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SACCOs Recover Sh800 million in Non-Remitted Funds



By Ngumbo Njoroge

SACCOs recovered Sh800 million in non-remittances last year, driven by initiatives by the regulator and key SACCO players, new data by SASRA shows.

Non-remittances to SACCOs dropped to Sh2.6 billion in 2022 from Sh3.4 billion the previous year. The regulator notes that SACCO non-remittances recorded a significant drop from a high of Sh5.04 billion in 2020.
“The total amount of non-remitted funds owed to the Regulated SACCOs as of September 2022 stood at Sh2.696 billion, directly attributed to a total of 66,452 members drawn from 80-Regulated SACCOs made up of 57-DT-SACCOs and 23-NWDT-SACCOs,” SASRA said in the 2022 SACCO Supervision Report.
The data shows that loan repayment constituted 75 percent of total non-remitted funds, amounting to Sh2.02 billion.

“The direct impact of these non-remittances is that the total loans’ portfolio among the Regulated SACCOs was defaulted in an almost equivalent amount, besides occasioning liquidity crunch and pressures on the SACCOs to meet their financial obligations,” the regulator added, noting that this impacted the SACCOs’ interest income.
Loan repayments to DT-SACCOs stood at Sh1.75 billion, with 57 SACCOs being the most affected.
The regulator urged SACCOs to implement recommendations of a 2019 notice requiring channeling of members’ income through FOSA savings account.
County Governments and Assemblies were the largest debtors to SACCOs, owing Sh1.35 billion, which accounted for 50 percent of the total non-remittances.

This affected 43,139 members, primarily employees of County Governments and Assemblies. The funds owed were mainly related to loan repayments, indicating the poor quality of loan portfolios in SACCOs with members from these entities.
Public Universities and Tertiary Colleges owed the second-highest amount, totaling Sh620.52 million, or 23 percent of all non-remitted deductions. Private Sector Companies and State Corporations (parastatals) owed Sh428.95 million (16 percent) and Sh143.09 million (5 percent), respectively.

Public-owned companies owed Sh64.18 million (2 percent) to SACCOs.
The regulator notes that SACCOs, which rely heavily on remittances from employer firms and organizations, have been grappling with a persistent problem of funds not being remitted as required by law.
“These remittances are largely premised on the provisions of Section 35(1) of the Cooperative Societies Act which allows employees to instruct their employers to periodically deduct from the employees’ emoluments such sums as the employee may determine, and to remit such deductions to the employees’ designated SACCO or Cooperative Society.”
SASRA noted that two main forms of remittances exist. The first is non-withdrawable deposits (BOSA) deductions, which serve as collateral for loans but are refundable to employees upon exit. The second involves remittances for loan repayments and credit facilities issued to employees by the SACCOs.

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Yetu SACCO Expands Horizons with Kitengela Branch: Paving the Way for Financial Inclusion and Growth

Yetu SACCO chairman, Mr. Mark Gitonga extended a hearty welcome to new members across the divide, saying that Yetu SACCO’s Kitengela branch is more than a new location; it’s a beacon of financial inclusion and opportunity. 



By Sharon Makiti

In a resounding declaration of growth and commitment, Yetu SACCO officially unveiled its latest jewel in the financial crown, the Kitengela branch. 

The new branch sets the stage for a financial adventure that transcends borders and promises to reshape the landscape of community finance, with promises of friendly services, impressive dividends, and a digital future. 

Yetu SACCO chairman, Mr. Mark Gitonga extended a hearty welcome to new members across the divide, saying that Yetu SACCO’s Kitengela branch is more than a new location; it’s a beacon of financial inclusion and opportunity. 

In his address, Mr. Gitonga introduced Yetu SACCO as a friendly financial institution, emphasizing its commitment to establishing a warm and welcoming atmosphere for all. 

Highlighting the SACCO’s robust financial position, Mr. Gitonga assured members that liquidity levels are high, making funds readily available. He underscored the efficiency of the loan approval and disbursement process, noting that approved loans are swiftly allocated within minutes or a few hours.

He also expressed pride in the qualifications, skills, and experience of the SACCO’s dedicated staff. He emphasized their readiness to cater to the diverse needs of members, ensuring that financial products are tailored to suit individual requirements.

