Group three

Presentation for the course of

SACCOs administration-Module I

List of members name

1.Alemayoh Tsehaye
2.Betelehiem Birhanu
3.Epherem Weldegebriel
4.Goitom Araya
5.Hagos Abrha
6.Mengistu Birhanu
7.Yemane Amare
Submitted to Dr. Kifle Tesfamariam

October 21/2021
Fana Sacco Mekelle, Tigray
1
The question we have been given be;
1. What is the business model (i.e.,
organizational structure, governance, staffing,
outreach, level of network integration and
nature of products and services) of Fana
SACCO?

2
The presentation has two parts

The firest presentation is about

1. What seems the business model of
fana Sacco interns of organizational
structure, governance,

The second presentation is about

2. What seems the business model fana
Sacco interns staffing,
outreach, level of network integration
and nature of products and services.
3
Cont…

Part one

1. What seems the business model of fana

Sacco interms of organizational structure
and governance?

4
Business model of fana Sacco interms of organizational structure and
governance

5
 1. General overview of Fana Structure and Governance

 Fana Governance is the process where by a group of individuals works as a collective to

assure the legal and moral health of the SACCO.
 Fana has become to approach standardization based on the following system of
governance:-
 Defined work and administration process
 There is a readable Name, Brand and Logo
 Internal regulation (bylaws and its implementing directives such as saving , loan , finance,
communication, members management, HRD, employees benefit, discipline and compliance
management, IT, internal audit and control, procurement, property management, legal
service, commissioning, dividend, risk management, cash management, etc.
 These are different agreement, procedures, Conventions or policies that define who gets power,
how decisions are taken and how accountability is rendered.
 con---

 Fanas Governance issue is carried out based on the coop principles, values , ethics and fana youth strategic
issues (vision, mission, objectives, slogan, team spirit, corporate colors, brand and logo of the SACCO )
 The governance structure is well defined, transparent and decision making process detailed in the internal
regulation of the sacco
 The organs of FANA SACCO (GA> COR> democratically selected management committee members(BOD),
control committee, other support committee
 The organs are caring out the governance process to assure that the SACCO fulfills its legal and moral
obligations to its constituency (electorate, voters, members, employees, etc.)
 Fana organizational structure ( comprised of members ( individuals and elected members) and staffs)
 Members and elected leaders ( GA (above 21000, COR(240), BOD(5), CC(3) and other support committees
(9)
 The SACCO has carried out Different meetings and election process democratically
 The governance system is built through the meetings, the regulations and directives of the SACCO
 Members are helping to enhance good governance of the sacco through their Participation in different
way (formal and informal approach)
2. GOVERNANCE STYLE OF FANA SACCO

1. The
: style, structure and size of the General assembly
 The GA creates sub groups called family (60-125).
 Our general assembly is conducted by representative members.
 We have 240 members representative(4 from one family)
 Each representative members represent for 75-100 members of
the family
1.1. Power of general assembly
 Approving of annual report
 Amending and approving of the by-law
 Approve the annual beget.
 Deciding how much the maximum loan of the Sacco.
8
 Deciding how much the amount of interest is
Annual General Meetings
 In order to enhance member participation and
representation, an Annual General Meeting (AGM)
once a year in accordance with the by-laws of the
SACCO.
 We may call a special general meeting, convened for
special reasons.

 To conduct AGM we notify to members in writing at

least two weeks before the date of the AGM.

9
Cont.…
2. Structure and Size of Board directers
• We have five (5) elected Board members.
• They are elected at the general assembly.
• They are elected for a term of three (3) years.
• If they are eligible they re-elect for the second
term of three (3) years.
• They can’t re-elect for the third term even
though they are eligible.

10
Cont.…
2.1 power of the Board of Directors
• convene general meetings as provided for in the by-laws;
• reports to the AGM, management reports, and audited
financial statements of the SACCO;
• ensure that adequate and effective internal control systems,
and policies are put in place and take all necessary measures
to safeguard the assets of the SACCO;
• keep accurate accounts of financial records in accordance
with applicable laws and best practices;
• approve and review overall business strategies, significant
policies and the structure of the SACCO;

11
 Cont.…
.
 supervise management in the execution of approved plans;
 Appoint, appraise, and discipline the CEO and general
managers.

 propose to general meeting the rate of interest and other

product costing;
 implement all resolutions taken by the general meeting; and
 Ensure that SACCO complies with its by-laws, policies,
relevant laws, regulations.

12
Cont.…
2.2. The minimum eligible criteria to select board
members
• financial status or financial soundness;
• ability (competency and capability) of that person to
perform the proposed function efficiently and
honestly;
• reputation, character, integrity;
• reliability of that person; and
• Any other related factor to the fit and probity of
elected Board members.

