NEWS FROM VARIOUS MEDIA HOUSE REGARDING THE CO-OPERATIVE MOVEMENT SINCE JANUARY 2013 TO AUGUST 2013

August 2013

Table of Contents
CIC Insurance group............................................................................................................................................3 CIC Insurance in talks for Sh1.2bn expansion cash .......................................................................................4 Discipline pays dividend for Nakuru youth Sacco..........................................................................................6 Kiambu Sacco to open Nairobi branch ............................................................................................................8 Biashara Sacco Society to open new branch in Embu ..................................................................................9 Kitui Sacco launches irrigation scheme ........................................................................................................10 Narok Teachers Sacco records growth in assets ..........................................................................................11 Bingwa Sacco boss fined for fight at AGM ....................................................................................................11 Harambee Sacco posts 21% income rise........................................................................................................12 Harambee Sacco recovers Sh3.4bn from bad loans ....................................................................................14 Societies woo Kenyan investors in diaspora .................................................................................................15 Saccos to lend among themselves .................................................................................................................16 Transport Sacco adopts IT system to enhance the control of vehicles ...................................................17 Safaricom Investment Society ........................................................................................................................18 Safaricom Sacco unveils Sh1 billion housing project in Mlolongo ............................................................19 Sacco reverses decision to triple tax on dividends .....................................................................................20 SOT Tea Growers Sacco plans to build Sh146m tea factory ......................................................................22 Saccos to lend among themselves .................................................................................................................23 Central Bank retains base lending rate at 9.5 per cent ............................................................................23 Loan guarantees a double-edged sword for Sacco Societies ....................................................................25 Banks must take MPC cue and offer cheaper credit...................................................................................27 CBK cuts key lending rate to 8.5pc ...............................................................................................................28 Teachers clash with Sacco officials over low dividends ............................................................................29 Afya Sacco seeks CBK licence for conversion to micro-lender .................................................................30 Church Sacco bets on property market ........................................................................................................31 Co-op overtakes BBK, StanChart in earnings race ......................................................................................32 Coop Bank profit up by 17pc ..........................................................................................................................34 Co-op Bank targets counties with Sh500m growth plan ............................................................................36 Sacco officials face prosecution over Sh70m scandal ................................................................................38 Banks lose out to Saccos on lucrative youth, women loans ......................................................................39 Stima Sacco to issue cheque books to members .........................................................................................41 Stima Sacco hires 14 to boost services and grow revenue base ...............................................................42 Mwalimu Sacco ups financial deepening with opening of Eldoret branch ..............................................43 1

Mwalimu Sacco opens loan-book lead over rivals .......................................................................................43 This is what you’ve lost by ignoring the Sacco AGMs .................................................................................45 Bungoma Sacco rebrands .................................................................................................................................47 Asili Sacco assistant accountant charged with Sh22m theft .....................................................................48 Kakamega Teachers Sacco to pay Sh1.4m for unlawful sack ....................................................................49 Mwalimu National Teachers’ Sacco rolls out housing project ..................................................................50 Benefits of using Sacco savings scheme to plan retirement .....................................................................51 Saccos weighing up youth schemes ...............................................................................................................53 Saccos eye bonds market to raise capital amid lean times ......................................................................54 Machakos Sacco cautions against rogue land sellers ..................................................................................55 Insurance, Sacco fees to attract 10% tax .....................................................................................................56 Sony Sacco to open front office services this year .....................................................................................57 Murang'a boda boda men launch Sacco.........................................................................................................58 KUSCCO named best Sacco with highest growth rate ................................................................................58 Teacher dies at Sacco office ..........................................................................................................................59 How Sacco Societies can retain senior citizens as lifetime members .....................................................60 MP Gideon Mwiti Irea denies role in Sh780m pyramid scheme.................................................................61 Judge declines to reverse orders on ex-Sacco staff ...................................................................................62 Order on teachers’ pay saves lenders from defaults .................................................................................63 MP accused of promoting ponzi scheme .......................................................................................................66 Kililfi Teachers Sacco Rebrands .....................................................................................................................66

2

The move would see the profits earned shared with policyholders in form of dividends and reduced premiums. Mr Mugo said the cooperative society would offer members mortgages through savings. Last year. Corporate affairs and communications manager Michael Mugo said that the insurer had entered into an agreement with International Cooperative and Mutual Insurance Federation and it expects the deal would boost CIC’s footprint in the country.177 individual owners. especially through cooperative societies. though unexploited area in the insurance industry. The strategic share is locked in for five years (up to 2018) under a listing agreement with Capital Markets Authority with the balance floated at the Nairobi Securities Exchange.05 billion. the listed firm reported a Sh1. The offer to the policyholders.4 billion profit after tax putting the CIS share of the earning at about Sh1.CIC Insurance group A section of CIC Insurance policyholders are expected to own a piece of the underwriter through its co-operative society in a new plan set for approval this month. The stake still gets share of the profit. called mutualisation. The company changed its shareholding structure ahead on its listing last year. The change of name was part of the company’s market repositioning for growth as it plans to expand to Uganda and Sudan with the societies expected to benefit from the move. will give them a stake in Cooperative Insurance Society Ltd (CIS). CIC Insurance comprises 1.550 cooperative societies and 6. Cooperative Insurance Society will now raise capital largely from its members making them the majority owners of the stock. It is expected to hasten expansion of the company business. “We know this is a new concept in Kenya but we have done enough research and established it’s a potential.” Mr Mugo told the Business Daily. It was once known as Co-operative Insurance Services Limited (CIS) but later changed to the Cooperative Insurance Company of Kenya Limited in 1999. 3 . The federation is a global trade association representing more than 220 co-operative and mutual insurers from over 70 countries worldwide. the 75 per cent strategic owner of the listed CIC Insurance Group.

the CEO of CIC group in an interview. Britam and UAP in Uganda. The insurer. Photo/SALATON NJAU NATION MEDIA By GEORGE NGIGI Posted Wednesday.50. The insurer has plans to open shop in South Sudan by the close of the third quarter this year in a joint venture with the government of that country. targeting the small and medium enterprises which account for most of the growth in business. “We are raising some money ourselves and also looking for funding from our joint venture partners because it’s a huge endeavour. Vision 2030 secretariat director general Mugo Kibati (centre) and CIC Insurance Group CEO Nelson Kuria during the insurer’s launch of an annuity plan for retirees in Nairobi June 26. 2013. The co-op movement is.” said Nelson Kuria. closed Thursday at Sh5. June 26 2013 at 19:14 In Summary   The insurer has plans to open shop in South Sudan by the close of the third quarter this year in a joint venture with the government of that country. CIC Insurance is in talks with financiers for a Sh1. CIC is eying expansion into South Sudan.2 billion capital boost to fund expansion into South Sudan and Uganda. CIC Insurance in talks for Sh1. however. yet to be set up in the new state.CIC is one of the most aggressive insurers. CIC Insurance will be joining Britam and UAP in South Sudan and Jubilee. and is also eyeing expansion into Tanzania and Malawi. 4 . One of the large owners of CIS is Co-operative Bank of Kenya with just above 40 per cent. which listed mid last year at Sh3. which will hold a stake in trust for the co-operative movement.2bn expansion cash Elizabeth Wanjiru (of Citizen TV programme ‘Mother-in-law’). CIC Insurance has also set a target of expanding into Uganda before the end of the first quarter next year. For the two markets we should be having a minimum of Sh1. which will hold a stake in trust for the cooperative movement.55 a share although it has previously touched a high of Sh7.2 billion.

Mr Kuria said the group is willing to cede shareholding to a financier who comes on board with cash and professional experience of the new markets. “We are going to structure it that way (shareholding agreement) and you know they don’t take it for perpetuity. “Helios bought into Equity at a higher price even though it diluted shareholders.” said Mr Musau. arguing that a cash call to shareholders would be pre-mature as the stock is only 11 months old at the bourse and is yet to establish a performance track record to motivate investors to buy more shares.” said Eric Musau. CIC Asset Management and Takaful Insurance of Africa respectively. The company has a capital base of Sh2. CIC Group will own 69 per cent of the joint venture in South Sudan with the other stake being taken up by the Juba government following a resolution by its shareholders in its recent annual general meeting. “The low hanging fruits have been taken. CIC General Insurance.4 billion last year. CIC is also eyeing expansion into Tanzania and Malawi. CIC Insurance covers mainly with sacco associations. He did not disclose details of the targeted partners. 5 . Its entry strategy into South Sudan is similar to Co-operative Bank’s. but analysts said that given the amount needed for injection into the business the company’s market value could rise from the transaction. The insurance group has three subsidiaries and an associate company namely CIC Life. which has also been seeking partnerships with Sacco movements in neighbouring countries. Taking debt has its own challenges. Regional expansion by Kenyan insurers has appeared an un-attractive proposal given the low penetration in the country and the opportunities being provided by oil discoveries and entry of new corporates into the country. Ceding of shareholding to financiers could dilute the current shareholders. We need them to help establish because we also need capacity building.1 billion and recorded a profit after tax of Sh1. an analyst at Standard Investment Bank. but hinted that international lenders that also offer technical assistance would fit the bill. up from Sh584 million in 2011. Costs associated with taking debt include unpredictability in movement of interest rates and currency volatility where the loan is not shilling denominated.” said Mr Kuria. Mr Kuria ruled out the possibility of floating a rights issue to raise capital.70 per unit. the overall effect was that it propelled growth of the bank so it depends on the amount injected. CIC Insurance listed on the Nairobi Securities Exchange (NSE) last year and is currently trading at Sh4. even though we have low penetration it may require a lot of effort to benefit and there is also the aspect of following Kenyan companies in those markets.

CIC Insurance will be joining Britam and UAP in South Sudan and Jubilee. and we hope to even open a bank one day!” Ms Wangui says as the group turned into a micro-savings scheme. Such is the discipline in the group that last year. You do not have to be based in Nakuru town. CIC also has 200 acres of land in Kiambu County. Apart from geographical expansion CIC is also diversifying into real estate investment and has already acquired 512 acres of land in Kajiado County on which it plans to develop residential houses by 2015. they are welcome to be part of us. barbers. and members comprise tea vendors. with the option of contributing daily or weekly to reach the target. A shopper is under no pressure to buy. They open shop as early as 8 o’clock in the morning. Britam and UAP in Uganda. But our vision is indeed bigger. shoes and fruit salad. When a potential buyer stops by any of the stands. shoe shiners. As they go about their business on the side street. challenging one another on their favourite club. Members are not even allowed to smoke at work. curio dealers. “So long as the applicants understand and abides by the laws. We are giving opportunity to those with incomegenerating activities from other parts of the county. Hope and Vision Youth Sacco won a top prize for the best youth-run society in the country. One can walk through this kichochoro or alley without fear of mugging or of some hungry trader accosting them in the hope of making a quick sale. mostly aged between 20 and 35 years are well on their way to starting a front office micro-savings bank or FOSA. Neither will customers encounter drunk or disorderly traders. For a group that started out as a welfare society or chama. gngigi@ke. told Business Daily. we did not think we would do much more than being a merry-go-round where each member would regularly get a share of the savings. the young men among them engage in small talk about the English Premier League. the members. Members contribute Sh1. among other wares.nationmedia. 6 . Irene Wangui.500 every month.com Discipline pays dividend for Nakuru youth Sacco Hope and Vision Sacco Right behind the Barclays Bank building in Nakuru town is a group of young traders selling clothes. They do not discriminate on the type of business. as the outgoing chairlady. Kamiti Road and is close to completing a twin tower 12-floor office block. “When we started. water sellers and book sellers among other ventures—except contraband goods. more people asked to join paving the way for new members.” she says. he is given ample time to look around.

things are looking good.600 for new members. “We realised that our businesses could not grow unless we came together to help one another. and repayment of loans has kept them strong. He adds that the bond they have built over the years has also been cemented by their businesses and social lives. And so far. even the government and other international groups would not have shown interest in working with them. Ms Wangui says without a formal office. It is from there that they moved a step higher to form a Sacco. 7 . They have been working closely with an international non-profit organisation from Britain. Comprising 102 members so far. There are 10 different types of loan products that the Sacco offers its members. with the highest being the Mbuzi loan that one can pay at 15 per cent interest for up to four months. 2011 and 2012. Other financial institutions demand sureties and other documents that as micro-business people we do not have. The money is to help members during festivities such as Christmas holidays and is repayable within four months. and how to make the group become much more than a merry-go-round. Balloon Kenya plans to use the Nakuru small businesses model to teach successful business start-up in other parts of the world. the group undertook a three-day training where they were taught how to grow their businesses. Each product comes with its own repayment interest. They have now opened an office at the Salman Centre in Nakuru Town which handles their administrative work. Hope and Vision Youth Sacco has bagged several trophies and awards. Balloon Kenya. along with constant advice and follow-up. The organisation then offers grants for kick starting the best business ideas. Grow business In 2007. Mr Kimani adds that discipline in the payment of monthly contributions. It was named the best-managed Sacco in Nakuru for three years from 2010. says Mr Kimani. The group. Some are soft loans such as money for buying food and home improvement. There are also business developments products from which members can borrow up to two times their savings.” The registration fee is Sh2.“We cannot accept a member who sells illegal products from poaching or drug peddlers.” says credit officer James Kimani. The group’s aim is to inculcate a savings culture as well offer loans at affordable rates. Potential members must provide all their personal and business details. brings in volunteers to work with young entrepreneurs as they exchange and refine business ideas into workable enterprises.

