Group assignment on role of Fana SACCO

in financial inclusion and the challenges in

financial inclusion
Group members of Group 1
1. KALAYU MENASBO
2. ABIYI ATSIBEHA
3. SOLOMON GEBREMEDHIN
4. GOITOM NIGUS
5. GEBREHIWOT GIRMAY
INCLUSION MEASURMENTS AND CHALLENGERS

•FANA SACCO SAVING SERVICE ACCESS

•FANA SACCO CREDIT SERVICE ACCESS
•Accepted loan collateral options
•FINANCIAL LITERACY
•AFFORDABILTY AND COMPETITIVE INTEREST RATE
•STAFF ATTITUDE AND WILLINGNESS
•ACCESSBLITY
•THE CHALLENGES FANA SACCO FACED IN FINANCIAL INCLUSION
1. THE ROLE OF FANA YOUTH SACCO IN FINANCIAL INCLUSION

A) FANA SACCO SAVING SERVICE ACCESS

• Membership is open and volunteer for the age of 18 and above.

• FANA SACCO is open to all individuals who are able to use the
services and are willing to accept the responsibilities of
membership.
• There is no membership segementation, members are
heterogeneous, interms of profession, income, gender, litracy
etc.
• A member can open saving account with a minimum of 200 birr
and a maximum of 10,000 birr monthly on compulsory saving.
• 21,344 members opened saving account of compulsory saving.
 CONTINUE…

• 19,505 net members conduct actual transaction of saving

currently.
• Of the total net members 6,946 are females.
• 700,000,000 birr money saved by these members until 30 june
2013 E.C
• 131,360,100 birr is saved by women members out of 496,281,910 birr
saving as of 30 june 2012 E.C which is 26 %
• 728 children save money for their plan until 30 june 2012 E.C
• Above 1.9 million birr saved by those children.
• More than 10 saving products introduced on which members and
none members can save for their higher and diversified need.
 Members and their savings until 30 June 2012 E.C

487,146,980
500000000

450000000

400000000

351,256,100
350000000

300000000

250000000

93,624,080
200000000

27,470,065
10,737,500
150000000

3,265,235
694,900

100000000

16378
99,100

1208

9697
4002
370

830
50000000
93

98

0
2006 2007 2008 2009 2010 2011 2012 Total

Members Saved amount

Source: FANA YOUTH SACCO annual report of 2012 E.C

No of members by level of education up to 30 June
2013 E.C

3962

8177
7512
Below 12
Diploma
Degree
80 1603 Master
 B) FANA SACCO CREDIT SERVICE ACCESS

• Members are getting a loan multiple of their saving for

investment or underserving loan for urgent need and
purpose.
• 819,287,296 birr loan disbursed for members until 30
June 2013
• 7,675 members received a loan after saving for stated
period and with variety range of saving.
• 26 % (1,996) are women, 27 %( 221,207,569 birr) of the
loan took by women.
• FANA SACCO takes a guarantee 20-25 % of the loan for
loyal members.
 CONTINUE…

• Loan getting process is simple as much as possible. Loan is giving by staff credit
committee by delegation.
• All member can get a loan at least after saving for 6 consecutive months at normal
condition.
• Loan under saving is allowed after 1 month of saving in the time of emergency
• Women and disable members get a loan 7 times of their saving after saving 6 months
saving.
• Loan repayment period varies according the amount of loan requested.
• Members can repay their loan at any time with out additional cost before the agreed
loan repayment period.
• The maximum loan repayment period is 5 years at normal condition. But, after taking
loan there is a possibility of extension up to 7 years in investment and difficulty
case.
• Grace period is allowed for two months.
• 50 % saving discount after taking a loan is possible.
 CONTINUED…

• Loan collateral are as much as simple and accessible.

• Loan collaterals which are not considered as collaterals
in other financial institutions are accepted at FANA
SACCO.
• Rewards the same loan interest rate for all loan takers.
• The loan amount advanced to the client can classify
small, medium or big based on their saving history.
• Loan duration short, medium and long periods.
 C) Accepted loan collateral options
• 100 % loan guarantee must present to get loan and make the loan secured.
• Owner saving and share;
• Members saving and share;
• ምጥልላፍ
• Owner salary;
• Salary of other person;
• Shares of other company;
• Vehicles ( Owner and others)
• Owner house;
• Child saving;
• Time deposit;
• Other person house;
• Bonds;
• Bank savings;
• FANA can guaranteed 20-25 % of the requested loan.
• If collateral is other than vehicles, house or savings, 50 % of the total loan
guarantee must from members saving.
WHAT ARE MEMBERS DOING WITH THE LOAN

• Members start new business…

• Members improve and expand their existing business.
• Members engaged in productive activities.
• Members built house
• Members engage in money transaction activity.
• Members improved their livelihood.
• They learn how to use money wisely and consequently
improve their economic development,.
 Loan give out from 2007-2013 by product and service kind

.
D) FINANCIAL LITERACY

Without awareness financial management is difficult.

