Issue 005 Final - Print PDF

THE
SACCO TIMES
YOUR INFORMATION PLATFORM
ISSUE - 2015005
OCTOBER - NOVEMBER, 2015 | KSh 200
Stima Sacco, Chase Bank

to give contractors loans
SASRA turns heat on

non compliant Saccos
Should Saccos invest

in Treasury Bills?
www.saccotimes.com
OCTOBER - NOVEMBER, 2015| Sacco Times
P.O. Box 295, Mumias

Tel: 020 - 259 3364
Email: nitunzeltd@yahoo.com
nitunzeltd@gmail.com
Nitunze Savings and Credit

Co-operative Society Limited
UNWITHDRAWABLE DEPOSIT/SHARES
v These are members shares with a per value
Ksh. 100/=
v Members should have a minimum of 50
shares
v This is an accumulated savings that is a
source of funds with which loans can be
made available to members.
v it cannot be withdrawn instantly.
v The sky is the limit to this Deposit of the
society.
v A member shall cease to be a member of
this society on the date on which notication
in writing is received by the society about the
cancellation of his/her membership society.
CREDIT SERVICES
This is clearly stipulated in our credit policy.
1. Normal Loans
This loan facility is available to members within
the month after application as long as the
members cane plot is months old and above.
2. School Fees Loans
Same as normal loans but for school fees only.
3. Fosa Loans
Is a frequent ofce loan scheme and is a short
term loan facility repayable within two months.
Applicants must have processed cane payment
salary or 15% through Nitunze Sacco Society.
4. Emergency Loan
Facility is processed within three working days.
Age of cane should be ve months and above.
The amount applied should not exceed 20,000/=.
Purpose of emergency should be among the
following: funeral expenses, hospital bill, court
nes, burnt houses etc.
OCTOBER - NOVEMBER, 2015 | Sacco Times
MICROFINANCE LOANS
a) Group Lending
v For those with small businesses
v Payable withing 6 months
v Little interest rates
v No grace period
b) Vegetable Farming
v Grace period 3 months
v Loan payable within 9 months
c) Equipment Loan
v Issued to those in businesses
v No grace period
v Loan payable within 12-24 months
PHYSICAL OFFICES
Nitunze Plaza, Mumias Head Ofce
Malaha Branch, Makunga Branch
MOBILE BRANCHES
1. Nasianda
2. Sabatia
3. Harambee
4. Mungatsi
5. Ogalo
6. Koyonzo
7. Navakholo
8. Etenje
9. Nambale
CONTENTS
THE
SACCO TIMES
YOUR INFORMATION PLATFORM
ISSUE - 2015005
OCTOBER - NOVEMBER, 2015 | KSh 200
Stima Sacco, Chase Bank

to give contractors loans
SASRA turns heat on

non compliant Saccos
Should Saccos invest

in Treasury Bills?
www.saccotimes.com
EDITOR-IN-CHIEF
Reinhard Mosagwe
CONSULTING EDITOR
Joseph Karanja
Email: bobstarconsultants@gmail.com
Tel: 0771 048 926
STAFF WRITERS
Grace Ndirangu, Ken Otieno,
Fredrick Weyimi, Kephas Ayiecha,
Samuel Towet, Anthony Mwachiro,
Corny Mutisya, Joseph Ngure,
Nick Kavai
DESIGN AND LAYOUT:
Judith Okongo
Email: judithokongo2@gmail.com
Tel: 0721-496 922
PHOTOGRAPHY:
Kaniaru Ndirangu
SUBSCRIPTION
Major Capital Agencies Limited
5
SASRA blacklists 5 Saccos over regulations
Stegro Sacco members reap big from new products
Kirinyaga Matatu Sacco ups game to beat competition 10

Nyeri: Wananchi Sacco boosts youth, farmers
12
Why Sacco AGMs are crucial
13
Asili Sacco lives up to its vision 14

Stima Investment wins big in 2015 Ushirika Day
Celebrations 15
32
Chai Sacco to train youth groups 16

Stima Sacco lures Kenyans in Diaspora in growth plan 17
Ufanisi Sacco promotes thrift among members
18
DISTRIBUTION AND CIRCULATION

JETsam Distribution Limited
Kenversity holds Special General Meeting
19
Waumini Sacco conquers new heights
20
PUBLISHED BY:
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Kampus Towers, 1st floor,
University Way
P.O. Box 42317 - 00100, Nairobi
Tel: 0720 380 226 / 0724 172 670 /
0733 272321
Email: info@saccotimes.com,
saccotimes@gmail.com
Website: www.saccotimes.com
Nitunze Sacco picks new board to boost service delivery 22

