities to be limited and scrutinized. This is because they take deposits from the public.

The State has a responsibility to protect the public from corrupt cooperative officials.

Perhaps the reason why co-operative societies lag behind in the financial services sector is because of their unsatisfactory governance structures, including a lack of safeguards to protect members’ funds.

Since 2013, when the devolved system was implemented, challenges have emerged in the management and supervision of the co-operatives that call for closer cooperation between the national and the county governments. This cooperation has been difficult to achieve in the existing legal and regulatory framework currently in operation.

The new rules coming into force in June 2021 that will allow SASRA also to regulate the big BOSA Saccos is a step in the right direction.

Co-operatives are member-controlled, and elections are held each year when 1/3 of the board retires and faces an election at the Annual General Meeting.

in a National Co-operative Organizations (NACOs).

It has taken the Sacco Societies Regulatory Authority (SASRA) intervention for Saccos to amend their bylaws, allowing for setting up vetting committees to clear individuals

Mwai rides to new heights with Nanyuki Boda Boda Sacco Changing hustler narrative through Saccos

John Maina Mwai was able to overcome challenging odds of poverty and unemployment, and become a businessman and homeowner, one step at a time, supported by his Sacco. Mwai was unemployed until he learned that Nanyuki Boda Boda (NABOSA) could help to finance a loan for him to invest in a motorcycle. This was all that John needed to launch his business as a Boda Boda rider. He was good at his trade, and with time, he paid off his loan and bought a second motorbike, expanding his business and offering employment to another rider. But he had another dream to have a place to call his own. So, with the support of NABOSA, Mwai and his family were able to move out of their rental property and into a 3-bedroom home.

Through NABOSA, we own our own house and also this plot (of land). We even have a kitchen garden, Mwai glowed. At present, he has left the motorbike behind, upgrading his taxi services with the purchase of a full-sized vehicle. He now serves as a taxi driver, which offers him greater security and peace of mind in his profession. Mwai’s hard work and entrepreneurial spirit yielded significant quality of life improvements for his family. His cooperative facilitated his dreams and connected him to the resources that could catalyze these positive life changes.

Source: What Difference Do Cooperatives Make? Global Outcomes Report.

By Co-op News Reporter

Saccos inspire a saving culture enabling individuals to grow wealth and shake off poverty. They are also worth investing in since they give dividends annually to their members.

Boda Boda operators are some of the people who are benefiting from Saccos. A case in point is the Nanyuki boda-boda operators in Laikipia County, who are now proud house owners in a gated community.

Their success journey started in 2011 when they formed a Chama to support each other in the time of need. Their chama would later become Nanyuki Boda Boda Sacco (Nabosa) that facilitated members to buy new motorcycles.

With visionary leadership, the Sacco embarked on a housing project in 2015, taking a cue from motorcycle taxi operators in Kitengela, Kajiado County. To their surprise, by 2018, many of them were homeowners, a dream that many never imagined.

Their success emphasis the importance of co-operative societies in poverty eradication and supporting low-income people achieve their dreams

Saccos all over the country are building a solid bottom-up economy by supporting the small and medium enterprises that would find it challenging to get financing from banks.

Sacco members are people with similar interests who come together to form a credit union. They have changed the story of Kenya’s banking history, and many bureaucratic processes that were associated with Kenyan banks are long gone.

Why should you join a sacco?

Saccos accumulate savings and provide loans or invest in financial securities and real estate. Saving with a Sacco is different from a bank because: a. They are no charges attached to the savings b. A member cannot access their savings unless they terminate their membership or obtain credit c. They pay interest on your accumulated savings

A member can borrow up to three times their savings, as long as they can get other members to guarantee. Saccos pull together their members’ savings and invest them in joint projects that are beneficial to members.

saccos are essential because:

1. They encourage you to save Saccos require you to save consistently, and this, in turn, enables you to cultivate the discipline of saving frequently. 2. They are a sure investment Saccos pay out dividends on the savings of their members. Compared to other investments, saving in a Sacco has a more guaranteed return. 3. They have limited liability Typically, the liabilities of the society members are limited to the amount of capital they contributed. Therefore, if the society goes bankrupt, the personal property of the members is safe.