He added that they have a strategic plan which will take five years to meet all the regulations required to become a bank with at the moment having a share capital of Sh 130 million. "We want to get closer to our members and also target small business owners who have no access to banks as we realized that most of our members are farmers and take their produces and wares to sell in Nairobi and we did not have a branch there so it would be easier for thenm to transact business with us closely.BY STANLEY NJENGA A Kiambu based microfinance K Unity will open up its services in Gikomba Market in Nairobi and other parts of the country as a strategic plan of becoming a bank.000 since the teachers who were their members formed their own Sacco hence making it impossible for the micro finance reaching the threshold of becoming a bank. The institution has a share capital of Sh130 million.00:00 -.In 2011 they were the highest dividend paying Sacco in Nakuru and also the Sacco with the highest number of women members in the committee.com Kiambu Sacco to open Nairobi branch Tuesday. nothing is too hard to achieve. For a group whose ground values. Njoroge said that the micro finance which is a saving and credit cooperative society had to change its name from Kiambu Unity Finance to K Unity since their membership declined from 130. "The micro finance has embarked on a strategic plan which we hope to take 5 years to becoming a fully-fledged bank and at the moment we have opened up selling shares of the micro finance which the people has responded well and by opening branches all over Kenya and by making alliances with institutions which will help the sacco grow. 8 . basic friendships and mutual understanding are still their strongest principles. the youthful businessmen and women walked away with the top prize for the best managed sacco nationally. 2013 . The future for Hope and Vision Sacco is bright.nationmedia. April 16. They are focusing on opening a bank for small-scale traders." He added. Speaking yesterday in the offices in Kiambu town during a signing of documents with Kenya union of commercial food and Allied workers in enhancing good working condition of staff working in the microfinance Chairman Joshua Njoroge said that the expansion of the microfinance will help in gaining more clientele and also moving closer to thwe main members who are small businessmen and farmers who take their produce to Nairobi. mgakii@ke.000 to 80."said Njoroge. Last year.

the society's share capital rose from Sh 106.BY WAMBUGU KANYI THE Biahara Sacco Society Joseph Njamuku said the society will open a branch in Embu this year at a cost of Sh 2. Gakindu. Karatina.” he said. Najamuku said the society will establish a network and partnership with the county governments and take advantage of governmen –sponsored programmes of wealth and job creation.4 million to Sh 121.Biashara Sacco Society to open new branch in Embu Tuesday. The society is also planning to open other branches in Meru. In the last financial year.6 million. Nyeri town. Nyeri town.00:00 -. Nyahururu towns and Nairobi city. 9 . Currentlyit has branches in Othaya.5 million representing 14 per cent growth. April 16. Gatarakwa and Nanyuki. Nakuru. “Let us forge ahead in the new devolved government guided by our robust policies to achieve Vision 2030 and Millennium Development Goals. Speaking during this year’s Annual General Meeting at YMCA hall. the Sacco chairman Joseph Njamuku said the branch will be useful to the local farmers and business community since the county is an agricultural area. 2013 .

Earlier another batch of 100 farmers had been allocated their plots. If one is not able to operate on his peace of land efficiently.BY MUSEMBI NZENGU The 300 farmers who have been allocated plots at Wikithuki Irrigation Scheme in Tseikuru district. then it will be taken away and given to someone else.Kitui Sacco launches irrigation scheme Thursday. 2013 . “Many people have made haste in acquiring plots but to plant and harvest a good crop one must be thoroughly committed. will be dispossessed of the same if they do not utilise the land appropriately. Every member is entitled to an acre of land in the scheme. 10 . He said the project was not for the faint hearted but result oriented committed farmers.” said Kakuru. A tough talking Wikithuki Cooperative Society Chairman William Nzomo Kakuru said the project dubbed Operations Mwolyo (Relief Food) Out (OMO) had no room for joyriders.00:00 -. The government has interest and has put a lot on money into this project and cannot allow it’s money to go down the drain. Kitui. April 4.” said Kakuru. “I want to stress that we must take this irrigation project serious. It had been code named Operation Mwolyo (Relief Food) Out. Kakuru was speaking at the site of the project on Tuesday after presided on the balloting to allocate 200 members of the cooperative society an acre on land each. because we need to end dependence on relief food in this area.

AT KIRUI NAROK Teachers Sacco Society has recorded a growth in assets and membership in the 2011-12 financial year. He said the 300 farmers were not only expected to produce enough food for their families but surplus for sale. The Sacco's bookshop profit however decreased from Sh1. has been jailed for three months by a Kerugoya court after he was convicted for creating disturbance at an annual general meeting.00:00 -.803. Speaking during the AGM yesterday at Africa Hope Hall in Narok town. Munene said increased interest rates by banks from 13 per cent to 23 per cent affected the financial position of the society that led to a decrease in members’ interest. 11 . The chairman urged the members to save regularly so as to build a strong financial base.00:00 -.He said although work at the scheme was labour intensive and a bit expensive for ordinary members all must do their best to meet the set goals. The total assets increased from Sh459. “The loans to members increased by 8. while the membership grew from 2059 to 2326. Bingwa Sacco boss fined for fight at AGM Monday. Kerugoya acting Principal Magistrate Kennedy Chariot who convicted William Njiraini Nguru of the offence however gave him an option of Sh10. He said the Sacco intends to expand operations by introducing new and innovative products and services to broaden its revenue base and improve service delivery.890.630 to Sh484. mobile banking and SMS banking. April 24. the society adapted new products such as ATM services.BY KIPLANG&#039. 2013 . Narok Teachers Sacco records growth in assets Wednesday.667. April 8. The chairman attributed this to increased purchase cost.” said Munene.BY JANE MUGAMBI A former Director with the Bingwa Sacco in Kirinyaga.278. the Sacco's chairman James Munene attributed the growth to the investors' commitment. Nguru who had denied the criminal charges through his lawyer Kimani Njuguna pleaded with the court for leniency upon being convicted.257.007 to Sh584. And turnover reduced to Sh41 million in 2012 from Sh43 million in 2011. Nguru had been charged that on April 27 last year within the Kerugoya Catholic church grounds he stormed into an annual general meeting for the Sacco and created disturbance by engaging its official in a physical fight.000 fine.” said Munene.2 per cent to Sh409 million up from Sh378 million in 2011. high cost of transportation and decrease in discount from book sellers. 2013 . “To enhance productivity and bring services closer to members.

acknowledges a sharp decline in income from the Front Office Banking Services which was occasioned by suspension of all income generating products in the department due to poor loan recovery. The prosecution through prosecuting Officer Sammy Mbarani told the court to treat him as a first offender though the nature of the offence he has committed was serious. the society's interest income rose by 21 per cent to Sh1. Harambee Sacco posts 21% income rise Monday.He mitigated that he was a father of six children and that he is the sole breadwinner for his family and as such the court should consider the factors." reads part of the statement by the chairman to be read at tomorrow's meeting. The Sacco has been established that it has expelled Nguru and revoked his membership to the society.1 billion up from Sh980 million that was recorded in the previous year. the society recorded a 10 percent growth in member deposits from Sh10. He was expelled at a specially convened general meeting held at the Kerugoya stadium two days after creating disturbance and was seen not to be fit to be a member of the Sacco. 12 .4 billion. The loans to members also grew from Sh13 billion to Sh14.3 billion. however.According to audited financial results. 2013 . April 29.00:00 -BY STAR REPORTER The giant Harambee Sacco interest income grew by Sh120 million between the year 2011 and 2012.3 billion to Sh11. "Apart from the challenges we had. Society chairman Kabira Njine confirmed that Nguru was no longer a member after he caused the disturbance saying that he went against the Sacco’s by-laws. This growth was realised despite uncertainties which were witnessed within the financial market sector.The sacco which holds its Annual General Meeting tomorrow. The cooperative movements are some of the institutions earmarked for great reforms following the promulgation of a new constitution.

Sasra though. Harambee Sacco is planning to establish county offices as a move to streamline its operations alongside the devolved system of government. Mr Ademba said Harambee Sacco had cut last year's non-performing loans by Sh3.1 billion funds tied to defaulted loans given out to members. Last fiscal year.000. having fast tracked defaulters and made them to pay.7 billion while loans given out are Sh14. the Sacco said.” Mr Ademba said.000. The audited financial statements at the Sacco show that the combined balance of share capital and member deposits stand at Sh11. approve the budget and hold the rotational elections of new directors for the next one year. In this regard. The society further proposed an eight per cent deduction of its members’ basic salary in order to raise the revised Sh3000 monthly contribution. Additionally. In the recommendations. Members would also be required to have shares worth over Sh20. He added that investigations into graft charges involving the three suspended Sacco officials were still on-going.000 up from the current Sh1. “The frauds involving ATM and mobile money transactions didn’t eat much into our total loan portfolio thus our positive results. the Sacco has proposed an expansionary policy to boost its liquidity position. a sum of Sh358 million went towards servicing loans it had taken from commercial banks to plug deficits. dividends would be ploughed back as additional shares instead of giving out cash to members. Speaking at the Sacco’s annual general meeting. Sacco Board chairman Macloud Malonza said the soft lender last year posted a Sh780 million profit despite management issues at the top. the Sacco Societies Regulatory Authority (Sasra) CEO Carilus Ademba has disclosed. Meanwhile. 13 . he said.For in stance. During the AGM. “The Sacco has made an impressive comeback since last year having been faced with fraud cases involving some officials. Harambee Sacco has in the last six months recovered 83 per cent of the Sh4.4 billion down to Sh700 million this year. members are expected to go through the financial statements. a member would pay a minimum deposit of Sh3. Harambee Sacco seeks to expand its cash reserve as it adopts new strategies towards increasing its lending capacity. is still monitoring the Sacco’s operations to ensure it does not revert on gains made.The AGM will be held at the Kenya School of Monetary Studies. The Saccos’ regulator last year suspended the chief executive of Harambee Sacco and two other managers who it described as masterminds in defrauding the society through mobile money and ATM transfers.” Mr Malonza told the Business Daily on the sidelines.3 billion.000 up from Sh3.

In this regard.” Mr Ademba said.4 billion down to Sh700 million this year.1 billion funds tied to defaulted loans given out to members. Speaking at the Sacco’s annual general meeting. The saccos’ regulator last year suspended the chief executive of Harambee Sacco and two other managers who it described as masterminds in defrauding the society through mobile money and ATM transfers. having fast tracked defaulters and made them to pay. Mr Ademba said Harambee Sacco had cut last year's non-performing loans by Sh3. a sum of Sh358 million went towards servicing loans it had taken from commercial banks to plug deficits. Sacco Board chairman Macloud Malonzo said the soft lender last year posted a Sh780 million profit despite management issues at the top. “The Sacco has made an impressive comeback since last year having been faced with fraud cases involving some officials. Last fiscal year.4bn from bad loans Posted Tuesday. the Sacco said.” said Mr Malonza. April 30 2013 at 15:47 Harambee Sacco has in the last six months recovered 83 per cent of the Sh4. the Sacco has proposed an expansionary policy to boost its liquidity position. he said. 14 . “The frauds involving ATM and mobile money transactions didn’t eat much into our total loan portfolio thus our positive results. the Sacco Societies Regulatory Authority (Sasra) CEO Carilus Ademba has disclosed.“This fact has prompted us to come up with these new strategies to correct financial imbalances. Meanwhile. The regulator said that the Sacco had negative core capital and had material variances in between various outstanding loan portfolio reports and the provision for loan losses. Sasra though. Harambee Sacco recovers Sh3. This comes in the backdrop of a Sasra inspection carried out last year which found out that the Sacco was in an acute liquidity crisis with its standing on all prudential parameters being dismal. Harambee Sacco seeks to expand its cash reserve as it adopts new strategies towards increasing its lending capacity. directors and Sacco members had been given credit without adequate collateral and that there was a backlog of Sh1 billion in loan applications dating back four years. The inspection found that employees. is still monitoring the Sacco’s operations to ensure it does not revert on gains made.” Mr Malonzo told the Business Daily on the sidelines. He added that investigations into graft charges involving the three suspended Sacco officials were still on-going.

many Kenyans living abroad have been disappointed by agents.. Jackson. According to Jackson. He now earns annual income of $160. Some get land prices quoted higher than the real value of the parcel. Additionally. “Getting reliable and honest partners who can represent our interests on the ground can be a challenge.com Posted Wednesday. who is a member. but they are most vulnerable to fraudsters because they are not present to fully engage in their projects.” he says. encouraged him.. Societies woo Kenyan investors in diaspora By IMMACULATE WAIRIMU immawairimu@yahoo.In the recommendations. 15 . is a Kenyan living in Texas. dividends would be ploughed back as additional shares instead of giving out cash to members.3 billion. USA.000 up from the current Sh1.000. The regulator said that the Sacco had negative core capital and had material variances in between various outstanding loan portfolio reports and the provision for loan losses. based on its reports.000 up from Sh3.000.7 billion while loans given out are Sh14. The inspection found that employees.000. The performance of the cooperative. The society further proposed an eight per cent deduction of its members’ basic salary in order to raise the revised Sh3000 monthly contribution. The audited financial statements at the Sacco show that the combined balance of share capital and member deposits stand at Sh11. This comes in the backdrop of a Sasra inspection carried out last year which found out that the Sacco was in an acute liquidity crisis with its standing on all prudential parameters being dismal. “This fact has prompted us to come up with these new strategies to correct financial imbalances. Members would also be required to have shares worth over Sh20. members enjoyed a dividend of five per cent. who prefers to use one name. In 2005.” said Mr Malonzo. He was introduced to an investment cooperative in Kenya by a friend.8 million. This rose to 42 per cent in 2010.” says Ms Macharia. a member would pay a minimum deposit of Sh3. relatives. May 8 2013 at 04:42 In Summary   The Safaricom Cooperative released its common bond two years ago and invited non-staff members to invest. and friends they have entrusted with investment money. an equivalent of Sh12. “Kenyans in the diaspora are keen to invest at home. directors and Sacco members had been given credit without adequate collateral and that there was a backlog of Sh1 billion in loan applications dating back four years.

According to a Stanbic Investment Management Services report. May 8. Cooperatives are becoming the vehicle of choice for real estate investors. The highest dividend paid out was 45 per cent in 2011.600 to 1. there was much more stock than in the previous year.. and contractors. Cooperatives offer good returns that remain unmatched by banks.805. Data from the Central Bank show that diaspora remittances were about Sh50 billion in the first six months of 2012. but more so in buying land. 2013 . This rose to 42 per cent in 2010. up from Sh19. With a membership of 1. last year’s remittances from Kenyans living abroad increased significantly. but they are most vulnerable to fraudsters because they are not present to fully engage in their projects. architects. diaspora remittances have contributed more than Sh251 billion to the Kenyan economy in the past five years. up from Sh34 billion in 2011. “Kenyans in the diaspora are keen to invest at home. The Safaricom Cooperative released its common bond two years ago and invited non-staff members to invest. members enjoyed a dividend of five per cent. except that he would prefer that the organisation specifically sets up a diaspora department to deal with their unique issues. and the United Arab Emirates. Prudence is key in any investment acquisition. which when reinvested would give a higher principle. The total assets in 2012 rose to a value of Sh503. According to SIC marketing manager.” says Ms Macharia. Saccos to lend among themselves Wednesday. This has grown to Sh230 in 2013. a figure that is within the market ranges of between 12 per cent and 14 per cent. South Africa.So far. In 2005. 16 .598. Ms Joyce Nyambura Macharia. This marked a 47 per cent rise in the first six months of 2012. a situation attributed to the election season. says Ms Macharia. The share value growth in 2009 was at Sh100. Some get land prices quoted higher than the real value of the parcel. Jackson says he is happy with the services of Safaricom Investment Cooperative (SIC). Buying property through a cooperative means that the organisation handles all the due diligence. Most of these investors are from the US. She believes cooperatives held the key in attracting the money. It drastically dropped to 28 per cent in 2012. especially those living in the diaspora. including the payment of fees to lawyers..700 persons. The fixed rate of return is 13 per cent.056 in 2009.783. five per cent of the members are from the diaspora while 80 per cent consist of Safaricom staff. Though investors were not keen on buying land.BY STAR REPORTER SAVINGS and credit cooperative societies plan to start lending among themselves to help meet loan demands as members avoid higher interest rates charged by banks. UK.00:00 -.