13
 Cont.…
3. power of the CEO
• developing management succession plans for approval by the
Board and AGM;
• implementing the decisions of the Board;
• ensuring effective management of the SACCO business in the
best interest of the SACCO and other stakeholders;
• ensuring the development and implementation of business or
strategic plans;
• developing operational plans and budgets for approval by the
Board;
• ensuring that there is effective communication between Board
and Management;
• preparation of quarterly reports for approval by the Board; 14
Cont.…
power of the MANAGER
• ensuring compliance with the laws of the cooperative and
country;
• providing leadership to the employees;
• developing and recommending the policies and plans for
CEO;
• Preparing and submitting monthly management reports to
the Executive Committee covering operational areas such as
loan book performance, statement of comprehensive income,
cash flows, budgets etc.

15
 Cont.…
4. Legal environment of fana Sacco governance
• updated by-laws
In order to implement the SACCO by-law We have different directives
• Saving directive
• Credit directive
• HRM directive
• Property directive
• Finance directive
• Emergency saving and credit directive
• Purchasing directive
• Legal service directive
• Profit distribution directive
• Communication and promotion directive
• IT directive 16
5. Government Supervisory
Currently Fana is subject to regional coop agency
Supervision, under the audit and control
department, by conducts field inspections and
monitors legal and operation activities of the Sacco.
 Expected to audit the Sacco yearly or represent
external auditor.
But in practice fana, by its own budget, has been
audited through external auditor.
17
 Part two:- Staffing, outreach, integration, nature of products and services

1. Fana youth Staffing

CURRENT STAFF ESTABLISHMENT
 There is clear job grade, classification, career structure, promotion and benefit
strategies.
 Current staff establishment position in post (86 employees (head office (51)
branch(35))
 The Recruited staff is specified as CEO->GM-> different Departments ->
division-> section and experts according to the strategic structure of the sacco.
 The Staff is departmentalized as top level, middle level, bottom level
management and officers with clear scope and roles as prescribed in job
description, specification and in internal regulations and directives of the
SACCO.
 Con---

 There is human resource management and development policy

with Clear Job description of each position of the staff.
 Besides there is no role confusion among departments and
employees because there is a defined and clear role and
accountability in each process.
 The employees are diversified professions, have good work ethics
and dressing styles.
Con---
Con---
Con---
 Con---
 STAFFING NEED
 The SACCO has already planned the future staffing demand of the head and
branch offices in its strategic plan.
 work evaluation schedule
 Executive management -weakly
 Middle management- twice a month
 General management - monthly
 Whole staff review – quarterly
 Capacity building
 Induction and on the job training is carried out to enhance work performance of
the employees
 There is a short and long term training and education plan to provide employees
 2. FANA YOUTH SACCO business model in terms of Outreach and Integration

Vertical integration
 fana and other primary coops form secondary level called chomea union
 FANA YOUTH SACCO is one of the founding members of chomea union in
which above 85 members are affiliated (these are different types:- primary
Saccos, any level of multi –purpose and consumer cops)
 Even if the coop integration structure is four tier, but still in finance
there is no federation and above level of coops in our region.
 There is no clear and defined roles of each networks in the integration
because there is a role confusion among coops of any integration
 Con---
The minimum eligible criteria for union membership
 Coop Legal certificate
 Registration fee (2000 birr)
 Minimum 15000 birr share (three shares) during the first registration
year and at least one share every year of the next once. (but in the
initial period it says all amount of share of the members must be
invested in the union)
 The compulsory saving which balances the leverage of the share
must be deposited in the same year.
 con---

FANA’s contribution in the union

purchase of share above two million
compulsory saving above ten million
leadership experience by representing three board
members
help the members of the network according to the principle
of cooperation among coops (they receive loan from the
deposits of fana, providing training and experience sharing)
 Con--
what fana get benefit from the network is
image build/Good will/reputation
interest income from compulsory deposit and
legal reserve fund
income from dividend
small amount of short term loan
 Con--
Horizontal integration
fana integrate with other independent coops bilaterally
or multilaterally for the purpose of cost sharing and
experience share (e.g training was given based on cost
sharing among five coops before two years)
 Con--
out reach
 In terms of Branch outreach:- up to bottom (down ward)
approach ( regional capital > zonal> woreda) based on socio-
economic activity of the area. Currently 7 branches are
opened but the current situation affects its performance.
 In terms of activity outreach – fana use d/t saving and
credit products , members classification , diversification of
products and information dissemination systems to satisfy
members
 3. Fana business model in terms of membership and products