Saccos offer affordable developmental loans that ensuring you achieve your goals in life.

By Shantel Nafula

Dairy farmers are expected to spend more as the rising cost of maize has pushed animal feed prices high.

Association of Kenya Animal Feeds Manufacturers chairman Joseph Karuri said the cost of animal meals is likely to increase as maize market prices go up. Maize forms over 80 percent of animal feed composition.

“We have witnessed a sharp hike in the cost of maize within a short time with the price of raw material across the board going up by 40 per cent,” he said.

A 90-kilogramme bag of maize is selling at over Ksh 3,000 following the government move to restrict maize imports. This has contributed to the price increase for a 70-kilogramme bag of the dairy meal by Ksh 500.

The Kenyan animal feed sector is characterized by many small, unregistered feed millers that are now feeling the pinch. According to Karuri, the high cost of making animal feeds has forced about 20 manufacturers to shut down.

Commercial feed producers contribute about 55 per cent to the domestic demand for animal feeds, although this has dropped since last year. The demand for non-commercial feed producers has increased as more farmers rely on smaller-sized regional millers or home-based feed mixers.

Karuri has called on the government to review the import restriction, noting that it had plunged most millers into cash flow problems.

“The government should find a way to resolve the dispute at the borders in respect to the maize imports from our neighbours so that

Rising animal feeds Rising animal feeds prices squeeze farmers prices squeeze farmers

the reduced prices will benefit the farmers,” he said.

With a turbulent economic environment as the Covid-19 pandemic continues to disrupt businesses, millers are going through a hard time.

Processors are also grappling with an increase in the cost of key supplements such as sunflower cake that has gone up from Sh18 last year in April to Sh45 for a kilo. Likewise, soya has increased from Sh55 to Sh80 for the same quantity, with a kilo of wheat bran going up from Sh12 to Sh23.

The Kenyan livestock feed industry comprises two principal components: pastoral (forage pasture/fodder) and manufactured feeds. The pastoral meals provide the central dietary component for ruminant production (cattle, goats, sheep, camels).

While manufactured feeds may be used as and when necessary, they are primarily applied to intensive pig and poultry production. Extensive livestock systems are exclusively fed pastoral feeds - natural pasture and cultivated weeds. Intensive production systems maintain livestock (mainly exotic breeds) in high-density pens and use formulated feeds with hay and lucerne as supplements.

Forage is the principle livestock feed in Kenya, with the quality and quantity varying both spatially and temporally. By preserving silages during the rainy season, farmers compensate for the reduction in the nutritional quality of fodder during the dry season. However, there is a lack of both skills and equipment that could be used to improve processing and preservation techniques. As a result, the quantity and quality of fodders have not improved significantly over the past decade.

Over the past decade, the use of manufactured feed and feed supplements has increased.

With the rising cost of raw material, millers have reached a point where they can no longer increase the cost of animal feeds as the current prices have directly affected demand.

The processors also project that the cost of other significant supplements such as sunflower cake, which is mainly imported from Tanzania and Uganda, will go up due to a weaker shilling against the dollar.

Mount Kenya Milk leads in quality

By cN Writer

Mount Kenya Milk guarantees you quality. Meru Dairy Cooperative Union ensures that the milk processing meets all required specifications. From milk reception points to Mount Kenya milk products' packaging, the Union ensures all the necessary tests are done under the quality controls of government certified officials' strict supervision. At all times, Hazard Analysis Critical Control Points must be adhered to for high quality.

Any batch that does not meet the required standards at the factory is isolated. The Union is keen to ensure its milk consumers only get the best: quality milk that guarantees health.

With proper control measures, contaminated milk is kept out of the Union's factory. Every gallon of milk is qualified at the receiving point as the Union performs regular tests at its lab for all the milk received.

Factory premises comply with all health standards provided by the government. Surfaces, walls, and entry points are regularly cleaned to eliminate contamination of products.

Farmers are also trained in hygienic ways of handling milk from production, storage, and distribution.

Once the milk is received in the Union factory, it is chilled to slow the growth of microorganisms before it is homogenized, pasteurized, and sterilized.