4 million to Sh25 million. Sauti Sacco chair Elly Ndwiga said during year 2012. ushers in travellers at Nyeri bus stage. 17 . December 27 2012 at 11:44 Kenya’s leading transport Sacco. in uniform. "Let’s put our house in order. Let’s make solutions that should be binding.1 million with a waiting period of four months. Joseph Maiko has said demand for loans from Sacco members has become so high forcing some of the societies to decrease repayment periods for disbursed funds. The new system which is being fitted by Frotcom East Africa Ltd and Airtel Kenya will allow the management to track all vehicles within the country.Makadara District cooperative officer.6 million and the institutional capital increased from Sh4. 2NK is set to adopt a new Fleet Management System in a bid to gain more control of its 550 vehicles." Maiko said. own our societies’ members should be asked to add more money in savings instead of having a back log or even decrease the loan repayment period. The Sacco which pioneered parcel delivery by matatu vehicles is set to launch the new system in January 2013. The Sacco which divested from Cooperative bank of Kenya last year said the deal boosted its core capital grew from Sh5. The 37th Sauti Sacco AGM approved a payout of dividends at 10 per cent for the shares and payout of interest on members deposits at five per cent. Maiko was speaking at the annual general meeting of Sauti Sacco whose members comprise of employees under the Ministry of Information and Communication. JOSEPH KANYI By NGONDI MBURU Posted Thursday. Transport Sacco adopts IT system to enhance the control of vehicles 2NK Sacco driver Samuel Njoroge.9 million to Sh26. the organisation recorded a loan backlog which stands at Sh14.

Through the system. one of its main advantages is the ability to notify the sacco management in case of over-speeding. The new system which is being fitted by Frotcom East Africa Ltd and Airtel Kenya will allow the management to track all vehicles within the country. The system will also keep performance records of each vehicle for a long duration which can later be retrieved for assessment. minimising possibility of theft by drivers.” said Mr Kahiro. According to the chairman. a petroleum tanker. Some of the sacco’s investments include two petrol stations. the sacco is embracing the new system to help it enforce the new traffic regulations. It will also give alerts when a vehicle diverts from its intended route. The system will involve insertion of a gadget that will allow geo-tracking of the more than 550 vehicles in the sacco’s fleet. “ICT is the way to go in business today and we want to do this to enforce compliance to traffic rules rather than evasion. the driver and the route the vehicle is plying.” said the Sacco’s Chairman James Kahiro. This is expected to assist in cases of carjacking or vehicle theft. and an insurance agency that serves members and the public. But the sacco’s most notable initiative that transformed the industry was setting up of parcel delivery services.“We want to reduce accidents on our roads and to manage our vehicles professionally.” said Mr Kahiro. “It will enable us to see the way the vehicle is moving and in case of over-speeding we will be able to contact the driver. Safaricom Investment Society 18 . According to the chairman. the management will know at what time the driver started working and what time he spent on the road. 2NK sacco was formed in 1993 as one of the first transport saccos in the country by a few matatu owners plying the Nyeri-Nairobi route. The 2NK chairman has urged other transport saccos in the country to follow suit and acquire similar management systems. Estimates show that the Sacco’s members will save nearly Sh40 million annually by sealing loopholes through which money is lost. This will help us to manage over-speeding which is the biggest cause of carnage on our roads. The system will also help the sacco management to track petrol consumption in their vehicles. It will provide details of the vehicle including the number. Today the sacco has a membership of 400 matatu owners and has advanced loans to the tune of more than quarter a billion shillings to members. The society enabled members to pool resources and implement market-oriented strategies at a time when the sector was famed for anarchy and lack of courtesy.

“It is envisaged that the cooperative sector will provide a quarter of the national target of 150. The society. University administrators say rising student enrolment has made it more attractive for private investors to set up hostels from which they stand to reap handsome returns. Meanwhile.400 members. Under public-private partnership. May 9th 2013 a 22:08 GMT +3 By Fred Obura Safaricom Investment Co-operative has unveiled Sh1 billion housing project on a five acre parcel of land in Mlolongo. Speaking Thursday during the unveiling of the society’s first housing project – Blue Bells Garden – the board chairperson Mackrine Abukah said the society sought to tap into increased number of students seeking accommodation around universities. Safaricom Sacco unveils Sh1 billion housing project in Mlolongo Updated Thursday.Safaricom Investment Cooperative (SIC) is set to provide decent accommodation facilities to university students as it seeks to diversify its investment options. “We are exploring two options – public-private arrangements and going alone. 14 chartered private universities and 12 with Letter of Interim Authority. especially at county level. This comes amid rapid expansion of public universities currently standing at 22 which has piled pressure on the existing accommodation units. Cooperative Development Secretary Nelson Githinji urged other saccos to emulate Safaricom and initiate housing projects directed at tackling accommodation problems. In total. comprising of 1.” Ms Abukah told the Business Daily on the sidelines. The cooperative has reserved Sh50 million seed capital to construct hostels on a 10-acre land targeting KCA University students in Kitengela. the society will adopt a build-operate-transfer (BOT) model where the investor constructs the hostel and collects rent for a given time depending on project capitalisation before handing the building back to the university. Safaricom Investment Cooperative also plans to undertake value addition for agricultural produce and facilitate Kenyans in the diaspora to invest in the country’s real estate sector.” he said.000 housing units per year according to 2030 Blueprint. will buy land around certain universities and put up accommodation structures. there are 48 universities in Kenya – 22 public (government funded). adding that the board is currently in talks with a number of universities. 19 .

The other planned areas of investment include development of affordable housing.000 housing deficit that the country experience annually. Safaricom Chief Executive Officer Bob Collymore said the first phase will be ready in September 2014. SIC will be rolling out similar projects targeting Kenyans in the Diaspora to enable them to effectively participate in the real estate space in Kenya.” The project will also accommodate a commercial centre to serve its residents. “This project is meant to bridge the annual housing deficit in Nairobi. Sacco reverses decision to triple tax on dividends 20 . “As SIC we intend to raise Sh1 billion capital by the end of 2015 and already have various programs in place to achieve this.” said Mackrine Abukah. SIC Chairperson.” said Collymore yesterday.The 300 housing units dubbed. while meeting the rising demand for gated communities. which is targets middle and upper income earners working in Nairobi and Machakos counties is meant to address the rising demand for gated community housing around the country.6 million for three bedroom and Sh5. Blue Bells Garden will be constructed in two phases.” she said. while the second phase will be ready at the end of 2015. “SIC has planned to invest more than Sh1billion in the entire project with the first phase having 160 units and the second phase having 140 units.6 million for two bedroom units respectively. Abukah said that the pricing of the houses will range from Sh6. value addition in agricultural produce and student accommodation projects. The project will be financed through a partnership with Co-operative Bank Speaking during the ground breaking. “These houses will be a mix of two and three bedroom units and will contribute towards reducing the 150. The development. They will be completed in 2015.

19 per cent higher than the Sh345 million earned last year. Sacco general manager Henry Nakaya said last year’s directive.000 members of the agricultural sector sacco and its officials. especially after the members claimed that the extra money deducted was never remitted to the taxman. has reversed a controversial decision to triple withholding tax on dividends. Some of the members speaking on condition of anonymity said the sacco withheld Sh46 million when it raised the tax rate. Tension has been brewing between the more than 30.The Ukulima Sacco Mombasa Fosa branch. which raised withholding tax on dividends from five to 15 per cent. “We have held several discussions with members and come to an agreement that extra money withheld from them last year will be released together with this year’s dividends. On Thursday. the Ukulima Co-operative and Savings Society. This silence has led us to raise this issue again because we don’t know which rate they are planning to apply this time round. FILE By George Posted Sunday. Omondi 21 .” Mr Nakaya said. “We have never received any official communication despite several letters addressed to the management. The management also proposes a dividend of Sh29. the sacco released its financials indicating that Sh409 million will paid on member’s deposit this year. The settlement of the issue sends a signal to societies that tax on dividend is restricted to five per cent.5 million on member’s savings.” said one of the members. April 28 2013 at 17:19 One of Kenya’s largest Sacco. averting a showdown with members at its AGM on Monday. was based on misinterpretation of the Income Tax Act.

Sot Tea Growers Savings and Credit Cooperative Society said it had already acquired a six-acre plot at Merigi shopping centre where the factory would be set up. He added that alongside constructing the factory.” reads KRA’s letter to the sacco.com SOT Tea Growers Sacco plans to build Sh146m tea factory Updated Sunday. “If your members feel they have been overtaxed. “We are concerned that KTDA factories are now viewing us as competitors and have been urging farmers not to open accounts with us. Sacco’s chairman Zakayo Sang’ said the factory would help reduce congestion in existing KTDA factories and help guard farmers from losses. cited section 35 of the Income Tax Act which requires entities to deduct 15 per cent on “interests paid to resident persons” when it decided to increase the rate of withholding tax on dividends. Kenya: Set up in 1992.000 members with a share capital of Sh146 million A farmers cooperative society in Bomet County is set to construct a multi-million tea factory and at least three satellite withering centres in the next one year.nationmedia.The sacco officials had through a letter dated May 24.” 22 . which was set up in 1992. they should follow the law by submitting the Self Assessment Return for the respective year and claim refund. it has 15. Sang’ said already three commercial banks have expressed interest in financing the project but the Sacco has not settled on any. But a letter written by KRA on June 6.” he said.000 members with a share capital of Sh146 million. has 15. omondi@ke. Speaking during the launch of the Sacco’s share drive. the cooperative’s Chief Executive officer Leonard Sang’ said members proposed the initiative following congestion in the Kenya Tea Development Authority (KTDA)-run factories that have left farmers experiencing huge losses. We appeal to the Government to intervene on this issue to enhance positive competition. Shareholders will contribute Sh120 million while the rest would be financed through loan capital. 2012 refers the warring parties to section 3(a) (b) which specifies the withholding tax rate on dividends as five per cent. Mr Sang’ hit out at the KTDA run factories for failing to allow farmers to open accounts with the Sacco. April 21st 2013 a 22:41 GMT +3 BY EDWIN MAKICHE Bomet. He added: “We took the initiative at the best interest of farmers who have been incurring huge losses when the KTDA factories fail to collect their produce. 2012. It plans to invest Sh330 million in the project. the Sacco also planned to construct three satellite withering centres to enable farmers pluck their tea throughout the day. The Sacco.

" Maiko said. Central Bank retains base lending rate at 9.Sang’ added that the withering centres was a step forward in protecting farmers from such losses. Speaking during the function. 2013 . Bomet Governor Isaac Ruto lauded the move pledging his administration would contribute another Sh40 million towards the project. Government support He said through the initiative. He said the county government would further construct another six satellite withering centers in addition to the three. May 8. The 37th Sauti Sacco AGM approved a payout of dividends at 10 per cent for the shares and payout of interest on members deposits at five per cent. Maiko was speaking at the annual general meeting of Sauti Sacco whose members comprise of employees under the Ministry of Information and Communication. The Sacco which divested from Cooperative bank of Kenya last year said the deal boosted its core capital grew from Sh5. Joseph Maiko has said demand for loans from Sacco members has become so high forcing some of the societies to decrease repayment periods for disbursed funds.00:00 -.5 per cent Updated Tuesday. "Let’s put our house in order. Mr Ruto decried KTDA’s failure saying his government would advocate for the liberalisation of the tea sector. own our societies’ members should be asked to add more money in savings instead of having a back log or even decrease the loan repayment period.BY STAR REPORTER SAVINGS and credit cooperative societies plan to start lending among themselves to help meet loan demands as members avoid higher interest rates charged by banks. “I will hold discussions with colleagues in other tea growing zones as we re-evaluate the role of Saccos to lend among themselves Wednesday. Let’s make solutions that should be binding. Sauti Sacco chair Elly Ndwiga said during year 2012. the organisation recorded a loan backlog which stands at Sh14. Makadara District cooperative officer.1 million with a waiting period of four months.9 million to Sh26.6 million and the institutional capital increased from Sh4. tea farmers would pluck their tea throughout the week as opposed to the current practice in which KTDA-run factories dictate specific days that farmers can pluck tea.4 million to Sh25 million. March 12th 2013 a 22:00 GMT +3 23 .

50 per cent. the CBK can afford to remain on hold for a while. This is because banks have a reason to maintain their high lending rates after the Central Bank of Kenya ( CBK) decided to retain its lending rate at 9. so the question now is what we may see over the course of the cycle. Inflation is also well within the desired range. Commercial banks are charging upwards of 17 per cent to 21 per cent on most of their loan facilities. Regional Head of Research. Markets up The March 4 polls went on smoothly without the violence similar to that which occurred in 2007. “The impact of the earlier easing is still feeding through to the real economy after all. He added that having eased aggressively prior to the March meeting. the market has been consistently surprised by the pace of CBK easing.50 per cent. Africa at the Standard Chartered Bank. “In recent months. Growth is seen to be recovering nicely. The Monetary Policy Committee (MPC) – an organ of the CBK responsible for formulating monetary policy – retained the Central Bank Rate (CBR) at 9.By Jackson Okoth Consumers of credit will have to wait for a long time before they can return to the banking halls. 5 per cent. with the magnitude of each rate cut typically a little more than the market consensus for each of those meetings. a level that has forced most people in the private sector to seek alternative sources of funds.” said Khan.” said Razia Khan.” said Khan. 24 . there had been some risk of easing. Biggest losers On the list of big losers following on this decision are small business and individual households. given firmer credit growth and recent developments. But the additional month on month inflationary pressure observed in January and February could explain CBK pause at this stage of the cycle. and decided to lower the CBR by 150 basis points from 11 per cent to 9. to give the MPC more time to assess the impact of earlier easing. who will have to wait a little longer before they can access affordable bank credit. “Given the relatively smooth passage of elections and the rally in Kenyan markets subsequent to this. This is the same level the committee set when it met in January 10. should current market conditions require it.