 In general FANA SACCO business model is starting from accepting membership, saving and
providing loan by following these procedures .
Accepting membership (21000)
Fana’s members are mobilized based on the eligibility criteria described in
the bylaw and the membership is very heterogeneous (diversified).
penetration rate of members (as the end of 2012 E.C)
 In terms of Mekelle city sacco members 36.8% (57,026), H/Holds 16.9%
(124,000),population 4.2% (above 500,000)
 In terms of whole Tigray sacco members 4.29% (488,711), H/Holds 1.75%
(1,200,000), population 0.3% (7mil).
 con---
Saving products
 Compulsory saving (Share and Regular saving:- 20:80)
 This is collected only from members for ownership purpose
 It comprises regular saving and members share capital
 Minimum 200, maximum 10000 monthly base
 Follows leverage ratio financial system (1:4)
 Interest is calculated but for the regular saving only
 Non withdrawable (Only withdraw when membership is ceased)
 The same interest rate calculated to the saving amount
 con---
Non-leveraged saving
Different types of Saving product without share capital
Special share
Unlimited amount (there is no min-max limit)
Different rate of interest based on product type
 Con--
Loan
 Credit is providing based on compulsory saving (i.e saving lead credit)
 Business plan, guarantee must be presented
 More than six months continuous /consequent saving
 Repay monthly with compulsory saving
 Minimum loan 1000 birr, maximum is 1400000
 Interest is ranged from 10-12% per annum based on products.
Interest calculation pricing method
 Loan interest is calculated based on cost plus pricing method, and the interest
calculation method is amortization System ( simple interest)
 Saving interest is calculated based on cost-benefit pricing method
 Saving Interest is capitalized based on leverage ratio at the end of year
 
 Con--
Cash Collection and Disbursement method
 Payment and collection is made in front office, back office and through bank
account (optional)
 On Check
 Cash disbursement
 On transfer to customer account
 Pay for fixed asset (suppliers)
 Con---

Lending methodology:
 The loan is made to borrowers on individual basis and Collateral required for
each amount of loan.
 The credit team officials keep the following lending process (steps):-

 Customer identification and screening

 Loan appraisal

 Loan sanction (approval)

 Loan disbursement

 Loan monitoring
 2. Nature of products and Services provided by FANA

A) Financial Services
1. saving product
s/n Product or Service beneficiary /user of Minimum purpose Annual status
type provide the product Eligibility/criteria Interest (remark)
rate
1 Formal/regular saving          
product
1.1 Compulsory saving Members Monthly saving Ownership, Thrift, mutual   Active
200-10000 birr help, access to loan and
income
1.2 Share capital Members Monthly saving Ownership, Thrift, mutual 0 (only Active
40-2000 birr help, access to loan and dividend is
income bearer)
1.3 Monthly saving Members Monthly saving Ownership, Thrift, mutual 5% Active
160-8000 birr help, access to loan and
income
1.4 Non-interest saving Islamic religious Monthly saving Ownership, Thrift, mutual 0% active
members 200-10000 birr help, access to loan a
 con--
2 Non-formal beneficiary /user of Minimum purpose Annual status
saving the product Eligibility/criteria Interest rate (remark)
2.1 Special share Members 1000-200000 birr Investment bond Market base Not active
2.2 Voluntary Members and non-   Security, Liquidity, income, short 8% Moderate
members Not limited by term payments and thrift culture
amount and time
2.3 Child saving Under age Not limited by Saving culture and development of 9% Active
amount and time generation
2.4 Over draft Member based Minimum 5000 Short Loan access for 5% Not active
saving birr on account Administration costs
2.5 Saving for Member and non- Not limited by (Edu . health, food) 7% Not active
Emergency member amount and time
2.6 Pension Member and non- Not limited by For the time of retirement 8% Not active
saving member amount and time
2.7 Joint saving Any formal and Not limited by Security, poverty reduction, equity 0-7% Low
(institutional)informal institution amount and time and fair distribution
2.8 Time deposit Member and non- Bilateral Saving culture, liquidity, income 8.5-9.5% low
member agreement
2.9 Special saving Members 30%, 35%, 40% of For Investment, house and vehicle 5% Not active
the loan request loan
 2. Loan product
s/n Product beneficiar Eligibility/criteria purpose Annual term Repaym Grace period status
or y /user of Interest (year ent (first (remar
Service the rate ) Schedul payment k)
type product   e starts after
provide disbursemen
t)

1 Regular Members * Above six month compulsory Different purpose 10 1-7 Monthly Third month Active
loan saving based, up to 7 times of (Business, personal,
service CS social affair)
* 1000-1.4 mil.
2 Non- Muslim *Above six month non-interest Different purpose 0 1-3 Monthly Third month moder
interest members compulsory saving based, up (Business, personal, ate
bearing to 3 times of C.S social affair)
loan * loan service fee

3 Staff Employee Above six month permanent Different purpose - 0.5-7 Monthly First month Active
loan employee salary based (1-12 (Business, personal,
month salary) social affair)
4 Special Members The account shall be active at For Investment, 12 1-4 Monthly First month Not
loan least 8 subsequent months of house and vehicles active
service saving
 Con---
4.1 Resident/ Members “ Housing 12   monthly First month Not active
commerci
al House