In all these processes, the nutritional value of milk is maintained. Mount Kenya milk brand is tested by internal and external regulators, ensuring that the products are top quality certified. Quality defines the Mount Kenya Milk brand, and products have a unique taste giving the consumer joy and a good mouthfeel. Mount Kenya Milk is continuously improved to meet customer needs.

Mount Kenya Milk products are distributed countrywide, ensuring consumers can purchase their favorite milk in the shop near their homes and supermarkets such as Naivas, Carrefour, Quickmatt, and Ketias. Mount Kenya Milk, a product gaining momentum nationwide made of high quality and affordable.

the union premises in meru town mount Kenya milk product

Meru Dairy Co-operative Union ensures that the milk processing meets all required specifications. From milk reception points to Mount Kenya milk products' packaging, the Union ensures all the necessary tests are done under the quality controls of government certified officials' strict supervision.

Microsoft, WOCCU to assist digitization of Saccos in Kenya

amrote abdella, regional Director, microsoft 4afrika.

By peter Kinyanyui

Microsoft East Africa, through the support of its 4Afrika initiative, has signed a Memorandum of Understanding (MoU) with the World Council of Credit Unions (WOCCU) to help accelerate digital transformation within Kenya's Savings and Credit Cooperative (Sacco) sub-sector.

Both parties will work to establish a framework for the digital transformation of Saccos in Kenya. "Saccos have an increasingly important part to play in the region's growth and development. Microsoft is on a mission to support these organizations by helping remove some of the barriers to digital transformation within the sector. Given the urgent need for Saccos to provide members with digital services, we feel we can add significant value to the ongoing success and sustainability of the industry," said Amrote Abdella, Regional Director, Microsoft 4Afrika.

Microsoft 4Afrika will work with WOCCU to understand digital transformation challenges faced by the sector by implementing ideation workshops. WOCCU's Technology for Innovation and Financial Inclusion Project (TIFI) will identify Saccos and key partners like IRNet Coop Kenya to participate in these workshops. In addition, they will collaborate with Microsoft on developing digital transformation use cases.

Together Microsoft and WOCCU will then collate the findings and recommendations from the workshops and develop proof of concepts that can be tested by the Saccos and fully deployed once they prove they meet sector demands.

Leveraging Microsoft 4Afrika programs to close the skills gaps in target Saccos, a training curriculum will be developed to accelerate adopting these digital solutions and empower the Saccos to evolve as their needs members evolve continuously.

Microsoft will further play a key role in identifying partners that can support the development of solutions and business strategies within the sector.

The 4Afrika Initiative is Microsoft's business and market development engine in Africa. Launched in 2013, it aims to unlock and accelerate Africa's potential to create technology for the continent and the world.

Saccos play a key role in Kenya's economic strategy, bolstering income-generating opportunities and, more recently, contributing to around 5.7% of Kenya's GDP.

According to the Sacco Societies Regulatory Authority (SASRA), Saccos form an important part of Kenya's deposit-taking and lending market, providing financial services to around six million households. "COVID-19 has accelerated the need for Saccos to evolve and embrace digital channels. Empowering them to embark on this journey is not only critical to their sustainability, but also the key to unlocking further growth potential within the region," said Megan O'Donnell, WOCCU Vice President of Financial Inclusion.

WOCCU has implemented more than 300 technical assistance programs in 90 countries. Worldwide, 86,055 credit unions in 118 countries serve 291 million people.

Be wary of unlicensed deposit-taking entities

The growing popularity of Savings and Credit Co-operative Societies (Saccos) in the country has been attracting fraudsters in the financial sector, particularly the Sacco subsector.

The Central Bank of Kenya (CBK) and Sacco Societies Regulatory Authority (SASRA) have consistently raised the alarm drawing the public's attention to the re-emergence of unlicensed deposit-taking entities and Ponzi/pyramid schemes, yet many still fall victim to fraudsters.

According to the authorities, such entities entice public members to place money with them and promise quick and abnormally high returns on their cash or acquisition of nonexistent properties.

Recent CBK and SASRA's warning to the public against the unlicensed entities comes at a time when Kenyans once again reportedly made losses amounting to millions of shillings by falling prey to an online Ponzi-like scheme disguised as an ecommerce and referral app, namely Amazon Web Worker Africa.