Kibera Sacco gives members hope
24
Murata Sacco unveils cheque book
26
State borrows heavily as interest rises
30
Equity Bank CEO scoops top award
32
Family Bank floats shares to boost capital base
34
State to review CBK laws
36
24
Stima Sacco partners with Chase Bank to aid contractors 38

Afya Sacco opens new line of business
40
Sukari Sacco set to re-brand
41
Understanding Treasury Bills
42
KCB earns accolades for business acumen
44
37
3
EDITORS DESK
Saccos must adhere to SASRA rules
ince 1931s Governments first formal involvement in Co-operatives when the first
Co-operative Ordinance was enacted to
regulate the operations of co-operatives, the Cooperatives Movement in Kenya has grown tremendously to emerge the best in Africa.
stipulated by the regulator, the Sacco Societies

Regulatory Authority (SASRA).
The vibrant and dynamic Co-operative Movement is a key player in the economy, controlling
about 43 per cent of Kenyas gross domestic product (GDP). The sector employs more than 300,000
people, besides providing opportunities for selfemployment to many more.
The Sacco managers are aware that the principal

mandate of the Authority under the Act as read
with the aforesaid Regulations, 2010 has been
to license Sacco Societies to undertake deposittaking Sacco business in Kenya (popularly known
as Front Office Service Activity or FOSA), and to
supervise and regulate such Sacco Societies in
Kenya among other things.
Today, the Savings and Credit Societies (Sacco) is

the fastest growing sub-sector in the movement,
having mobilised savings of more than Sh450 billion. The sector commands 67 and 62 per cent of
the total assets and deposits/savings, respectively.
The greatest contribution attributed to Co-operatives in Kenyas social and economic development has been in the financial sector, where
Saccos and national financial co-operative organisations, Co-operative Bank and Co-operative Insurance Company (CIC), hold substantial savings
portfolio accounting for more than 31 per cent of
Kenyas gross national savings.
Given the important role the sector plays in the
countrys development, there is need to safeguard
and protect it to ensure more and more Kenyans
benefit from the products and services on offer.
It is therefore disheartening when some players in
the sector fail to adhere to rules and regulations
By failing to adhere to the rules, the managers of

the said Saccos expose their members to financial losses.
Recently, SASRA blacklisted five Saccos for disregarding the rules of operations. Those blacklisted
are Good Life Sacco Society and related Fedha
Micro-Finance Investment Ltd, Prevailing Sacco
Society Ltd, New Milimani Sacco Society Ltd, Millionaire Sacco Kenya and Urithi Premier and related Urithi Housing Co-operative Society Ltd.
We wish to call upon the management of the five
Saccos to ensure they comply with SASRA rules
and regulations for the sake of their members.
The managers should understand that the entities they lead are economic enterprises founded
by and belonging entirely to the members for the
sole purpose of rendering to them the best possible service at the lowest possible cost.
Stima Sacco National Chairman, Dr Ben Chumo and

Chase Bank Chief Executive Officer, Paul Njaga display the partnership agreement to give contractors
loans.
NEWS
SASRA blacklists 5 Saccos

over regulations
According to SASRA acting Chief

Executive, John Mwaka, the five Saccos were collecting money from the
public with false promises of favourable returns on savings and or deposit accounts.
Mwaka urged the public not to deal
with unregistered entities noting
that those doing so stand to lose
their money.
He said the five Saccos were not registered and cannot collect money
from the public or run front offices.
The CEO said Sacco societies are legally restricted and limited to only
carrying out non-withdrawable deposits to lend to members.
Such societies are prohibited from
providing Fosa services such as deposit accounts of any description,
ATM services and mobile money
business among other, the CEO said
in an advertisement carried by a local daily recently.
By Hildah Mutugi
he Public Service Vehicles
(PSVs) Saccos will be audited
by the National Transport and
Safety Authority (NTSA) to ensure
road safety.
By Hildah Mutugi
ive savings and credit societies have been blacklisted by
the Sacco Societies Regulatory Authority (SASRA) for failing to
meet the required regulations.
Good Life Sacco Society, Fedha
Micro-Finance Investment Ltd, Prevailing Sacco Society Ltd, New Milimani Sacco Society Ltd, Millionaire
Sacco Kenya and Urithi Premier and
Urithi Housing Co-operative Society
were blacklisted for taking deposits
from their members without having
SASRAs nod to do so. Some of them
were buying land and sub-dividing
it into plots for members.
Body to audit
Matatu Saccos
John Nthuku, SASRA Board Chairman.
But speaking to a local daily Urithi