May 5 2013 at 15:07 In Summary  OPIYO Saving societies adopting alternative ways of guarding against risks as defaults hit membership and earnings.” said Khan. FOTOSEARCH By ISAIAH Posted Sunday. whose saving in the sacco had hit Sh320. the sacco decided to pass on the burden to Arnet. which is our core scenario given the post-election environment.000 from the society. perhaps of another 100 bps in total. Loan guarantees a double-edged sword for Sacco Societies Before you become a loan guarantor. Arnet’s colleague changed employers and left without fully repaying the dues. Arnet. narrating how she had lost her entire savings in repaying a loan for a colleague. and inflation remain range bound in lower single digits. understand the financial liabilities you will incur in case of default. Arnet. After several attempts to follow her up failed. but she did not consider the consequences. Arnet had been saving with her company sacco for the last three years hoping to qualify for a loan when a colleague requested her to stand as her guarantor for a loan of Sh300. then we believe there is still a good chance of further easing. 25 . I had planned to cover something else other than sacco societies this week until I saw a letter from a reader.Remain stable “Should most variables remain stable. Several months later.000 obliged.

Low dividend is the surest way to kill morale. most income earners save through the saccos to earn lucrative dividends.It’s the guarantor’s obligation to pay if the debtor defaults or dies but this penalty has demoralised and set back Arnet who has stopped her contributions to the sacco. Although they still insist on guarantors as a requirement for credit. Sometimes members pull out when they fail to secure guarantors. the cushion is proving to be an arrow rather than a shield for the saccos’ development. Defaults have continued to impact saccos and their membership in the following ways. People who have no patience to wait withdraw from the saccos to seek credit elsewhere. Sometimes members applying for loans have to wait for several weeks to give the sacco sufficient time to mobilise savings or cash from loan repayments. Fear of guarantorship A reduced or depressed loan book will further affect the profitability of the sacco and eventually investments. Many saccos are already adopting alternative ways of risk measures such as asking for collateral for those unable to get guarantors. 26 . Reduced capital base for saccos to lend out Saccos rely on members’ contributions. Lack of capital to lend out also means the society will lose the opportunity to earn from interest on loans something which would impact on the profitability of the society and eventually dividend to members at the end of every trading year. When this happens. A guarantor is not only bound to pay the loan amount if the debtor defaults. It is also important to note that besides the motivation to access affordable loan facilities. defaults would force the sacco to seize the savings of the guarantors until the loan is fully recovered. Low morale among members and diminishing appetite for savings The issue of guarantorship affects saccos and their members alike. the impact will be felt through reduced savings and falling sacco membership. Members like Arnet can neither borrow against their deposits nor access their savings should they opt to terminate their membership until the money is fully recovered. This explains why the issue of guarantorship has continued to subdue the growth of saccos instead of serving as an impetus. Many saccos face collapse for lack of members. Loss of savings to the sacco in case of default Since saccos insists on guarantorship as a risk management measure. Such cases have become common among credit societies. Reduced or depressed deposit resulting from withdrawal would translate to low capital base. but the transaction could impact his credit score and loan eligibility. Whereas guarantorship in this situation would cushion the sacco from bad debts resulting from defaults. the same would impact negatively on the members who volunteered as guarantors.

representing a drop of 9. Borrowing costs remain expensive and drastic changes in Central Bank Rate (CBR). Kenya’s economic fortunes have been chiefly tied to the country’s weather patterns. but not in recent months. At the time. What Kenya needs now is cheaper credit to spur private sector lending. The monetary policy honchos lowered the rate to 9. prompting commercial banks to raise their average lending rate to 25 per cent from about 18 per cent.If your best friend decides to take a sacco loan and asks you to stand surety.5 per cent on Tuesday. retail and construction are not getting enough credit to boost to boost Kenyans’ purchasing power and prop up the private sector through increased demand for goods and services. has become the focus of policy makers. which is touted as the machine that drives Kenya’s economy. The Central Bank of Kenya has been alive to this fact and has been working at policies geared at boosting credit flow through cheaper bank loans. the benchmark lending had been increased to 18 per cent to shield the shilling against renewed pressure from foreign currencies. Commercial banks have not matched the CBK in their rate cut despite slashing deposit rates given that the low cost of savings has emerged as the main profit driver of lenders that have so far announced their quarter one results. The slackened consumer demand for goods and services has dimmed the capacity of many Kenyan firms to boost production that will offer some room for fresh hiring and stop executives mulling over cutting jobs to preserve cash and profits. The fed agriculture. key sectors of the economy like manufacturing. but lenders are now working in tandem. first consider the consequences. the cost at which the regulator lends to banks. May 8 2013 at 18:10 For a long time. Ensure you have the financial muscle to shoulder the additional liability that will come in case he or she defaults.5 percentage points. But official data on the economy’s performance has seen the rate of bank credit take a front rank in the guidance of the country’s wealth. have not had a similar effect on private sector credit growth. Therefore commercial banks are emerging as the missing link in the drive to step the recovery of the Kenyan economy at a moment when are preparing to unveil super profits. Mr Opiyo is Training Manager & Coach with Tolerance Employee Financial Advisors Limited Banks must take MPC cue and offer cheaper credit Posted Wednesday. This outlook has since last year prompted the CBK’s Monetary Policy Committee (MPC) to act and review policies that were geared at inflation and lending rates.5 per cent in December and 8. 27 . As a result.

28 . The Nairobi Securities Exchange 20 share index rose from 4. sending a signal to commercial banks to lower the cost of loans as focus shifts to spurring economic growth. The committee reduced the rate at which it lends to commercial banks to 8. the broad outlook is still for relative stability – a view with which we agree.765.6 in February 2013 to 4.5pc The Monetary Policy Committee (MPC) has reduced the indicative Central Bank Rate for the first time this year signalling a cut on cost of loans. A survey conducted by CBK to guide the policy makers showed increased optimism for a strong growth recovery in 2013 mainly on account of the prevailing macroeconomic stability marked by stable inflation rates and a strong shilling. “The CBK is resuming its easing cycle following the elections.518.5 per cent which has prevailed since January. “Beyond the knee-jerk market reaction. In making the decision the policy maker is banking on the peaceful election and transition of power for enhanced economic activity which needs to be supported by easy access to finance.5 per cent. as Kenyan asset markets benefit from increased offshore inflows. “The committee concluded that the monetary policy measures continue to deliver the desired results.2 in April 2013 points driven by increased participation by foreign investors. The CBR is the cost at which the regulator lends to commercial banks through the emergency borrowing window. Despite risks emanating from the euro area and Kenya’s still-substantial current account deficit.CBK cuts key lending rate to 8. “The Committee concluded that the monetary policy measures continue to deliver the desired results. providing policy space to encourage the private sector to fulfil its growth augmentation role. which needs to be supported by easy access to finance. Analyst however noted that the shilling.90 units from Monday’s rate of 83.71 may come under some short lived pressure from sections of the market which had anticipated a smaller cut to the CBR. In making the decision the regulator is banking on the recent peaceful outcome of the election and transition of power for enhanced economic activity.” said Razia Khan Head of research on Africa at Standard Chartered PLC. our expectation is that the Kenyan shilling will continue to rally. providing policy space to encourage the private sector to fulfil its growth augmentation role.” said Ms Khan. The reduction was in line with market expectations following a stable macro-economic environment that allowed for easing of the monetary policy.5 per cent from 9.” said the MPC The Central Bank has cut its indicative interest rate for the first time this year. which lost ground against the dollar Tuesday to close at 83.” said the MPC. The Monetary Policy Committee (MPC) said after its bi-monthly meeting on Tuesday that it had cut the Central Bank Rate (CBR) by one percentage point to 8.

This will unlock the money individuals and corporations are keeping in wait and see. In the last auction 91-day treasury bills returned an interest rate of 10.3 per cent and say they will decamp from the 5000-member revolving fund. gngigi@ke. The lenders have attributed their slow transmission of the cut to costly fixed deposits which were locked in by savvy investors during the high interest rate environment. the chief executive of Kenya Bankers Association.nationmedia.” said Dr X. Data from the CBK website shows that the average lending rate for March when the CBR was 9. OKEWO 29 . “We need a cabinet to reduce uncertainties and clear policies on the direction the government will take.3 per cent in June last year when the indicative rate was 18 per cent. “The policy rate is a signal to the market.8 per cent compared to 20. May 26 2013 at 14:21 A showdown is looming at a Kacco in Kisumu after members threatened to withdraw over claims of funds mismanagement.5 per cent was 17. Commercial banks have been under pressure to lower their lending rates in line with the CBR reduction from highs of 18 per cent mid last year. Economist also noted the increased borrowing from the domestic market at higher rates by the government could however crowd out the private sector from accessing credit from the banks which have to consider the opportunity lost in their pricing.com Teachers clash with Sacco officials over low dividends By EVERLINE Posted Sunday. which will lead to more economic activities and more tax revenues. N Iraki. a lot depends on whether the market responds and in this case the market is those who provide deposits to the banks. If their cost goes down then the banks transmit the same to the borrowers” said Mr Habil Olaka.10 per cent .CBK noted that the rates charged on commercial loan were dropping at a slow rate and the credit growth for the first quarter reached the traditional sectors of the economy which are agriculture and manufacturing. The members of Kisumu Teachers Sacco have contested a divided pay of 1. The President and his deputy were also urged to hasten the setting up of the cabinet in order to start the laying down of policies which will advise investors on where to put their money.the highest on record.

600 as dividends. claiming those threatening to withdraw from the membership are loan defaulters who are busy mobilising others to leave the sacco. a member. Afya Sacco seeks CBK licence for conversion to micro-lender Afya Sacco is raising capital from its members to hit CBK’s minimum requirement of Sh60 million for a nationwide deposit-taking micro financier. However. The teachers are accusing the board of directors of mismanagement whom they have issued a notice to vacate their positions for fresh elections. the chief executive of the sacco Joseph Oganga dismissed the claims. This year’s financial statement indicate the rate of default stands at Sh39 million. He said the board has been holding secret meetings without involving members.‘‘Imagine getting 1.300 in one year. raising so many questions. ‘‘We have observed that normal loans are not being issued out. I only got Sh2. setting on a transformational path for the co-operative society. May 30 2013 at 19:47 Afya Sacco has applied for a Central Bank (CBK) licence to operate as a deposit-taking microfinance institution. The board is also accused of favouritism.’’ said Mark Onyango. 30 . which are very expensive.3 per cent of your shares yet you have saved a total of Sh236.’’ Erick Omulo said. instead members of the sacco are subjected to Fosa loans. The Sacco is currently raising capital from its members to hit CBK’s minimum requirement of Sh60 million for a nationwide deposit-taking micro financier (DTM). FILE By GEORGE NGIGI Posted Thursday.

Many Saccos are however limited by liquidity problems. the Sacco community is picking itself up from years of misconduct which had seen it lose public confidence as some of them collapsed with hard earned savings. CBK has licensed six DTMs since 2010 when regulations creating the micro-lenders were passed.016 and as at end of 2011 it had deposits of Sh6. Stima Sacco has partnered with Family Bank while Unaitas has turned to ABC Bank. DTMs are also able to participate in the clearing house through a representative bank. It has a membership of 39. which they can use to grow their loan book. Saccos have also started partnering with banks to issue cheque books to their account holders allowing them to serve the business community. This has been accompanied by wider product range which includes long term facilities such as mortgages and development loans. June 3 2013 at 20:23 Christ is the Answer Ministries (Citam) is seeking to tap into the property market to raise revenue for supporting its social programmes.” says the Sacco on its website. There are over 110 licensed Saccos with an asset base of over Sh200 billion. Most micro financiers are credit only (those allowed to give loans only without getting deposits from the public).4 billion and a loan book of Sh6 billion. with more Saccos likely to follow path. DTMs lend to the public depending on their ability to repay. delaying some of the members’ loan applications. Saccos on the other hand are regulated by the Sacco Societies Regulatory Authority (Sasra) and are only allowed to collect funds from their members. DTMs are regulated by the CBK as they are allowed to collect deposits from the public. Church Sacco bets on property market By Neville Otuki Posted Monday. while Sacco loans are backed by customers savings and guarantors. Once trading commences the company will provide all Microfinance services. Afya Sacco is calling its members and other interested parties to buy shares of at least Sh5000 and a maximum of Sh60 million in the new institution. Saccos are popular with members because of their more friendly cost of credit. If approved it will be the first DTM to be operated by a Sacco and it will open the door for a transformation of the financial industry landscape.“Afya (Sacco) has already applied for a license to begin its trading activities. 31 . Under the regulatory environment of Sasra.

This made Co-op Bank the third most profitable bank in the country behind its home-grown peers KCB and Equity.000 students.2 billion respectively.000 members before starting projects where non-members would befit.8 billion) and Barclays (Sh1.6 billion. Citam also owns four schools in various parts of Nairobi with a population of 4. “I urge Kenyans and the Government to uphold the sanctity of title deeds or any other land ownership document for that matter. retired bishop Bonifes Adoyo urged the government to create an enabling environment for the country’s real estate sector. the church plans to spend Sh7 billion in constructing residential houses on a 72 acre parcel of land in the prime Karen area of Nairobi. The church said it seeks to empower members through business ventures in property development.6 billion). whose net profits stood at Sh3 billion and Sh3. Results for the first quarter show that Co-op Bank posted a net profit of Sh2.Through LaNyavu Sacco. Co-op overtakes BBK.” he said. the church’s savings and credit cooperative society. Church organisations are increasingly turning to property to expand their services to members beyond the spiritual through investment companies engaged in buying and selling of land. 32 . The gated housing community project is set to start in August and be completed in early 2015. beating Stanchart (Sh1. StanChart in earnings race Co-operative Bank of Kenya has overtaken Barclays and Standard Chartered banks on the profit ranking deepening the dominance of indigenous banks against the multinationals. LaNyavu said its initial focus would be on its 2. The houses in Karen will comprise 130 units of four and five-bedroom houses. building hotels and hostels as well as transport services. Speaking during the launch on Friday.