He encouraged members to invest with Yetu SACCO, citing the impressive dividend returns. Mr Gitonga credited the high dividends to the exceptional management skills exhibited by the management team, directors, and staff.

The Kajiado County Government representative, during a speech welcoming the establishment of the new branch, emphasized the importance of tailoring financial products to the local pastoralist community while underlining the County Government’s commitment to supporting the SACCO’s expansion efforts.

In his speech read by the County representative Mr Daniel Motompa, the chief guest Mr. Patrick Kilemi, the Principal Secretary (PS) in the Ministry of Co-operatives and Micro, Small & Medium Enterprises (MSMEs) Development commended the Yetu SACCO for its exceptional performance in recent years. 

He noted that the SACCO’s strategy of increasing its branch network and offering attractive financial products had yielded positive results. In particular, he highlighted impressive statistics, including deposits of Sh1.9 billion from over 66,000 members, a loan portfolio of Sh.3.3 billion, and a reported turnover of Sh789 million in 2022.

Mr. Kilemi also reiterated the need for sustainability in SACCO operations, cautioning against overly attractive dividend payouts that could compromise long-term stability. He pledged the State Department’s commitment to addressing challenges in the cooperative sector, including unhealthy competition, non-remittance, weak governance, and cybercrime, through a variety of interventions, including the Deposit Guarantee Fund and Shared Services.

The PS also referenced the recently concluded Africa Climate Summit 2023 in Nairobi. He encouraged Yetu SACCO to consider important lessons learned during the summit as they continue their operations.

The speech also drew attention to the importance of legislative reforms, including Sessional Paper No. 4 of 2020, the Co-operative Bill 2022, and amendments to the SACCO Societies Act (SSA). These reforms are expected to enhance the safety of members’ funds and tackle issues such as corruption.

While officially declaring the branch open, the PS encouraged the SACCO to embrace digital transformation, acknowledging technology as the driving force in today’s business landscape.

The grand opening of Yetu SACCO’s Kitengela branch saw local business leaders expressing their excitement and satisfaction with the financial institution’s offerings. Addressing the gathering, former CEO Mr. John Mwiti shared his experiences with the SACCO and encouraged others to embrace it.

Mr. Mwiti, now an established businessman with ventures in both Mlolongo and Kitengela, commended Yetu SACCO for its role in supporting entrepreneurs like himself after retirement with competitive financial products and easily accessible loans. 

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Six in ten SACCOs embrace mobile money to enhance member services

Growing demand by SACCO members for real time funds transfer from accounts to mobile wallets increased mobile money use in the 2022



By Ngumbo Njoroge 

Members in six out of ten SACCOs can access services through alternative financial delivery channels such as mobile money and digital loans.

This, according to the Sacco Societies Regulatory Authority (SASRA), is driven by the growing demands of members for real-time transfer of funds from SACCO accounts to mobile wallets.
156 Deposit-Taking SACCOs are providing services to members through USSD code connectivity, short quick codes available on smartphones, and feature phones. 53 Non-withdrawable Deposit Taking SACCOs (NWDT) have also deployed quick shortcodes.
This means that members in 209 SACCOs can access mobile money services, 58 percent of the total 359 regulated SACCOs.

“The high level of USSD Code connectivity remains a critical milestone in creating accessibility of Regulated SACCOs’ financial services by their members in those parts of the country with low or no internet connectivity penetration,” SASRA said in the latest SACCO Supervision Report.
The data shows that the uptake of internet and app-based connectivity is still low, with only 75 DT SACCOS and 28 NWDT SACCOs.

SASRA notes that SACCOs have also bolstered their partnership with banks for the provision of ATM connectivity to members. 66 percent of the DT SACCOs are connected to at least one ATM platform, deepening access to members away from physical branches.
“The majority of ATM connectivity remains with the Cooperative Bank’s SACCO link which reported 97 percent of all the ATM connectivity with 111DT-SACCOs using their platform,” the regulator said.
SACCOs have enhanced partnerships and agreements with commercial banks, payment service providers, and fintech to increase operational efficiency, increase reach, and ward off competition.
The data shows that 45 percent of regulated SACCOs offer digital credit and loan facilities. This is highest among DT SACCOs at 61 percent while only 29 percent of NWDT SACCOs offer digital loans.