Thousands of Kenyans reportedly opened accounts with the app and started referring friends and family members to join in.

In the past, pyramid entities fashioned as Saccos have conned co-operators their hard-earned money.

In the wake of the Covid-19 pandemic re-emergence of fraudulent and unlicensed financial schemes seeking to take advantage of Kenyans during these challenging times has increased.

These rogue entities include online pyramid schemes, unlicensed credit and savings schemes, and unlicensed online forex brokers and traders, according to the CBK notice.

How to identify a pyramid scheme

Some of the fraudulent entities have styled themselves as online global networking companies that seek to recruit public members to join and make cash deposits purportedly to buy shares in the company.

The encouragement to recruit new members to receive more benefits is a characteristic of a fraudulent pyramid scheme.

One of the major characteristics of these entities is that they promise customers huge returns and are not licensed as required, either as online forex brokers or traders by the Capital Markets Authority (CMA) or as forex dealers by the Central Bank of Kenya (CBK).

CMA licenses and regulates online forex brokerage and trading and other capital market products, while CBK licenses and regulates all forex dealers and the Kenya Shilling component of any online forex trading and brokerage. These rogue entities seek to exploit Kenyans and pose Money Laundering and Financing of Terrorism risks to the financial sector. CBK had previously issued a Public Notice in August 2019 warning the public against unlicensed forex dealers.

CBK urged the public against dealing with licensed financial institutions and entities to protect themselves from being defrauded and losing their money.

In addition to a business permit, regulated financial institutions are required to have a valid license issued by a financial sector regulator.

The list of financial institutions licensed by the financial sector regulators may be accessed from the Central Bank of Kenya's website www. centralbank.go.ke, Sacco Societies Regulatory Authority's website www. sasra.go.ke; Capital Markets Authority’s website www.cma.or.ke; Insurance Regulatory Authority’s website www.ira.go.ke and the Retirements Benefits Authority’s website www. rba.go.ke.

Inquiries on the activities of all other cooperative societies or non–deposit-taking Saccos should be directed to the office of the Commissioner for Cooperative Development or the nearest County/Sub-County Cooperative offices.

The Commissioner for Cooperative Development can be reached through contacts on the website www.ushirika.go.ke.

Investing in Saccos is worth it, but take care pyramid schemes are masquerading as Saccos."

Ardhi Sacco banks on ICT for growth

By cN Writer

Ardhi Sacco has maintained a steady performance in the financial year ended December 31st, 2020, despite the country witnessing depressed economic activities due to the adverse effects of the Covid-19 pandemic.

The Sacco registered a 5.2 percent growth in members’ deposits, boosting its liquidity at a time when many co-operatives societies in the country had challenges financing loan demands from members. Ardhi Sacco maintained an up-to-date loan allocation, enabling many of its members to achieve their development goals.

With about 200 millionaire topsavers, the Sacco is targeting to grow its list of highest savers through various initiatives to achieve its strategic goals, including growing loan portfolio and surpluses that will translate to higher members annual earnings.

Last year, the Deposit Taking Sacco loan book grew by 3.4 percent as the pandemic slowed credit uptake despite its quick and timely disbursement of loans to members. The Sacco has taken a raft of measures to reduce bad debts while being keen to grow the loan portfolio.

Addressing delegates during this year’s annual meeting, the Sacco National Chairman, Mr Tom M. N’Khataro, said the Sacco had a 9.5 percent growth in share capital. The Sacco turnover for the year stood at Ksh 251.5 million.

Despite challenges brought by the Covid-19 pandemic, the Sacco Board of Directors said that annual dividends on members’ shares increased by 30.4 percent while interest on members’ deposits went up by 8.3 percent.

Mr N’Khataro urged delegates to grow the Sacco business by having as many members patronizing its products and services.

The Sacco is targeting to grow its membership by over 1,600 annually through concerted efforts with delegates and members rewarded Ksh 1,000 for every three recruit members. “Our Karibu loan of Ksh 50,000 is available to new members instantly. We should target new staff being recruited by ministries and counties,” he said.

In the future, Ardhi Sacco is banking on ICT to grow business and improve efficiency and customer satis-

mr. tom o. m. N’Khataro National chairman

mr. john o. laku supervisory chairman

mr. john B. m. muthamia ceo

faction.