Investors have taken note of the shift in fortunes among the big banks. Mr Parmar added that Barclays and Stanchart have traditionally focused on corporate banking. followed by KCB’s stock that is trading at Sh41 after gaining 49 per cent in the period. On this front. Co-op Bank reduced its interest expenses by Sh1 billion in the three months to March. with the earnings of Barclays and Stanchart shrinking by double digits in the first quarter. which is expected to boost its earnings in the coming years.9 billion. Co-op Bank’s share price has risen 37 per cent to Sh16. especially on the retail and SME sectors. Equity has the largest customer base having seven million deposit accounts as of December. 33 .7. KCB also cut also cut its interest expenses by Sh730 million and Equity by Sh511 million.” said Vimal Parmar.8 per cent to trade at Sh300 and that of Barclays has gained 23. The homegrown banks — with the exception of Co-op Bank — have also benefitted from their expansion in the region in a move that has diversified their earnings away from the Kenyan market. and KCB. But deposit expenses were the game change in the first quarter.377 accounts in the period. an analyst at Burbidge Capital. The three local lenders were the only top tier banks to grow their profits by double digits.4 per cent over the past six months to trade at Sh36.9. The larger retail presence among the home-grown banks has helped boost their loan books. the local banks have a distinct advantage over the multinationals operating in Kenya who have limitations of broadening their reach beyond the country because their parent companies have operations in neighbouring countries like Uganda and Tanzania. followed by Co-op (2.2 million).1 per cent to trade at Sh17.The stronger performance by the indigenous banks was helped by major cutbacks in interest expenses compared to the multinationals that reduced their deposit costs marginally. Barclays dominated the local banking industry for decades but its reign ended in 2011 when its Sh8 billion net profit was overtaken by KCB’s Sh10.3 million) and KCB (1. with the stocks of the indigenous lenders recording the highest demand and bigger gains.1 million and Stanchart 171. Equity’s share price has recorded the highest gain. Stanchart’s has gained 25. rising 55. The local banks have also benefited from aggressive lending. Barclays had 1. a move that compensated for its flat loan book of Sh119 billion. interest earnings and transaction-based income from their millions of customers. which has lower margins and is growing at a slower rate compared to retail and SME banking. Co-op Bank is venturing into South Sudan in its first regional shop and has ambitions to open more foreign subsidiaries. according to stock brokers. Equity. compared to the multinational rivals who have adopted a cautious approach. “Margins in retail and SME lending are significantly higher compared to corporate banking and this is driving the performance of Co-op. Stanchart saved Sh72 million on the cost of deposits while Barclays reduced its interest expenses by Sh174 million.

” the MD said.vjuma@ke.com Coop Bank profit up by 17pc Co-operative Bank House along Nairobi’s Haile Selassie Avenue in Nairobi.9 billion from Sh112.5 million mark. 34 . while 425 Sacco Fosa outlets continued to grow with 593. Co-operative Bank has posted a 17 per cent growth in after-tax profit.in its branches.in its branches.1 billion to Sh172.7 billion in June 2012.” Mr Muruiki said in a signed statement about the bank’s financial performance.000 new Sacco-link cards issued in the period. “We now have 3.selling of insurance through the bank . we are increasing our wallet size by offering other products and services to our customers. while 425 Sacco Fosa outlets continued to grow with 593.com Posted Wednesday. The bank earned Sh4. With cross selling initiatives.7 billion in its half-year results compared to Sh4 billion in the same period last year. Loans increased by 11 per cent to Sh124. The Bank’s managing director Mr Gideon Muriuki said the bank defied low demand for loans and advances due to sustained growth in commissions and transaction-based incomes to record growth in the period under review.8 billion compared to Sh145.nationmedia. Total customer deposits increased by Sh27.6 billion in the same period last year. “The growth was achieved despite the low demand for loans and advances due to sustained growth in commissions and transaction based incomes. August 7 2013 at 19:57 In Summary  The bank’s growth was aided by the partnership with CIC-insurance to offer bancassurance . The bank’s growth was aided by the partnership with CIC-insurance to offer bancassurance selling of insurance through the bank .000 new Sacco-link cards issued in the period.nationmedia. The number of customers accounts crossed the 3. FILE By MWANIKI WAHOME jwahome@ke.5 million account holders realised through continued concerted effort by all staff to bring funded accounts in the bank.

we will continue to strengthen cooperatives to better enable them play the crucial roles of mobilising savings. To further increase investments and generate employment opportunities.44 billion in the same period last year. It will ensure the full implementation of the Sessional Paper No. The non-funded income increased by 11 per cent to Sh4. promotion of the One Village. members’ deposits in SACCOs amount to approximately Kshs.5 per cent as it opened new branches across the country. 35 . while redeploying their staff to maximise on their personnel. This is one of the best ways in which we shall be able to generate employment and create wealth. President Uhuru speech Madaraka day Exempt We are committed to sparking an industrial revolution that will ensure we are able to manufacture the necessary tools and equipment for economic activities as well as to carry out value addition of our raw materials and primary commodities. This Ministry will be the heartbeat of our industrial revolution and export diversification agenda.5 billion in the period under review compared to Sh4. The total operating costs increased by 15. The rise is attributed to due to fees and commissions. but also packaging. It is our conviction that these initiatives will play a critical role in attaining our objective of creating one million jobs per year for the nextfive years. The mobilization of savings is particularly key to the realisation of Vision 2030 in respect to increasing national savings from the current 17 percent to 30 percent of national income. development of SME parks.3 billion from Sh177. 9 of 2012 on the National Industrialisation Policy Framework for Kenya (2012-2030) which is aimed at transforming Kenya into a globally competitive regional industrial hub in line with Kenya Vision 2030. It is for this reason that I formed the Ministry of Industrialisation and Enterprise Development. One Product programme. branding and marketing of high quality products. The net interest income increased by 19 per cent to Sh8. We must strengthen and harness the potential of this sector in order to increase the pool of investible resources. The key projects that will drive this process include the development of integrated steel mills.7 billion in the same period last year.86 billion compared to Sh7. and productivity improvement for SMEs. marketing products and value addition to our products. I call upon cooperatives to emulate the success stories of co-operatives such as New KCC which through value addition now produces finished products including powdered milk.04 billion earned last year. I am encouraged that currently. we want to see more cooperatives venture not only into value addition.378 billion.The bank’s assets reached Sh225. With respect to value addition. placing it in third position in the country in terms of assets.

the Co-op Bank director of retail banking. Ruiru. Othaya and Molo. Some of the new branches opened so far include. Co-op Bank also intends to open its first branch in Juba.500. Kawangware 46. 36 .Co-op Bank targets counties with Sh500m growth plan Co-operative Bank customers queue to withdraw money at an ATM in Kisumu in December. in April before opening four more by end of the year. the county structure is going to be a strong focus for development and the bank’s expansion plan ensures a strong presence in the counties. File By GEORGE NGIGI Posted Monday. Yala. Oyugis. Embakasi Junction. the bank also intends to set up shopping malls while increasing its agents network to above 3. “Going forward. February 11 2013 at 20:18 In Summary    Co-op Bank is drawing funds from its retained earnings to take advantage of the new county government structure. Apart from branches.” said Samuel Birech. South Sudan. Malaba. Co-operative Bank has opened nine new branches in the past one month as part of a Sh500 million expansion plan to give the lender a presence in all the 47 counties. The bank also intends to open its first branch in Juba. South Sudan. The bank plans to open branches in 47 counties. in April before opening four more by end of the year. The bank is drawing funds from its retained earnings to take advantage of the new county government structure which comes into effect after the March 4 General Election.

Equity Bank and KCB. the bank also intends to set up shopping malls while increasing its agents network to above 3. By last September the lender had 3. however.3 million a year earlier. however.000 banking agents.” Nandi Teachers Sacco loses 200-acre farm Friday. they complement one another. do not compete with the saccos and agents. The lender’s geographical presence is smaller than its main competitors in the retail segment.500. Standard Bank analysts. 2013 . rise in debit cards issued to sacco members. The Central Bank introduced the agency banking model two years ago to encourage banks to operate in regions that are not financially viable to set up branches. May 3.” said Mr Birech. hold that the lender’s diversification to long-term loans using financing from international financiers was likely to grow the loan book at a faster rate. Research analysts at Standard Investment Bank.BY BARRY SALIL 37 . increased use of mobile banking platform and rollout of over 3. performance in fee per commission income was disappointing. “Our network of saccos and agencies benefits immensely when we provide them with a branch in close proximity. especially in loan applications. “Our branches.” said Standard Investment Bank in a survey on Kenya banks.00:00 -. say Co-op Bank should improve on its efficiency even as it seeks to grow its presence.Apart from branches.2 million deposit accounts up from 2. The bank said that it was setting up in areas where it felt that it needed more representation than that can be afforded by agents. therefore. “Despite increase in customer deposit accounts. Co-operative Bank also operates in partnership with saccos who hold a majority stake in the bank.

Sacco officials face prosecution over Sh70m scandal By TOM MATOKE Posted Tuesday. The plan was to either sub divide to interested members or resell it at a higher price. Pioneer Ngeria Block'.A teachers' Sacco has lost a 200-acre farm in Uasin Gishu. The members accused the management of failing to recover property stolen and misappropriated by the previous team. He said the 37 per cent stake held by the Nandi Teachers Sacco belongs to individuals and not the society. He explained that his team registered another Sacco to manage the tea company shares which stand at 47 per cent on behalf of individual teachers. what will make us happy with the management. the 3. “We nominated a consultant. The management said the land has been sold using fake documents by a land agency in Eldoret. June 18 2013 at 19:05 38 . However. They expressed fear that the land might have been secretly sold by the previous management According to the Lands ministry. At this point members stormed out of the meeting in protest. to the board of the tea firm on our behalf because we realised that the shares are quite substantial.000 member Sacco registered for the first time in eight years a Sh10 million profit which will be paid as dividends to members at 1. Nandi Teachers Sacco bought the land from the East African Tanning Extract Company. The Sacco bought the farm in 1999. a subsidiary of Lonrho Africa group in UasinGishu. “If teachers cannot get their loans on time for no apparent reason. The management told members at a meeting yesterday that they cannot trace the property. Ng'etuny is a director of the highly profitable tea company. wellconnected tycoon is claiming ownership of the farm registered as 'Nandi Teachers Sacco. the property is registered under the name of the Sacco. Sacco chairman Alfred Ng’etuny told a stormy annual delegates meeting in Kapsabet that a local.” Ng'etuny said. Tempers flared as the chairman further informed the members that the society does not have shares at the Nandi Tea Company.” they shouted. Titus Kipyab. Ng'etuny's efforts to explain the situation was ignored as members said they always receive dividends.5 per cent per share.

’’ said Nandi teachers sacco chairman Alfred Ngetuny. “The task force composed 40 officials who were supposed to investigate shady land deals conspired with prominent personalities and registered the land under the families and relatives and instead turned against teachers should not be allowed to go free since it would encourage land grabbing while poor teachers continues to suffer.Teachers are calling for the prosecution of Sacco officials implicated in the loss of more than Sh70 million and their properties attached to recover the money. Banks lose out to Saccos on lucrative youth. Mr Serem said the former Cooperative minister Joseph Nyagah had directed that properties of top officials of the Nandi Teachers Sacco be attached and that Ethics and Anti-Corruption Commission invited to investigate the scandal. Tempers flared on Tuesday at a meeting in Kapsabet stadium when Kenya National Union of Teachers (Knut) leaders and Nandi teachers sacco management disowned a task force appointed last year to investigate the 200 acres of land belonging to the teachers. adding that the era of impunity ended under new constitution. but to date nothing has taken place. women loans By GEORGE NGIGI Posted Wednesday.000 teachers in Nandi County lost their savings and an inquiry by the Co-operatives ministry implicated the officials in the scandal. “The management of the sacco went to the Lands ministry and got shocked when they discovered land documents missing and alerted KNUT leaders and they agreed to call for urgent teachers’ meeting to discuss the issue. The Sacco officials were also accused of grabbing 200 acres of land belonging to the Nandi Teachers Cooperative purchased in 2003. June 12 2013 at 18:39 39 . Boniface Tenai. national trustee. secretary for Nandi south and Sylvester Talam. The teachers said their children had dropped out of school for lack of fees as most relied on loans from the sacco to educate them. demanded that action be taken against the officials accused of stealing teachers’ properties. the KNUT for Nandi south. Teachers resolved that the anti-corruption agency be invited to carry out independent investigation into the land scandal. secretary for Nandi north.’’ one teacher said. ” said Mr Misoi. The 7. ‘‘Children who had applied to go for further studies cannot access funds because former officials crippled the teachers co-operative.000 teachers led by Knut officials. Stephen Misoi. Over 7. secretary for Nandi central branch. Mr Tenai asked some of the officials who are still in office and are implicated in the loss of teachers’ funds and land to quit to pave way for investigations. Josephat Serem. The teachers want the land surrendered.

making it necessary to give the youths an option based on their financial needs. The borrowers are also not required to have security. “Commercial banks are making money from the youth fund when the youths have no money.In Summary   Parliament’s Budget and Appropriation Committee said bureaucracy in commercial banks had slowed down lending to deserving women and youth. Borrowers are charged an interest rate of eight per cent compared to the average market rate of 18 per cent for unsecured loans. defeating the State’s target of job creation and spurring economic growth. It was however quick to point out that the banks offered a wider variety of products than other financial intermediaries. The funds are currently channelled through 39 financial intermediaries. The parliamentary committee also recommended that the youth fund be restructured in order to ensure that the youths were trained on the use of the cash and accounting for resources as well as the type of projects that they should be involved in. The money is loaned to groups at an interest below market rates.” reads the report by Parliament’s Budget and Appropriation Committee. which are in excess of Sh2 billion. unlike in normal lending where collateral or proof of regular income such as permanent employment is mandatory. defeating the State’s target of job creation and spurring economic growth. “This is a serious recommendation on the access of the funds. The bulk of the cash is passed through banks. Banks have also been accused of using the revolving women and youth enterprise funds. Family Bank and First Community Bank while small volumes are loaned through saccos. which is chaired by Mutava Musyimi.” said the majority leader in Parliament Aden Duale. “Commercial banks were noted to create stringent conditions which discouraged youth from accessing the government loans.” The funds are set to receive a boost following President Uhuru Kenyatta’s declaration that the Sh6 billion allocated for election runoff would be redirected to creation of revolving funds for the youths and women. Commercial banks could be big losers following a recommendation by Parliament locking them from distributing the multi-billion shilling government enterprise funds to women and the youth.” The fund’s management agreed that saccos were popular at the grassroots because of their close interaction with the community. 40 . Parliament’s Budget and Appropriation Committee said bureaucracy in commercial banks had slowed down lending to deserving women and youth. “It was recommended for government to consider using other intermediaries such as the saccos and not commercial banks to channel the funds. which include Equity Bank. to boost their deposits instead of giving cheap loans to deserving borrowers.