“The most popular digital credit and loan services’ delivery channel employed by Regulated SACCOs are the mobile phones through the usage of USSD Codes which is compatible with both feature and smartphones, thereby ensuring clientele’s reach even in areas with little or no internet coverage which is an important contributor to financial inclusion,” SASRA said.

The data shows that out of the 156 DT-SACCOs that have mobile phone connectivity services, only 100 have rolled out digital credit and loan products.
“This means that several DT-SACCOs do not necessary use their mobile phone connectivity capability as a platform for application, processing, approval or disbursement of credit or loan products but rather as a tool for members to access other financial services.”
The uptake of agency banking services is still low among regulated SACCOs, with only 23 percent undertaking the services. 39 percent of all DT-SACCOs and only 7 percent of NWDT SACCOs use the service.

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Stima SACCO Expands Network with Three New Branches 

The objective revolves around enlarging the business through extended distribution channels and robust resource mobilization.



Eric Mwai

Stima SACCO, a market leader, has added three branches to its network driving services to members.

The move aligns with the SACCO’s strategic growth plan aimed at amplifying operational efficiency, influence, and financial inclusiveness throughout the nation.
As an integral part of its 2019-2024 Strategic Plan, the branch expansion strategy signifies the Society’s commitment to transforming its business model. The objective revolves around enlarging the business through extended distribution channels and robust resource mobilization.

Stima SACCO CEO Dr. Gamaliel Hassan, speaking during the launch of the Electricity House branch, emphasized the Society’s intent to implement a decentralization policy. This policy aims to draw the organization closer to its membership base.
“The establishment of this branch reflects our unwavering commitment to meeting the evolving needs of our members and the modern demands of the digital age, especially in Nairobi, the economic hub of Kenya. This city thrives on innovation, entrepreneurship, and a dynamic financial sector,” Dr. Hassan said.

The three new branches located in Kisii, Meru, and Nairobi’s CBD within the Electricity House building raise the total branch count to twelve, with three situated in the city and nine dispersed across the country.
Dr Hassan underscored that the current expansion rests on three core principles: accessibility, convenience, and member satisfaction. With an extensive array of tailored financial solutions for its members, Stima SACCO aims to bridge gaps, and facilitate savings, investments, and affordably accessible credit facilities for Kenyans, catering to their specific needs.

“We recognize the importance of meeting the evolving needs of our members in a fast-paced world that demands efficiency and flexibility. The branch opening represents our dedication to making banking more convenient, hassle-free, and tailored to the diverse lifestyles of our members,” expressed Dr Hassan.
This development coincides with the government’s drive to make cooperatives a fundamental component of national financial inclusion efforts. Cooperatives hold a unique advantage due to their broader reach, particularly among those in the lower economic strata.
Leveraging technology to extend their reach, cooperatives like Stima SACCO have embraced innovations such as mobile banking. This allows them to offer services to a wider spectrum of customers, including those in remote areas. Technology has streamlined access to innovative products, unparalleled customer services, and the establishment of lasting relationships, forming a robust financial foundation for both current and prospective clients.

Additionally, Stima SACCO, as a customer-centric enterprise, has collaborated with Fintech companies to provide accessible and affordable digital financial services to its members. Examples include quick and convenient M-Pawa mobile-based loans of up to Sh120,000, access to low-premium insurance products, and secure alternative channels like M-Pawa mobile banking.
The Society has also intensified financial education programs, empowering members with enhanced financial literacy and management skills, enabling them to make well-informed decisions about their finances. Consequently, financial inclusion has risen as members are better equipped to access financial services and products.

Stima SACCO eyes growth in membership by over 30,000, surpassing the current count of 177,260 members by the end of December 2022. According to Chairman Eng. Albert Mugo, membership growth is anticipated to positively impact the society’s asset base, which stood at Sh54 Billion as of the close of the 2022 fiscal year.
The new branches are projected to generate employment opportunities for numerous Kenyans, supplementing the existing twelve permanent employees at each of the nine branches.

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