“We have to move with the current tide to offer efficient services for the Society to thrive. We will minimize physical meetings as we opt for virtual meetings,” said the chairman.

The Sacco management is popularizing its mobile banking platform Pesa Pepe that enables members to access their accounts and statements both for FOSA and BOSA activities anytime and anywhere.

In addition, the Sacco has provided members with a Sacco Link card, enabling members to access their cash via ATMs all over the country.

“Members can still apply for the advances online by downloading the forms from our website and sending via email,” said Mr N’Khataro.

the sacco aDvaNces INcluDe:-

jaza jaza

It is an advance taken to clear outstanding loans/ advance and apply for new ones.

Instant advance

A member can apply up to a maximum of Ksh.500,000 repayable within 24 months.

mobile advance

The amount is advanced to FOSA customers to a maximum of Ksh.5,000 repayable within a month. Members can apply via their mobile phones.

salary advance

This advance applies to members who process their salaries through the FOSA. It is repayable within a month.

salary In advance

Applicable to FOSA account holders and repayable within 12 months.

Sacco registers excellent performance in FY 2020

Ardhi Sacco is regulated and licensed by Sacco Societies Regulatory Authority (SASRA). The Society has met all prudential ratios as required by SASRA. The Society was registered on October 5th, 1971 (Registration No.2001) by the Commissioner for Co-operative Development.

vision

“To be the leading Sacco in serving members timely and efficiently”.

mission

“To provide exceptional services to attract and retain savings and offer credit for the improvement of the economic lives of members”.

ardhi sacco staff, during previous ushirika Day celebrations

ARDHI SACCO SOCIETY LTD

Access All Ardhi Sacco services at the comfort of your home through multiple mobile banking services

 Balance enquiry for all products e.g. loan, shares or savings.  Money transfer from FOSA account to mobile (M-Pesa).  Purchase of airtime  Mobile loan accessibility  Payments e.g. loans, deposits and savings  Utility payments  Information – i.e. on loans guaranteed, next of kin, loan status, savings and loans balances.  Manage my account.

PAYBILL NUMBER:305750– make your deposits.

ARDHI SACCO

Save for your holiday at an amazing interest rate! Save for your retirement too!

 Holiday Account  Retirement Account

ARDHI OFFICE CONTACTS

SURVEY OF KENYA– THIKA ROAD P. O. Box 28782-00200, Nairobi Phone: 0730725000/0722209851/0780337725

Transparency and Accountability key for Coop sector growth

EACC says it has received 372 complaints on allegations of corruption and ethical conduct, 27 reports touching on Chairpersons and CEOs

By cN Writer

State Department for Co-operatives has collaborated with Ethics and Anti-Corruption Commission (EACC) to strengthen transparency and accountability in the co-operative sector.

The State Department for Co-operatives and the Commission signed a Memorandum of Understanding (MoU) in March 2019 partnering to enhance the capacity of the Cooperative Sector in combating and preventing corruption.

Recently, both institutions held integrity webinars for officials and staff of Financial Cooperatives from Uasin Gishu and Nyeri Counties, organised to build capacity in financial co-operatives on matters of Ethics and Integrity.

According to the reports by the State Department, the Cooperatives Sector plays an integral role as a driver of economic growth, contributing about 30 per cent of the national savings and employing more than 500,000 Kenyans directly and another 1.5 million indirectly.

Saccos are also key players in the realization of Vision 2030 by mobilising savings for the Country’s investment needs. Given the asset base that this sector controls over one trillion shillings and a loan portfolio exceeding Kshs 700 Billion as of 2017, the sector is therefore of interest to the Commission.

Resources of such high value warrant appropriate internal controls, sound leadership, transparency and accountability. The need to uphold integrity in the management of resources entrusted to co-operatives in the form of hard-earned savings by Kenyans cannot be overemphasized.

Since 2013, EACC has received 372 complaints on allegations of corruption and unethical conduct within the Cooperatives Sector. A total of 47 complaints, upon analysis, were found to be within the mandate of the Commission and hence taken up for investigations. The rest were referred to other relevant agencies, and advisories thereof issued to the complainants.