Stima Sacco chief executive officer Paul Wambua said the venture was also aimed at placing the Sacco on equal footing with other financial market players. Mr Muthendi said that the fund was exploring ways of directly relating with the youths such as transforming into a micro-finance institution. The parliamentary committee also recommended that the youth fund be restructured in order to ensure that the youths were trained on the use of the cash and accounting for resources as well as the type of projects that they should be involved in.” said Youth Fund public relation officer Benson Muthendi.nationmedia. Speaking during the launch.“A youth can easily get a guarantor to take a loan in a community-based sacco. The cheque book will be available to prime account holders before being rolled out to other members. amount they require and other services provided by the institution. with Parliament saying that commercial banks were to blame for introducing stringent and bureaucratic processes in accessing the funds."said Wambua. March 23. “(In a bank) the youth choose what is best for them depending on their geographical location.BY MOSES KHISA Stima Sacco has launched a cheque book for its members to aid their transactions across the country. 41 . gngigi@ke.” The absorption rate of the funds has been low. “We have seen growing interests from the micro finance segment as well as small and medium entrepreneurs and the cheque book in addition to other services we have been offering will make us equally attractive in the fast growing market.com Stima Sacco to issue cheque books to members Saturday. and which may not be related to the fund. 2013 . The initiative is a partnership with Family Bank and is part of the Sacco’s continued effort to boost its front office services and deepen Kenya’s financial markets. Youths and women were to use the funds to start their own businesses to break the dependency syndrome and secure financial independence. level of their business. The funds were created in order to help tackle the problem of unemployment.00:00 -.

As at end of April it had 17. In this way. Nairobi. The launch of the cheque book coincided with the Sacco’s annual general meeting at which the board of directors recommended a first and final dividend payment of 12 per cent per share on fully paid up shares. Those to be engaged include a branch manager.8 million. tracking their financial transactions as well as providing them with a secure payment method. Wambua said the new employees would be deployed in its branch in Nakuru as from next month. To enable it pursue this goal. The credit union. KENYA: Stima Savings and Credit Cooperative Society Limited (Stima Sacco) have embarked on an expansion plan. operations officer. Deposit taking business in the country has intensified with majority of financial institutions employing strategies to reach the unbanked. Stima Sacco hires 14 to boost services and grow revenue base Updated Monday. branch accountant. The other branches will be opened soon. services and branch expansion. Wambua said membership increased by 21 per cent from 12.831 in 2011 to 15. and procurement assistant. the union is seeking to recruit 14 new personnel. he said. licensed by the Sacco Societies Regulatory Authority (SASRA) to carry out deposit taking business is diversifying its membership in order to register more businesses.Stima Sacco cheque book holders will benefit from ease in paying third parties. Paul Wambua said the financial services provider is keen to grow its business by opening new branches in parts of the country. Wambua said the idea is to expand the branch network to tap on emerging business opportunities “In our strategic plan we plan to open new branches in Nakuru. Stima derives membership mainly from the power sector. Others are two customer relations assistants. Chief executive. and Kisumu thus offering job opportunities to Kenyans. which was an increase of 27 per cent compared to Sh187. he observed that business would grow by more than 300 per cent in the next three years (2016) through innovative products. administrative assistant. During the year under review.2 million in 2011. posting a surplus before tax of Sh237.511 in 2012. 42 . branch credit officer. June 3rd 2013 at 11:48 GMT +3 By Nicholas Waitathu NAIROBI. four marketing representatives and two accounts assistants. Mombasa. the Sacco recorded satisfactory performance.000 members and intention is to expand the membership further.

a commissioner with Teachers Service Commission (TSC) said the institution will promote savings among teachers. Benjamin Teigong.” he said. Uasin Gishu County Governor Jackson Mandago said his county government would support Sacco movement in all sectors of the economy.” said Shem Motuka. He added that members of the Sacco are now receiving their salaries through the bank and can also process loans and other allowances with ease.” she said. June 10th 2013 at 20:43 GMT +3 By TITUS TOO Mwalimu National Savings and Credit Cooperative Society has opened its fifth Sacco banking branch in Eldoret town. “The new performance systems will ensure that members are served within the shortest time and also enable the Sacco achieve its financial targets. becomes the latest financial institution in area to cater for an increasing number of tertiary institutions. “With the new banking branch. Rose Sereti. The branch which offers financial services to secondary and tertiary institution teachers in North Rift. secondary and tertiary institution teachers will save in their Sacco. “We want to take banking services closer to our members countrywide. The commissioner also said TSC is decentralising its services to counties and that it will support growth of Sacco movements.Mwalimu Sacco ups financial deepening with opening of Eldoret branch Updated Monday. the chairman of the Saccos supervisory committee urged members to utilise the financial services offered by the Sacco to better their living standards. educate their children as well as investing in property. It will ease access to loans and advances among other financial needs of teachers. Sacco’s national chairman. Mwalimu Sacco opens loan-book lead over rivals 43 . Motuka said the Sacco is embracing performance-contracting systems for effective service delivery. Mandago said savings societies have clearly defined terms and minimal interest rates on loans and appealed to residents to join societies and boost their living standards. Teigong said the institution is offering business loans that can financially assist members who are preparing for their retirements.

which has been growing owing to high interest rates and slowdown in business activity in the lead up to the March General Election.9 billion.664 from 49. the average savings per individual is Sh316.354. while for banks they constitute debt that has not been serviced for three months. grew its loans book by Sh2. Data from the Sacco Societies Regulatory Authority (Sasra) shows that Mwalimu Sacco’s assets (mainly comprising of loans to members) increased to Sh22 billion. non-performing loans are those that have not been serviced for more than one month. which dropped by Sh600 million to Sh11. most of whom have stable incomes. 44 . Total loans issued by the institutions grew by 27. The total number of licensed saccos rose to 130 and from 110 in 2012.6 per cent an year earlier. increased its membership to 52. Saccos are required to make provisions for the bad loans. The defaults constitute 7. which reduces their profits. The unions were also able to reduce their exposure to non-performing loans. The sacco is the largest in the country. Photo/Isaac Wale By GEORGE NGIGI Posted Wednesday. As per the sacco’s website. “Mwalimu’s growth is because of the large catchment areas that they have — all secondary school teachers. The shrinking bad debts book is different from that of the banking sector. which are more long-term. solidifying its position as the top lender boosted mainly by growth in membership. riding on the shift of borrowers away from banks. The sacco has also opened its doors to spouses of its members.040 a year earlier.2 per cent to Sh159 billion. Mwalimu Sacco. Saccos have also been diversifying their loans to accommodate the needs of their members.3 per cent of the total loan book down from 9.6 billion.” said Sasra chief executive Carilus Ademba. the largest savings and credit co-operative in the country. whose interest rates had risen to average at about 24 per cent for most of last year. offering construction and development loans. Among saccos. Other top lenders as per the Sasra data include Afya. Stima and the Kenya Police Sacco.7 billion last year.A teacher at the Mwalimu Sacco offices in Nairobi. 24 2013 at 19:34 July Mwalimu Sacco. while second-placed Harambee Sacco grew its balance sheet by Sh1 billion to Sh16. whose membership is mainly constituted of teachers.

2 per cent to Sh148 billion.” said Mr Ademba.” said Mr Wambua. He said the saccos involved in mobilisation programmes were licensed by the regulator and had to report to it every two weeks to ensure they don’t bite more than they can chew. “Saccos are anchored in numbers. attributed its aggressiveness to changes in regulatory environment and need for additional capital. The sacco has also partnered with Family Bank to allow its customers to issue cheques. the bigger the numbers the better as they mobilise more savings.com This is what you’ve lost by ignoring the Sacco AGMs 45 . “Saccos have a regulatory opportunity to expand our mobilisation of funds beyond our traditional base. gngigi@ke. Paul Wambua. The saccos been aggressive in enrolling new members with some.The total deposits held by the unions grew by 23. carrying out media campaigns. chief executive of Stima Sacco that is also expanding by opening branches outside of Nairobi. similar to Unaitas Sacco which has partnered with ABC Bank. such as Winas Sacco in Embu.nationmedia. We also need to grow and one source of capital is new membership.

unfortunately. from this year. you are a member. Perhaps you need to drop this membership. change tack. If there is a decline. be one of the most important meetings to attend. Members should take keen interest in the minutes to confirm whether the resolutions reached during the past meeting were captured accurately. you are telling yourself the event does not fit the bill. I want to tie this argument to the Mahatma Gandhi thought of being the change that “you wish to see in the world. keeping the regular contributions constant. This week. The AGM is one of the best opportunities to raise questions. go through the financial statements by comparing with the previous years to gather the trend of performance. reducing the figure or raising it based on the returns. 2. 46 . Photo/Joseph Kanyi By ISAIAH Posted Sunday. start attending these meetings and count the gains. To ascertain financial position and performance Before the date of the meeting. we are focusing on why attending the sacco AGM should. the directors prepare and circulate a copy of audited accounts for approval and adoption. Perhaps you are one of those ‘‘co-operators’’ who dismiss Sacco annual general meeting invites. Review resolutions The first agenda of any sacco AGM is often to run through the minutes of the previous meeting to remind members where the organisation is coming from and what it intends to do.” Here we go: 1. This way. Therefore. It benefits those who attended and did not in equal measure because then one can take the managers or the board to task on some steps. April 21 2013 at 15:02 In Summary  OPIYO From this year. before the AGM.Wananchi Sacco members at an AGM in Othaya town in 2012. But. demand to know the underlying factors and propose ways and means of improving performance. The financial statement gives the membership a clear picture of performance and whether it is prudent to continue being a member.

The ‘Any Other Business’ (AOB) session is where the real matters touching on your return on deposits would be discussed. one gets the chance to gather how the directors are planning for future growth. 6. are cheaper than other sources like the commercial banks. most times. is why you should attend the forthcoming AGM. At the AGM. A wide network of sacco friends increases chances of getting easy access to loans. you monitor revenue growth. To read your wish-list Members get the rare opportunity to raise issues outside the agenda of the day.00:00 -. one gets a chance to meet other members who are potential guarantors and promise you would return the favour. July 16. To network with future loan guarantors One of the key requirements in accessing a sacco loan is to have members with significant deposits or shares guarantee the proposed amount. 5. 2013 . a member can propose how related expenses should be treated to improve future returns. This depends on the performance score card. To get the outlook At the AGM. members should read the recommendations of the auditors’ opinion on the financial statements as the true representation. This may delay one’s projects. isaiah. You should attend to raise issues on the earned profits for the past year. 4. Appraising directors The directors as the managers of the organisation must be appraised and members decide how to compensate them and decide their fate on the board. probably. which. 3. the directors will propose either a dividend pay-out or retaining earnings. Since dividends are paid on net profits. Like employees. This requirement is a challenge to many sacco members who want to borrow but have no one to guarantee.BY JOHN NALIANYA 47 . It is the time to propose ways of enhancing sacco performance. the directors need to be remunerated as an incentive or reward for managing the sacco on your behalf.Lastly. Mr Opiyo is a training manager and coach. This. Importantly.com Bungoma Sacco rebrands Tuesday.opiyo@toleranceadvisors. Based on performance.

795. He said the core activities of Ng’arisha Sacco will be to give out loans and encourage their members to save. at Asili Sacco in Nairobi county.” said Wasike. “The re-branding of the society will obviously give it a national face to enable it venture into micro credit market segment which the Sacco is striving to start. jointly with others not before court. The prosecution led by chief inspector Daniel Musangi told the court that detective needs more time to wind up investigation into the alleged theft by servant offence. The charge against the accused person states that June 29. Milicent Kananu Kaaria denied the charge before senior principal magistrate Lucy Mbugua who ordered her to be remanded until Thursday to enable police complete investigation before granting her bond pending the hearing of the case. He said the Sacco which re-brands today to 'Ngarisha Sacco Society Ltd' to widen its membership base currently has a financial base of Sh800 million in form of deposits and share capital and a membership of 4.00:00 -. He was accompanied by the Sacco chairman Gabriel Wasike and said they will offer loans at an interest rate of 7 per cent claiming it’s the lowest compared to other banks operating in the area. Asili Sacco assistant accountant charged with Sh22m theft Tuesday. We want to improve everyone’s living standards. 2013 . Barasa appealed to local residents to start saving with the Sacco saying that the more they save the more they will be entitled to bigger loans. 2012. Speaking from his office. Bungoma Teachers Sacco loaned out Sh640 million last year from Sh530 in 2011. according to the chairman Gabriel Wasike.046.BY ALPHONCE MUNGAHU An assistant accountant at Asili Sacco was yesterday charged in a Nairobi court with stealing over Sh22 million from the society.176 which came into her possession by virtue of her employmen 48 . The society owns the prestigious Sacco plaza in Bungoma town. being servant to the Sacco as accountant assistant stole Sh22.’’ Barasa said. The prosecution request was granted by the court. “We don’t want to be seen as a Sacco that looks out for interes ts of the teachers only. The Sacco has introduced a new concept known as spot cash that allows members to withdraw or bank their cash using their phones. Barasa said the Sacco has already loaned Sh200 million to its members. June 4. The cooperative’s CEO Chrispinus Barasa said the Sacco will compete with other micro-finance institutions in the region.Bungoma Teachers Savings and Credit Cooperative Society has changed its name to Ng’arisha Savings and Credit Society withan aim of recruiting more teachers and non-teachersas well.

The three were dismissed from employment after Sh1. 383. The court ordered that each of the claimants be issued with a certificate of service and their former employer pays for the cost they incurred on the case. The first claimant Lichina. 400. Kisumu Industrial Court Judge Helen Wasilwa ordered that each claimant be paid a year’s salary as compensation of the unlawful termination. 2011. 600. citing unlawful termination of employment in January 5.1 million disappeared from Kakamega Teachers Savings and Credit Cooperative Society Ltd. The fraud is suspected to have been committed between February and April 2008.545. 540 while Masiva who used to earn Sh24. Masiva who served for 23 years will get Sh285.790 will be given Sh297.4m for unlawful sack Updated Friday. 405. 49 . 045 will get Sh252. Mr Malova is to receive Sh278. the first claimant who worked for 18 years will receive Sh189. 480. June 7th 2013 at 00:17 GMT +3 By MAUREEN ODIWUOR A Teachers’ Savings and Credit Society in Kakamega is to pay Sh1. whose monthly salary was Sh21. The Kenya Union of Commercial Food and Allied Workers filed the suit on behalf of Adelaide Lichira. The Judge also ordered that each of the claimants be given a pay equivalent to half a months salary for each year they worked. In total the three will receive Sh1. In her judgment. Ann Masiva and Sammy Malova. 085 while the third respondent who only worked for one year will get Sh11.4 million for terminating three employees illegally.Kakamega Teachers Sacco to pay Sh1.