4.2 Investmen Members “ Investment 12   monthly First month Not active

t loan
4.3 Vehicle Members “ Vehicle 12   monthly First month Low
loan
5 Overdraft Members Minimum 5000 birr on Loan for admin costs 12 Max monthly First month Not active
loan account above three
months and quality of 0.5
membership matters
6 Build up Members 6 month repayment Expansion, 10 r/d r/d with r/d with moderate
loan after the first Purchase of
disbursement of loan accessories. with regular regular
Variations. regu. loan loan
7 Loan life Borrower Related with loan  Risk mitigation  prem    with the   Not active
micro s and sharing ium
insurance  trust loan
  contract
B) Non-financial service provided by Fana Sacco
 Training for new members, borrowers and other training schemes
 Experience share- to different types of coops of the region
 Business consultancy with formal collaboration of other partners
 Information and education to the community through face to face and by
open telegram, website and face book pages.
 Environmental Support (greenery, hygiene, community development
programs, displaced people, for desert locust disappear, blood donation etc.)
3. General Summary of FANA YOUTH Business
Model
 Type of business:- financial cooperative /SACCO service
 Level of organization:- primary level which is a financial channel or intermediary of individual persons
(natural persons)
 Establishment: - bottom to top (demand based); and is member and saving lead business.
 Liability:- with limited liability
 Scope of operation area:- regional level (urban base)
 Membership type and classification:- heterogeneous members (all individual persons in the community
above 18 years of old)
 Main target group:- youth
 Affirmative (privileges):- to women and disables
 Government Supervisory:- Regional coop agency
 Accountable:- to members and the coop proclamation
 Outreach strategy:- mainly urban base with top down expansion strategies
 Source of finance:- members base (Self –financing and utilization through members)
 Basic services provided by the SACCO:- Saving, credit, micro insurance and training
 Con---
1. Customer/ 2. Key Activities
member  
segment
 Our members/  Training for a community to develop the culture of saving
customer are  Collecting savings, registrations and services fees from members
segmented  Granting loan for members
based on:-  Loan collection
 Profession  Loan life insurance
 Age  The financial investment for additional income generating
 Gender  Counseling borrowers on using loan effectively
 Location/  Empowering members with training on the concepts and purpose
Geography of cooperative society
 Membership  Collecting and paying interest of loan and savings
 Legality  Training and experience share for members and other
cooperatives

3. Key Partners
• Our members or owners
• Tigray Cooperative Agency
• Women and Youth Associations
• Other Cooperatives
• Youth affairs
• Women Affairs
• Office of Trading and industry
• Gov’t Administration office
• Custom and Revenue office
• Banks and microfinance
• Universities ( MU, AU, RU & AxU)
Con--
4. Value Propositions
• We are delivering loan access for our
members
• Employees and dividend Tax for government
• Creating job opportunity for youths
• A dividend of share for members
• Cultivating the culture of saving
• Enabling members to open their own business
• Motivate others to create other saving groups
• The business start-up training for members
• Strengthening cooperatives in the region
 Con---
5. Customer Relationships 6. Key Resources
   
• We put our members first.  Members
• We approach our customers with respect.  Saving, Share and loan
• Being a servant is our motto and identity.  Staff commitment and skill
• We work tirelessly to create cooperation  Leadership commitment
among other cooperatives.  Professionalism
• We have a covenant to give fast and  Good Image and trust (reputation)
reliable services.  
• We try our best to involve the whole
community in our service.
• Our staffs' sacrifices all their effort to satisfy
the need of their customers
 Con---
7. Channels 8. Cost Structure
   
• Fana Youth Sacco trains members to raise awareness of its • Fund cost (financial spe. cost
service, theories, and practices of cooperative saving interest)
• We survey to ensure our members are satisfied bout our • Staff salaries and remuneration
services. • Pension contribution
• We provide online registration in addition to office registration. • Employee benefits
• We send all necessary information and different formats via • House rent
social media and emails. • Utilities
• We give support via phone and online chat for any requirements. • Technology and Infrastructure
• Members visit and interact face to face with an employed staff of the most expensive for the
the cooperative cooperatives
• Our cooperative use social media and TV to disseminating • distribution of profits and losses
information about our cooperative between members and Fana Sacco
• The cooperative has a members representatives and committees • other admn costs
• We use different promotional materials to share information. • fixed asset
   
 Con---
• General assembly meeting
• The members are organized in family-Networking for easy
information dissemination
• Marketing linkage
9. REVENUE STREAM
• Members registration fees
• Members save to get a loan
• Members pay interest for a loan
• Members pay for saving and credit services
• Members pay for loan life insurance premium
• additional fees for over dues.
• Investment income
• Other services fees
Thank u for your attention!