Out of the total complaints received, both low level and high-level officials were involved. These officials constituted officers and managers of the co-operative societies. Middlelevel officials who are mostly managers engaged in maladministration of the societies.

Further, 27 reports were touching on Chairpersons and CEOs of several co-operative societies. These are serious matters that render ordinary members vulnerable to loss of their savings and endanger livelihoods and the Country’s economy.

The webinar training program was designed as a pro-active intervention to create awareness among co-operative societies, to equip them with the appropriate knowledge, skills and tools to advance integrity in this important sector.

EACC said it remains committed to building the capacity of the Cooperatives Sector workers to prevent corruption and enhance accountability mechanisms in the administration of the co-operative movements in the Country.

The government has intensified graft war in the sector and has created a Sacco Fraud Investigation unit that operates under Sacco Societies regulatory Authority (SASRA). The Directorate of Criminal investigations supports the unit to curb fraud and embezzlement cases in the co-operative sector.

The move is an important development that will ultimately strengthen the Sacco sector. Saccos have changed livelihoods, but the emergency of pyramid schemes fashioned like Saccos soils the good co-operative name.

“SACCOs are critical players in our financial ecosystem. They have been central to both societal and individual development for many years. We at Kwara have heard countless stories of the individuals who improved their salary, provided education to their relatives and built houses, all because of SACCO services. Increased regulation on the management of SACCO funds will mean that more of these stories become every person’s reality,” says Kwara, a fintech firm.

Graft war in co-op sector on a high gear

By cN Writer

Saving and Credit Co-operative Societies' success story has been incredible. The fast growth witnessed in the Sacco subsector and the co-operative movement at large points to prudent management and visionary leadership.

But this does not mean the cooperative movement in Kenya is free from corruption. Thousands of people have lost their money in some cooperatives owing to inept and corrupt leaders and managers.

On this backdrop, the government has been keen to institute measures aimed at strengthening governance in the co-operative sector. With sustained efforts, the road for corrupt Sacco officials and directors, with a habit of dipping their hands into the cookie jar, has steadily approached the dead end.

In 2019 Ethics and Anti-Corruption Commission (EACC) did indicate that it would conduct a lifestyle audit of all Sacco directors and managers in collaboration with the State Department for Co-operatives. Some are suspected of having stolen cash or taken away assets from their societies.

EACC signed an anti-graft deal with the State Department for Cooperatives to tame graft in the movement. The proposed lifestyle audits on top managers, tracing, and recovery of stolen assets are yet to be conducted.

EACC was to assist the State Department in monitoring co-operatives leaders and managers to prevent graft and catch corrupt officials by tracking their assets.

Of concern are the increasing cases of poor decisions made by officials in several co-operatives that have

peter munya, agricuture and co-operatives cs

cost members dearly, such as buying undervalued properties at exorbitant prices.

In recent years, concerns have been rising over an increasing number of co-operative societies caught in the limelight for allegedly selling nonexistent plots or houses to members.

However, it should be understood that Saccos have their own internal control mechanisms, such as the Board of Directors, Supervisory Committee members, or Delegates, who make recommendations to members on corruption issues. All these organs act on behalf of members, besides Saccos employing internal and external auditors who give recommendations on what is to be done when an official is accused of theft or corruption.

In addition, members as the owners of the Sacco elect directors to serve in the Board for a three-year term and thus have a responsibility in voting out corrupt officials.

The Sacco Fraud Investigation Unit has made significant progress in the graft war in the co-operative movement. In February this year, Agriculture and Co-operative Cabinet Secretary Peter Munya revealed the unit had arrested two people for fraud-related charges, finalized an investigation, instigated arrest and prosecution. He said that Ksh 1.3 million embezzled funds had been recovered in one case.

In recent years, concerns have been rising over an increasing number of co-operative societies caught in the limelight for allegedly selling nonexistent plots or houses to members.

education and training for them,” said Michael Mbaabu, Chairman of the Board of Directors, Centenary Sacco

Society. The Society is already receiving accolades for targeting more young people owing to its suitable products and services. “Saccos need to come up with products that will attract more youth to join them. I am glad to note that this Sacco is succeeding in that front,” said Tharaka Nithi Sub County Cooperate Meru was established in late 1970’s by Savings and Credit Co-operative Society, Centenary Sacco was later registered in the year 2003.