The Mwalimu National Savings and Credit Society announced that it is working on an elaborate housing scheme for all its 53.8 million to Sh4.5 billion complex to host its headquarters.000 members.” he said. adding the project will be rolled out to other counties immediately the Nairobi project is complete. In addition to this. Ojall however said teachers will have an opportunity to chose the design of their house. This means that the current teachers Sacco offices situated along Tom Mboya street will be relocated to the new 15-storey building to be completed in two years. He said all member teachers will soon be able to choose one to three bedroom houses in the first phase of the project to be piloted in Nairobi. Kenya: Teachers are set to benefit from a multi-billion housing project that will see each of them own a house of up to Sh4. Nationwide strike Teachers through their unions are still pushing for a 50 per cent of their basic pay as housing allowance from the Government. This is one of the issues in the 1997 Legal Notice that Kenya National Union of Teachers (Knut) has registered as a concern in the coming nationwide strike. the Sacco has acquired a piece of land in Nairobi’s Upper Hill area to construct a Sh1.” he said. Joshua Ojall.Mwalimu National Teachers’ Sacco rolls out housing project Updated Monday. But the houses to be constructed in an eighth of an acre plots will range from Sh2. June 17th 2013 at 21:36 GMT +3 By Augustine Oduor Nairobi.5 million.5 million. Ojall said Juja and Kitengela areas in Nairobi have been identified for the pilot project. said these are some of the major projects lined up to make teachers comfortable. 50 . The Chief Executive Officer of the Sacco. “The nearer the house is to the city the more costly it will be because land is more expensive as you move closer to Nairobi. “They will tell us their taste so that the homes are customised as per their wish.

while I was watching the IAAF Diamond athletics competition. Similarly. any income earner would not want to work forever and savings is therefore critical to retirement planning. we are confronted with two major fears that largely influence the nature and choice of our personal financial plans.by not having a retirement plan in place to cater for their livelihood during the sunset years. Many a times in our daily endeavours. this is what happens to many income earners who spend many years doing personal financial planning in order to enjoy their desired lifestyle – only to get exhausted at the finishing line . This revolves around the fear of premature or untimely death and the fear of prolonged life.Benefits of using Sacco savings scheme to plan retirement Last month. It appeared ridiculous that an athlete who had put many years and a lot of effort into preparation for this marathon competition would drop off the race. The former is associated with the financial loss and the inability that comes when death occurs prematurely before one accomplishes his financial ambitions. I noticed some unfortunate event occurred on the track. Just like any marathon athlete would not wish to start on a high pace only to lose energy on the last lap to the finish line. In one of the marathon competition. a leading athlete in got exhausted and dropped off the race on the last lap to the finish line. 51 .

000. With all these challenges. Jack will have to make a saving contribution of Sh214. today they are doubling up as alternative schemes for retirement plans. many income earners are looking for retirement plans that would not only provide them with a regular source of income to afford a decent lifestyle at their sunset years but one with a cash value that they can use to as collateral for any lending or for their mortgage in their lifetime.857. Jack can opt to borrow from the sacco against his deposit to achieve his other financial plans such as building his residential home without interfering with his ongoing savings plans for retirement. to accumulate a deposit of Sh6 million over 28 years. This annual payment may increase if Jack opts to reinvest his dividends payment he receives every year into the sacco. It is also important to note that at a conservative dividend of 10 per cent per annum. if Jack opts to cash on his yearly dividend income without reinvesting the same. Assuming that his sacco would give a conservative dividend of 10 per cent per annum for the next 28 years.000 per annum which translates to a monthly retirement income of Sh50.000 each year. a figure which will translate to a monthly saving of Sh17. By planning for his retirement through the sacco saving scheme.50. Many of these convectional retirement plans are tailored only to cater for the benefit of providing the retiree with a regular source of income and sometimes limited to be used as collateral only for mortgage plans. Unlike initially when sacco schemes were only used as avenue to access affordable loan facilities.572 on the twentieth year. he would be required to have accumulated Sh6 million by 2040.427 at the end of first year. Lack of such plans makes life at old age unbearable and many retirees at this stage loose the focus in any financial ambitions and mostly rue the essence of long life spans.286 per annum.286 on the tenth year and Sh428. weary and old to fend for his financial needs. a 32-year-old employee who wants to retire from active employment by 2040 with a regular monthly retirement income of Ksh. This is if he decides to withdraw his dividend payments every year.The fear of prolonged life on the other hand is usually mute and only emerges at a later time in life when one is retired. This double benefit is what lacks in many convectional retirement plans. Sh214. many income earners are now shifting from convectional retirement plans to saving for their retirement through sacco savings schemes. With an accumulated deposit of Sh6 million and at a conservative dividend of 10 per cent. This is what creates the need for retirement plans such as pension schemes and annuities as a means of financial livelihood for the retired. Assuming that Jack opts to plan for his retirement through his sacco scheme. Jack will earn a dividend of Sh21. 52 . he will be required to make monthly contribution to the sacco. Opiyo is a Training & Coach with Tolerance Employee Financial Advisors Limited. Jack will earn Sh600. Conversely. Let’s take the case of Jack. This limitation affects many potential income earners who would wish to use their retirement plans to secure lending for their other personal financial plans. With the heightened economic conditions.

Saccos weighing up youth schemes
Updated Sunday, July 14th 2013 at 23:19 GMT +3 By James Anyanzwa Nairobi,Kenya:Savings and Credit Co-operative Societies ( Saccos) are re-thinking their business models in a bid to survive growing competition for deposits from commercial banks. The Saccos latest change in strategy involves an escalation of its target market by bringing under its armpit a more vibrant, dynamic and ambitious youthful population, which constitutes more than 50 per cent of the population. Saccos reckon that part of the goodies lined up for youth include an interest rate of up to eight per cent on loans compared to the standard 12 per cent. The Kenya Union of Savings and Credit Co-operatives (KUSCCO) has also underscored the need to plug the generational and succession leadership in co-operatives in order to attract the youth through the use of technology, sports and employment creation. “We are encouraging our members to issue SME loans to our youth on easier terms if possible up to a maximum of eight per cent to enable them participate in businesses,” said KUSCCO Managing director, George Ototo. The move is part of the Saccos growth and expansion strategy aimed at consolidating their deposit base and bolstering their revenue reserves through diversification and extension of their niche markets. Saccos contend that they are facing financial constraints due to their model of lending Sh3 to every Sh1 saved to their members, a situation that has prompted them to consider new way of raising additional revenue including issuing an infrastructure bond. excise tax The matter has further been worsened by the National Treasury ‘s introduction of a 10 per cent excise tax on money transfers by Saccos, microfinance institutions (MFIs) and Kenya Post Office Savings Bank. The societies whose combined asset base stood at Sh293 billion last year are facing serious competition from banks, a scenario partly blamed on their exclusion from the national payments system and clearing house. Banks such as Kenya Commercial Bank and Equity have also come up with products targeting the youth.

53

Saccos eye bonds market to raise capital amid lean times
Updated Friday, July 12th 2013 at 22:55 GMT +3 By James Anyanzwa Savings and Credit Cooperative Societies ( Saccos) are considering new avenues of raising cash to shore up their cash-flow positions, which they say are currently under pressure. The Kenya Union of Savings and Credit Cooperatives (KUSCCO) said its members should consider tapping into the debt market by issuing infrastructure bonds to remain afloat. The body said its members are currently facing liquidity constraints due to their model of providing Sh3 to every Sh1 saved to members inform of loans. KUSCCO Managing Director George Ototo said Saccos should also consider introducing new products and participate in real estate investments through the Real Estate Investments Trusts (REITs). “The issue of liquidity has been a challenge to us and hence Saccos need to consider floating infrastructure bonds,” said Ototo. Saturated market Mr Ototo was speaking during a Finance Services Conference and Exhibition in Nairobi on Thursday. Going by recent subscription trends to both Treasury and Corporate bonds offers in Kenya, it is evident that Kenya has a huge potential. In 2009 for instance, the Government was able to raise a significant amount of funds to finance infrastructure development through the first 12-year Sh18.5 billion infrastructure bond which was oversubscribed by 45 per cent attracting a total of Sh.27 billion against a target of Sh18.5 billion. Similarly, the CFC Stanbic bond, the KenGen Infrastructure bond, the Safaricom bond and the government of Kenya’s second infrastructure bond were equally over-subscribed. Mr Ototo said Saccos are already operating in a saturated market due to competition from commercial banks. Accountability He said Saccos should rebrand and open branches in areas where they do not exist. 54

“ Saccos have remained a little bit traditional compared to banks,” said Ototo, adding that 35 Saccos have so far rebranded in order to have a national appeal, increase membership and recruit more members countrywide. The Government through the ministry of Cooperative last year reckoned that governance has been a challenge to the co-operative sector for a long time. It is argued that though a few boards have institutionalised the tenets of governance in their management systems, they have not committed themselves to the principles of accountability and transparency. The success of any Sacco is benchmarked on good leadership, which requires societies to embrace prudential standards to guide their operations. Sacco leaders are expected to be innovative to produce financial products that are demand driven and attractive to their members. However with the new Sacco law, the Sacco Societies Regulatory Authority (SASRA) has moved to increase supervision and surveillance of Saccos.

Machakos Sacco cautions against rogue land sellers
Wednesday, July 24, 2013 - 00:00 -- BY WAMBUA KAVILA Katelembo,Muputi and Athiani co-oerative society in Machakos has warned land buyers to be wary of con men purporting to sell land on behalf of the society. Society secretary Daniel Kasinga said tricksters were taking advantage since the society undertook an exercise to allocate members 2,000 half acre plots in Kyumbi at the Machakos turn-off area. He said it is unfortunate that some members had lost their parcels after conmen sold them to unsuspecting buyers. "Those who want to purchase land from the society must get transfers from our office," Kasinga said. Katelembo, Muputi and Athiani Co-operative Society in Machakos will issue 2,000 title deeds to its members in the coming month. This was disclosed yesterday by society secretary Daniel Kasinga who said the titles are for half acre plots that it recently allocated to the members. He said majority had paid for the titles and processing of the document is at an advanced stage with the lands ministry. "With the titles, the members will now be empowered economically as they can secure bank loans to develop their land and engage in economic activities," Kasinga said. He said it is unfortunate that some members had lost their parcels after fraudsters sold them unsuspecting buyers. "Those who want to buy land from the society's parcel have to get transfers from our office and nowhere else," Kasinga said. He said only 72 interested buyers had approached the society for transfers in recent months to sell off their parcels. Others have claimed that they bought the land from us after they were tricked. Meanwhile, Kasinga lashed out at a Machakos tycoon who had illegally acquired society land and sold it off and was now inciting members against the management to cover his evil deeds.

55

The 10 per cent duty introduced by the Finance Act 2012 to help the government close part of a Sh40billion budget deficit. But its implementation among financial institutions was delayed after the Kenya Bankers Association got a court injunction against KRA arguing that excise duty should be levied on goods and not services. Saccos and postal money services will have to remit 10 per cent of excise duty on all transaction fees introduced this year. Insurance. Katelembo society owns the most lucrative land in Machakos town which stretches from the town to Mombasa road at the Makutano area better known as Kyumbi. Half an acre which used to cost Sh100. "Other fees is defined to include any fee. 2013 . as scores of potential land buyers and speculators have invaded the area.now fetches between Sh800. Insurance act. The service providers are expected to remit the collected taxes by the 20th day of the succeeding month KRA also clarified that the interest charged on consumers will not attract the excise duty. Sacco Societies act and Kenya Post Office Bank.BY WINFRED KAGWE Insurance companies. Treasury expected to raise upto Sh4. The duty came into effect on January 9 this year. However the court eventually ruled against the bankers. This follows a clarification made by the Kenya Revenue Authorirty on the Finance Bill 2013. charge or commission charged the by financial institution but excludes interest. The excise duty shall be charged at 10 per cent of the excisable value and shall become due when the service is purchased by the customer.Kasinga said the management is streamlining operations of the society which has been affected over the years by bad management and haphazard disposal of society's assets. Central Bank Act. KRA said in a public notice that the term 'financial institutions' has now been defined to include persons licensed under the Banking act. July 22.000 two years ago. 56 . Sacco fees to attract 10% tax Monday.5 billion annually form this.000 to a million." said the commissioner of domestic taxes in a public notice. alongside banks and mobile money transfers.00:00 -.

He said they will target non-permanent workers and other staff to join the Sacco. The excise duty for June was expected to be paid by July 20. 2013 .000 in the financial year.3 million.2 million loan acquired in the last financial year is yet to be repaid. It is the biggest Sacco in Awendo District with membership contribution of Sh5. also added the tax to its transaction fees. 57 . Sonygar chairman Andrew Omugah. “Sonygar is set to be selling off a 8 hectares plot of land in Kisumu which has already been subdivided into 64 plots and will fetch about Sh8 million. Essar Telecom. immediately passed on tax to its M-pesa consumers in February. during the 34th Annual General Meeting at the weekend said the move will follow expansion. Safaricom which operates the biggest mobile money transfer service.BY MANUEL ODENY SONY Sugar Sacco which recruits Sony Sugar Company permanent employees will open front office services by the end the year.” Omugah told shareholders when reading audited reports.00:00 -. Sony Sacco to open front office services this year Tuesday. The Sacco’s 15 per cent of Sh21. On the other hand. “We have boosted members confidence after an audit showed more than Sh5 million was misappropriated by the previous officials which will be recovered.” Omugah said. Omugah said they will increase member monthly contribution from Sh813 by to Sh2. which operates yuCash.Commercial banks have now asked KRA to give them more time to change their systems and be able to capture the new tax in their charges. The hurdles in collecting the excise duty (combined with non-passage of the VAT Bill 2012) saw KRA adjust its revenue target for 2012/2013 downward by Sh99 billion according to KRA Commisioner General John Njiraini. July 23.

00:00 -. Wairia said the Sacco will be formed according to the law and he will monitor its daily operations.” Wairia said. The Sacco was launched at the Maragua Catholic Church hall. July 18. Wairia said the motorcycle operators earn an average of Sh500 per day which translates into Sh2.5 million daily. Wairia said funds from his government will be saved through savings and cooperative societies whose members are the 5.By JESSE MWANGI Murang’a governor Mwangi Wairia yesterday launched a boda boda Sacco for motorcycle operators. “There is a lot of money in the sector but it all ends ups with liquour brewers as majority of our youth are drunkards. 2013 .Murang'a boda boda men launch Sacco Thursday. The governor asked the operators to avoid spending earnings on alcohol and instead save the money for future use.000 operators.” he said. Wairia also pledged Sh5 million for the union which he said will empower the youth who are the majority in the sector. KUSCCO named best Sacco with highest growth rate 58 . “We also want them to own their own motorbikes for those who are employed in the industry. He said there is a huge amount of cash circulating in the county especially in the transport sector and called for its optimum utilisation.