•Updated information's are shared via social media to make informed

financial options and decision.
•FANA YOUTH SACCO financial services are available at the SACCO website.
•Mobile application was also developed and available for mobile users.
•Experience shared for above 10 cooperatives.
•Members trained on entrepreneurship.
•Training conducted to enhance saving culture.
•115 round training conducted every Sunday.
•6,251 members trained about SACCOs, 24 %(1,526) are women.
E). AFFORDABILTY AND COMPETITIVE INTEREST RATE

FANA SACCO Pays 5 % interest rate for regular saving monthly.

Pay 9 % interest rate for children saving to encourage
Pays 8-9.5 % interest rate for time fixed saving
Pays 8 % interest rate on voluntary saving.
Interest free saving for Muslim community.
Depending upon agreement, Pays 0- 8 % interest for
institutional saving.
Charges 10 interest rate on loan which is fair and competitive.
FANA SACCO SAVING SERVICE PRODUCTS
S/ TYPE OF SAVING Eligibility Saving amount Saving interest
N paid
1 Compulsory saving Any interested 200-10,000 5
Above 18 year
2 Volunteer saving Any member or none member Any amount 8
3 Child saving Under 18 Year Any amount 9
4 Time fixed saving Any interested Any amount 8-9.5, up on
agreement.
5 Special saving Investiment • 30% 5
House • 35 %
vehicles • 40 %
6 Interest free saving Musilm society 200-10,000 0
7 Institutional saving Any institution or business Any amount 0-8, up on
group agreement.
8 Diaspora saving Those who live abroad • 200-10,000 5
• Volutary 8
Year
FANA YOUTH SACCO in comparison with SACCOs in TIGRAY
No Number of Avera FANA Fana Takes Capital of these Average FANA SACCO Total Loan Average loan Loan fana Loan Fana loan
SACC members ge SACCO the share / SACCOS saving per Capital. disbursed Disbursed disbursed beneficiary beneficiar
OS in those mem Exceeded SACCO. /SACCO y
SACCOS. bers /
SACC
O

2006 839 195,073 233 93 39 112,352,598 133,912 102,325 179,496,168 213,940 0 59,914 0

2007 986 327,666 332 191 57 501,729,384 508,853 812,084 430,120,484, 436,227 120,000 106,545 7

2008 976 427,767 438 561 128 (+28 %) 797,454,044 817,063 3,974,591 689,715,089 706,675 2,381,540 142,430 35

2009 947 501,886 529 1430 270 1,079,376,676 1,139,785 15,586,871 1,033,181,611 1,091,004 13,572,730 175,361 163
(+170%)

2010 944 553,288 586 2679 457( +357 1,322,906,654 1,401,384 45,146,341 1,409,507,636 1,493,122 33,152,632 193,179 294
%)

2011 950 553,079 582 6681 1147( +104 1,693,607,645 1,782,744 146,914,448 2,162,356,521 2,276,164 115,759,824 227,414 910
7%

2012 960 488,771 509 16378 3217 2,692,519,637 2,804,707 516,255,101 3,522,262,043 3,669,022 413,661,300 244,152 2253 0.9
(+3117 %) %

2013 21,34 239,335,270

4
F) STAFF ATTITUDE AND WILLINGNESS

 85 professional staff who are committed are serving owner-

members.
 Hired staffs based on profession and experience.
 Staffs give financial advice for members before investing.
 Staff treat owner-member with respect and transparent.
 Many trainings are conducted to empower staff to give
quality service at an ethical and respected manner.
 Staffs are member centered and care with respect.
Training for new members and
awareness rising using events
Here are some of the professional
staffs.
 G) ACCESSBLITY

• 7 Branches have opened to make the services accessible

• These branches are opened to break the proximity issues
that hinder members and none members from saving
regularly.
• Online membership registration option has introduced.
• All important information about products of saving and the
interest rate they offered have listed in the SACCO website.
• 6/7 working days and until 1:00 evening time.
• Information by phone.
2. THE CHALLENGES FANA SACCO FACED IN FINANCIAL
INCLUSION.

• Liquidty shortage to meet members high loan demand.

• Lack of sense of ownership and low responsibility among members
• Low sense of trustworthy.
• Loan recovery issues.
• Unhealthy competition among cooperatives and financial institutions.
• Unsupportive and low governmental committeement to empower.
• Lack of other external sources of funds.
• Poor financial literacy of the community and members
• Legal challenges. Example; Recogintion to employee staff
• Governemental interference.
• The interest rate charged on loan is low for some members as a result they are weak
at loan recovery.
• Women’s are weak at using the opportunity of the financial services.
FANA SAVING FOR SUSTAINABLE
INVESTIMENT!

THANK YOU FOR YOUR ATTENTION.

If you have any question and suggestion, well come.