The idea of having the Society was services. Through the assistance of the try of Co-operative Development, the dream was achieved on 18th March, 2003 when Centenary Sacco was registered.

Owing to the notable growth in Sacco business, the board declared dividends on FOSA share at the rate of 8 per cent and Interest on Deposits at a rate of 6.7 per cent.

The dividends payout to members was one of the highest in the Sacco’s history.

Overall, the Society's growth for the cent in 2017 to 6.7 per cent in 2018.

According to Centenary Sacco Chief -

able services across all its branches including mobile banking, agency bank ing services, ATM Sacco link and Visa branded cards. variety of loan products including Salary loan, Salary Advance, Salary overdraft, Classic loan, Uwezo loan, Jifunze junior loan and institutional loans available to all the catholic church-run institutions within the diocese of Meru who have registered as members. Centenary Sacco also has Vuna Majani overdraft facility given to tea farmers whose tea proceeds are channeled farmers whose proceeds are channeled through the Society’s FOSA wing.

The Board of Directors, Management and Staff of

Centenary Sacco Society Limited are pleased to be New regulations to rein in on dubious entities

associated with the 97th By peter Kinyanjui Ushirika Day celebrations, as

we mark milestones in the Co-operative movement.Saccos operating in the digital platform will face strict regulatory oversight as the government HAPPY USHIRIKA DAY.moves to protect Kenyan deposits. There has been a rise of co-operatives operating online without physical presence that have mobilized savings running into millions raising the risk that citizens may lose their money.

Many Kenyans have lost their hardearned money to online schemes that entice them to quick riches. In a departure from the past, the government will now require digital Saccos to register with the Sacco societies Regulatory Authority (SASRA) starting July 1st this year. The Saccos will also be required to submit their accounts to the regulator regularly. This move will protect citizens from unscrupulous institutions and individuals who raise funds only then close shop and disappear in thin air. While digital financial institutions make it easier for members to save, withdrawing the money is always difficult when one opts to leave. The Acting SASRA Chief Executive Officer Peter Njuguna has said the authority would oversee the digital Sacsaid the regulatory authority had received applications from 50 Saccos. About 200 Saccos operating Back Office Services are expected to apply for SASRA licensing. "I expect we shall see over 200 applications before May ends. We'll authorize as they come. The law gives us the room of 90 days to process," he said. The non-deposit Savings and credit co-operative societies must comply with new regulations by June 30th. The SASRA ruled out an extension for compliance to the Sacco Societies (Non-Deposit-Taking Business) Regulations, 2020, saying the societies had over a year to prepare for the rules. It warned the public against dealing with any Sacco that will not have cos to protect members' money. "We must authorize them before they ask Kenyans to deposit with CENTENARY SACCO SOCIETY them. Saccos need close supervision even when they are small in terms of P.o Box 1207 60200 – Meru Meru: 0715 467 290 Chuka: 0714 974 287 Kinoro: 0732 880 930 Mutuati: 0789 406 551 MERU: 0715 467290, CHUKA: 0736 542 426, KINORO: 0732 880930 MARIMATI: 0731 065744 MUTUATI: 0789 406551 savings and assets," he said. www.centenarysacco.org E-mail: info@centenarysacco.org

The Saccos operate in a different environment escaping regulatory over- Our Mission: To mobilize resources for all, with an aim of promoting our people economically sight like the traditional institutions. irrespective of their economic status and background. Njuguna said some of the institutions had caused a lot of pain to their Our Vission: To become an outstanding credit union in the country in mobilization of resources and members. While traditional Saccos have a social bond, virtual ones lack such, and it is hard even to trace the officials that run them. "The whole idea is to ensure that they are properly anchored and their bylaws are clear," said Njuguna. New regulations were gazetted in January this year, requiring the digital Saccos to comply within six months. Recently the SASRA oversight has SAVINGS PRODUCTS - FOSA (a) Salary accounts (b) Savings accounts (c) Jifunze junior account (d) Fixed deposits accounts (e) Group/institutions accounts FOSA UTILITY SERVICES M-pesa PayBill Services FOSA LOAN PRODUCTS Classic Loan Salary Loan Salary Advance Salary Overdraft Jifunze Junior Loan Kamua Pesa Loan Vuna Majani Advance Vuna Majani Loan been extended to Non-deposit Saccos that have assets size exceeding Ksh 100 million. mobile banking services ATM Services - Saccolink Visa Card Personalised Cheque Books BOSA LOAN PRODUCTS Instant Loan Normal Loan

While the banking sector is fully regulated, the Sacco sub-sector has for long escaped strict supervision from the regulatory bodies. SASRA, for instance, has been monitoring opera- tions of 175 deposit-taking Saccos.