The US Credit Union National Association added 2. Knut Bomet branch chairman Francis Tonui said the government condemned teachers to death by witholding their pay. Teachers in Bomet have blamed the government for the demise of their colleagues saying the decision to deny teachers’ salaries during the strike exposed them to "social suffering". Kenya and the US achieved remarkable growth in membership. increasing from 4. KUSCCO Ltd reached 25 per cent membership growth among 5. 59 . the umbrella body for Saccos." Tonui said. July 25th 2013 at 22:33 GMT +3 KUSCCO Ltd. The award recognises that Saccos in Kenya have the highest growth rate globally. Canada. It was given in the just concluded 2013 WOCCU conference. The Kobor Primary School teacher collapsed and died at Kapkatet Imarisha teachers Sacco after he was told he could not get an advance payment.Updated Thursday." said an official at the sacco. as regulation in one country might not fit in another.1 million members. while Brazil’s Credit Unions reported an increase in assets last year.7 million. George Ototo.00:00 -. held in Ottawa.000 Credit Unions." Langat said. July 25. Knut Bomet executive secretary Malel Langat said the Salaries and Remuneration Commission chair Sarah Serem should not have told TSC not to pay teachers' their July Salary.2 million members to 4. Managing Director. "The government should know that it has condemned one of our own to death . 2013 . Teacher dies at Sacco office Thursday. "In the back-to-work formula we signed no teacher will be victimised but the SRC wants to deny them their salary. KUSCCO Ltd said countries introducing Sacco regulations should avoid the cut and paste tendency and the ‘one coat fits all syndrome’. "The teacher looked healthy and when he was told it was not possible for him to get the money he look depressed and collapsed. has been awarded the 2013 Winner of World Council of Credit Unions (WOCCU) outstanding membership growth award.BY GILBERT KIMUTAI A primary school teacher in Konoin district collapsed and died on Monday at a Sacco where he had gone to request for a salary advance following the delay in payment by the government due to the teachers' strike. Several minutes before he was rushed to hospital he died.

Since majority of retirees would be tempted to withdraw their deposits from the sacco to cater for such expenses. Saccos can create a unique membership category to cater for such. yet retirees control substantial amount of deposits and assets in saccos. Nominate retirees as mentors or ambassadors of the Sacco 60 .How Sacco Societies can retain senior citizens as lifetime members During the recent Ushirika Day celebrations hosted in Nairobi. she said. who had joined her Sacco members to celebrate the International Co-operative Day. This is because they have low borrowing appetite and sometimes they may be devoid of a regular source of income to commit to regular savings contribution. The sacco can provide a dividend management plan that would involve making some cash deduction from the dividend income earned to cater for the required monthly savings contributions while the balance is distributed into a monthly income. Below are ways saccos can nurture lifetime membership among retirees: Create a unique membership category for retirees Retirees have unique needs that may not be fully met by the conventional sacco products and services. a 75year-old retiree. I encountered Gaudencia. especially those who have no regular income and have to meet their monthly saving contribution set by the sacco. This. This category of “senior citizen” would have unique features such as low minimum monthly saving contribution or no monthly savings contribution but with a compromised dividend payment rate. Since she retired from public service almost a decade ago. Retaining retirees as lifetime members is a challenge for many saccos. But she intimated that some of her peers rushed to terminate their sacco membership on retirement to access their deposits. Develop unique savings product A significant income earned by retirees goes towards medical expenses for recurrent illnesses associated with old age. Gaudencia has continued to retain her membership in the Sacco despite loss of her monthly payslip. She revealed that her borrowing appetite had declined as she has no regular source of income to commit for loan repayment. is one of the numerous reasons why many retirees opt to walk out of their saccos. Provide dividend management plan and advisory Paying dividend income earned from the sacco in lumpsum may disorganise retirees financially. developing a saving product that has a medical cover component to augment medical expenses would go a long way. Any mass withdrawal would lead to erosion of deposits and share capital base.

com Posted Monday. the beneficiaries will inherit the retiree’s deposits but with a caveat of not withdrawing the deposits of the deceased but enjoying the monthly incomes. Mr Opiyo is a training manager and coach with Tolerance Employee Financial Advisors Ltd.nationmedia. By VINCENT AGOYA vagoya@ke. MP Gideon Mwiti Irea denies role in Sh780m pyramid scheme Imenti Central MP Gideon Mwiti Irea. you can establish an estate planning scheme where they would be encouraged to nominate any of their preferred beneficiaries or next of kin to join the sacco as a member whilst they are still alive. In the case the prosecution says Mr Mwiti cheated and induced 12 complainants to deposit their money under the guise that they would earn a monthly interest rate of 16 per cent. The beneficiaries would enjoy the borrowing platform on their behalf and should they pass on.Retirees can be given opportunity or roles as mentors to shares with younger members why they need to enhance their savings contribution and retain their membership in the sacco for their whole lifetime. Establish an estate planning scheme Since the retirees could also be worried about future security and use of their deposits should they pass on abruptly. July 29 2013 at 18:40 61 .

The court was told that the offences were committed between January 12 and July 26. the prosecution says that Mr Mwiti cheated and induced 12 complainants to deposit their money under the guise that they would earn a monthly interest at the rate of 16 per cent. “It is a registered entity and its officials are known. Imenti Central MP Gideon Mwiti Irea told a trial court in Milimani. He said the people named in the case were “total strangers” to him while he only came to meet others in court after his arrest in 2007. I was not party to the day to day running of the business and I did not sign any of the investment contracts. The MP was defending himself before a magistrate’s court in a case of “cheating” where 12 complainants claim he swindled them of millions of shillings while acting as the Sacco general manager. I was only consulted on regulatory by-laws being a lobbyist for a law seeking to regulate micro-finance institutions and this climaxed with the enactment of the Micro-Finance Act 2006. “My role was purely consultancy… I was a businessman in Nairobi in 2004 running a company called Kenya Akiba Micro Finance Limited. that he was not behind the Kenya Business Community Sacco which the government shut down for engagement in illegal banking business. July 31st 2013 at 23:42 GMT +3 62 .” Mwiti said. but he denied ever making contact with the complaints.” the MP said. and dismissed the case as “malicious.A Member of Parliament who investigators have linked to a pyramid scheme which collapsed with over Sh780 million in members contributions on Monday disowned the company he allegedly used to receive the money. In the case. The prosecution said the MP was “feigning ignorance” about the operations of the Kenya Business Community Sacco but he objected saying the only contact he had with it was when he was consulted during its formative days.” A government task force formed to investigate the scam in 2007 linked the MP to Kenya Business Community Sacco . 2007. Prosecutor Robert Kyaa suggested to Mwiti that he knew the people accusing him well as they invested in the scheme and entered into contract with “the organisation” officials.. Kenya Multi-Purpose and Kenya Akiba Micro Finance which was recently awarded Sh2 billion for wrongful closure after the MP went to court seeking damages. Nairobi.” he said. He denied participating in the registration of the Sacco.. “I did not see them. whose members took him to court. Judge declines to reverse orders on ex-Sacco staff Updated Wednesday.

The three claimed they had been retired prematurely and filed their statement on July 26 2011. saying they were on leave and were paid salary up to September 2011 hence their year started in October.” she said. In the review. the three said they wanted to be reinstated because they had not been out of employment for three years. George Nyatama. Joel Makaburi and Huruni Birundu had returned to the Industrial Court to have Justice Helen Wasilwa’s judgement touching on their term at Gusii Mwalimu Savings and Corporative Society reversed. They gave evidence before court claiming that they were retired before reaching 55 years of age which was then mandatory age of Public Service. She upheld her decision in which she found the claim that they were retired prematurely. unlawful. Justice Wasilwa had ordered against the Sacco reinstating employment of the claimants after three years of retirement. Tuesday. have been thwarted. the judge declined to review her orders on grounds the three had retired and paid all their dues. Order on teachers’ pay saves lenders from defaults 63 . The judge maintained that they each be paid a year’s salary as per the last pay compensation for unlawful retirement.By Maureen Odiwuor Kisumu. adding it was imprudent according to section 12(3) part six of the Employment Act 2007. “An order of reinstatement of any employee after three years of dismissal is considered subject to three years cupping and so it will not be prudent to order reinstatement. Kenya: Efforts by a teachers’ savings society former employees to have a court order sacking them reversed. The Sacco however opposed the judicial review stating the application does not meet threshold for review.

“Our cashflow will be greatly affected and this will have an adverse effect on our operations. The Teachers Service Commission (TSC) released the tutors’ pay on Saturday. August 5 2013 at 20:37 In Summary   President Uhuru Kenyatta on Monday met Kenya National Union of Teachers officials and promised them tutors would be paid their salaries in full. Metropolitan Teachers Sacco confirmed that it had only recovered 60 per cent of total monthly loan repayments after processing July salaries for its members on Monday. in which a section of primary school teachers were only paid for the 10 days they worked in July.” Benson Ng’ang’a. “We will make internal arrangements to reschedule the loans. Banks and saccos are counting on Monday’s presidential directive for teachers to be paid their full salaries to save them from massive loan defaults. in whic h a section of primary school teachers were only paid for the 10 days they worked in July. but the delayed interest income will have revenue implications for us.President Uhuru Kenyatta meets Kenya National Union of Teachers officials when they called on him at State House in Nairobi on Monday. If the balance of the cash is not paid immediately and has to wait for the next payslip. This saw the lowest paid public primary school teacher get about Sh6.500 which would have been deducted to settle loans and advances. saccos are staring at short-term liquidity problems and depressed interest income from the check-off loan schemes. Photo/PSCU By DAVID HERBLING Posted Monday. finance manager at Metropolitan Sacco told the Business Daily.” 64 . The TSC had released the tutors’ pay on Saturday.

Metropolitan Sacco’s loan book stood at Sh3. The Teachers Service Commission ignored the one-third rule in making the payments.664 and a loan book of Sh18.The magnitude of the salary deductions is highlighted by the fact that primary school teachers make up roughly two thirds of Kenya’s public teachers workforce totalling 278. data from the Sacco Societies Regulatory Authority shows. medical schemes and private pension plans. “We have not compiled data on teachers’ loans. Mr Ng’ang’a said that the Sacco was only able to recover Sh60. Family Bank offers unsecured loans of up to Sh3 million repayable in 72 months to civil servants through the check-off system.8 billion as at June lent out to its 40. allowing financial institutions to raid teachers’ payslips. This means that the teachers are entitled to receive at least a third of their salary regardless of whether they had taken up loans. 65 . The teachers’ pay was dispatched as President Uhuru Kenyatta met Kenya National Union of Teachers officials and promised them tutors would be paid their salaries in full.9 billion is set to be hardest hit. For example.6 million out of the expected Sh100 million. The Kenya Bankers Association said that lenders are yet to evaluate the possible effects of the salary deductions on loans and advances. Public servants such as teachers have been a prized target for banks and saccos — wooing them with cheaper loans. “Giving out more loans will be a challenge as our cash flow will be affected.” said chief executive Habil Olaka. The giant Mwalimu Sacco with a membership base of 52.” he said before the president ordered the release of the cash. Furthermore. “The loans will be rescheduled and we’ll recover them over a longer period. salary advances and top-ups — due to the security of tenure they enjoy. leaving some with a take-home of as low as Sh60. teachers’ saccos had advanced loans worth more than Sh100 billion as at the end of last year.” said Mwalimu Sacco chief executive Joshua Ojall.000 tutors. This is a matter that is a decision of individual banks. Special packages Most banks have developed special packages for teachers in the form of unsecured loans. advances. The Employment Act provides that total deductions from a worker’s salary and wages must not exceed two-thirds of one’s total pay.000-strong membership made up mostly of public school teachers. Secondary school teachers and those in public colleges were spared of the deductions because the Kenya Union of Post Primary Education Teachers (Kuppet) called off its strike and engaged TSC in negotiations.

00:00 -.nationmedia. hdavid@ke. Kililfi Teachers Sacco Rebrands Monday. 2013 . Metropolitan said the defaults would have forced saccos to make higher provisions for loan losses this year.com MP accused of promoting ponzi scheme By VINCENT AGOYA Posted Tuesday. South Imenti MP Gideon Mwiti will know on October 4 whether he will be jailed for three years in a case where he is accused of promoting a pyramid scheme. eating into their surplus earnings. August 12. “Our members who suffered the effects of the high commercial bank interest rates in 2011 returned to the sacco to sell off the bank loans.BY ELIAS YAA 66 . He is accused of obtaining Sh13 million from the investors in the guise that their contributions would grow at a 16 per cent monthly interest rate. Mr Mwiti has another criminal case on the matter set for hearing on September 26. contends he was not a beneficiary of the lost funds and blamed the complainants for not getting the money from the government. The unprecedented move by the TSC to deduct teachers’ pay raises serious questions on the security of giving loans to civil servants.Saccos allow members to borrow as much as three times their deposits and offer interest rates as low as one per cent per month. however. He said he was an external consultant to the Kenya Business Community Sacco during its formative stages and that he was not a shareholder or manager.” said Mr Ojall. The offence is defined as a misdemeanour in section 315 of the Penal Code. which shut down the business. August 13 2013 at 18:53 In Summary  Mr Mwiti is charged with inducing by deceit and trickery 12 investors to put money in the Kenya Business Community Sacco that went down with Sh780 million in 2008 following a government purge on illegal banking institutions. Mr Mwiti is charged with inducing by deceit and trickery 12 investors to put money in the Kenya Business Community Sacco that went down with Sh780 million in 2008 following a government purge on illegal banking institutions. Mr Mwiti.

The Sacco changed its name to Imarika Sacco and is expected to open branches outside Kilifi County.KILIFI teachers Sacco has rebranded in its bid to go national and international. “This Sacco has grown with its members and the community of Kilifi county. where it has been operating. and the Coast region. Speaking during the rebranding luncheon in a Kilifi hotel on Friday. The Sacco is the biggest in the Coast region. the Sacco CEO Daniel Masha said the rebranding will enable the Sacco to reposition itself as a financial institution that can be accepted nationally." he said. 67 .

Sign up to vote on this title
UsefulNot useful