With the deadline approaching for to economic prosperity from whatever economic status. non-deposits, Saccos fast Njuguna complied by the set date. "Any person, including members of the public and public entities who undertake such specified non-deposittaking business transactions or other businesses with an unauthorised person, entity, or Sacco society shall be doing so at his or her risk and peril," said Njuguna in a statement. The regulations not only affect Saccos with physical offices but also those that conduct their businesses virtually. Organizations that mobilise members through subscriptions and those that take share capital from diaspora membership. The regulations are meant to protect members' savings following cases of Saccos going under with millions of shillings and leaving members destitute after years of toiling. SASRA said many Kenyans had lost their money to pyramid schemelike entities operating virtually and purporting to be Saccos by hoodwinking the public to save with them with promises of good returns, only to disappear. "The new regulations will thus rein in such dubious entities," Njuguna said.

Centenary Sacco posts excellent growth, pays high dividends

centenary sacco chairman michael mbaabu

The Sacco has fully embraced alternative banking channels to enhance convenience in accessing financial services to save our members time and money"- Mr Mbaabu, Centenary Sacco Chairman.

By CN Writer

Centenary Sacco registered exemplary financial growth, shaking off adverse effects of the Covid-19 pandemic that ravaged the country's economy last year.

The Sacco registered growth in total assets and members' deposits, highlighting the institution's resilience in the face of a troubled economy, which was attributed to stringent measures introduced by the Board of Directors and management.

The Sacco changed its business model, which focuses on using technology to deliver seamless services to members anytime and anywhere. These services include Sacco link ATM services that enable members to withdraw money in all Visa-branded ATMs and Co-operative bank ATMs and agents countrywide.

The Society also bettered its mobile banking solutions, M-Centenary enabling its members to easily manage their finances via mobile phones using the USSD code *477# and pay bill number 700300. With Covid prevention measures in place as directed by the government, the mobile banking service registered growth in users' number. "We are currently working on a mobile loan service to solve the members' short term financial needs," said the Sacco chairman Mr Micheal Mbaabu, who spoke during this year's Sacco Annual General Meeting.

He said the Sacco is establishing agency banking once the regulator, Sacco Societies Regulatory Authority (SASRA), gives the go-ahead. Besides, the Sacco has been offering personalized cheques to members, a service that has significantly boosted its liquidity which stands at 22.94 per cent.

Financial reports for the year ending 31st December 2020 indicates that the Sacco asset base increased from Ksh 1.086 billion in 2019 to Ksh 1.17 billion. The Sacco granted members loans worth over Ksh 768 million last year. To reduce bad debt, Centenary Sacco has introduced a raft of measures such as

Benson m. mugiira, ceo.

listing defaulters with Credit Reference Bureaus on a daily basis.

Despite the challenges witnessed last year, Sacco announced payment of annual returns to members. "The Board of Directors has proposed payment of dividends on FOSA shares at a rate of 8%, Pepea shares at 12% and interest on deposits at 4%," said Mr Mbaabu.

More members joined the Sacco last year as it continued to offer tailored financial solutions, with the membership reaching 42,707, which was an 11 per cent growth.

The Sacco embraced a new member education approach; members were visited and educated at their workplaces, which made it possible to address their personal issues.

The Deposit Taking Sacco is keen to expand its wings beyond Meru County. Two of its satellite offices at Mutuati and Marimanti are in the process of being upgraded to full-fledged branches.

Centenary Sacco won three awards last year at the National and County level for outstanding service delivery. The Society has been sponsoring students' access education at secondary school to university level through its foundation. "We will continue supporting the needy in society," said Mr Mbaabu.