Sacco manager, Isaac Gathara, denied that their Sacco was not following the regulations.
He said: We are registered and we
shall make a formal response on the
matter soon. Urithi Sacco has been
looking for members to buy land
and houses. It was established two
years ago.
The manager of Good Life, Peter
Wanjohi, said the company has
been in existence for the last three
years and that it had communicated with SASRA in the past and
explained that Good Life and Fedha
only shared the chairman who later
resigned from Good Life.
SASRA is mandated to licence Sacco
societies to carry out deposit-taking
business; regulate and supervise
Sacco societies; hold, manage and
apply the General Fund of the Authority and levy contributions.
The five Saccos were

collecting money from the
public with false promises
of favourable returns on
savings and or deposit
accounts.
NTSAs move comes as details

emerged that Nairobi county leads in
accident cases where 291 people have
lost their lives this year alone.
Nakuru county comes second with 93
people dead as the authority identifies
carelessness as the leading contributor.
NTSA deputy director for corporate
communications Dominic Kabiru said
Kakamega, Mombasa and Machakos
are among the top five where a total
of 151 fatalities were recorded over the
same period.
He said NTSA will engage in talks with
all Saccos in order to maintain safety
of passengers and pedestrians across
all highways in the country. We will
not hesitate to cancel licences for Saccos which flout traffic rules in spite
of our continued campaign on road
safety, he said.
Recently, a university student was
crushed to death after being sandwiched between two vehicles in Nairobis Central Business District.
Cecilia Njeri, 23, was crossing the road
behind a matatu at the Tuskys beba
beba stage when the said matatu reversed abruptly.
She was rushed to Guru Nanak hospital by good Samaritans and was found
to have broken her ribs, chest bones
and had a ruptured kidney.
According to her brother, she had
travelled home to inform her parents
about her upcoming graduation and
also to let them know that she had gotten a job at the Boma hotel. She was
scheduled to report to work on Monday 12, 2015.
ADVERTORIAL
Stegro Sacco members reap

big from new products
By Kipkoech Chirchir
tegro Sacco Limited which was
initially known as Sot Tea Growers Sacco Limited was registered
on August 5, 1992 to offer banking and
other financial services to its pioneer
members. At the time the banking and
financial services were not easily accessible to many farmers in the area.
Its pioneer farmers were mostly those

delivering tea to Kapkoros Tea Factory. Initially, the Sacco operated from
a rental office in Silibwet town before
moving to their own Plaza in September 2005.
At the moment the Sacco has five
branches in Kapkoros, Olenguruone, Tegat, Kamogoso and Merigi. All
branches operations are interlinked.
Stegro Saccos mission is to mobilise
and prudently manage members resources in order to offer affordable
financial services, create wealth and
improve their standard of living while
its vision is to be a leading Sacco in the
provision of Excellent, Efficient and Af-
fordable financial and other diversified services in Kenya.

The core values are Self help, Solidarity, Self Responsibility, Honesty,
Democracy, Openness & Social Responsibility, Equality and Caring for
others. Initially the Sacco was known
as Sot Tea Growers Sacco Limited but
recently the name was changed to Stegro Sacco with the registration of Stegro Tea Factory.
The Sacco has a variety of products
which include Back Office Products
(BOSA). Under BOSA products such
as school fees loan, Biashara loan,
emergency loan, Jiinue group loan,
Kilimo bora and development loan
are offered.
The Sacco also offers short term advance on crop, salary and pension recoverable in one month.
The long-term advances include
Okoa advance which is payable in six
months with an interest rate of reduc-
The Stegro Sacco headquarters.
OCTOBER - NOVEMBER
NOVEMBER,2015
2015||Sacco
SaccoTimes
Times
ing balance at a maximum of Sh20,000.

Others services provided by the Sacco
include Bankers cheque, Franchaise
Banking, Mobile service/point of sale,
ATM, M-sacco, Mpesa and conference
hall.
The FOSA products on offer include
Boda Boda Saving account, Mama
Mboga Saving, Vijanaa Acount, Jimudu
Savings Account, Jolly Kids Savings Account, Biashara Saving account, Fixed
Deposit Account and Institutions Account
Loan Products
Stegro Sacco encourages the youth,
farmers and other institutions to apply
for loans to help them boost their business. Its Biashara loans are flexible as
they have the following features; Business working capital loan to support
business stock, expansion; Loan term
up to 12-24 months; Flexible repayment frequencies e.g. monthly/weekly/
daily; 6 months account operations and
affordable interest rate flat per annum.
ADVERTORIAL
ATM Services
The Sacco provides ATM cards to customers to access ATM services using
Co-operative Bank branches across the
country.
The ATM services are connected to the
Sacco link network of Co-operative
Bank and this means members can access their cash at any Co-op Bank ATM
countrywide and any VISA branded
ATM or merchant outlets like supermarkets.
Stegro Sacco members waiting to be served in a banking hall.
The Sacco link card allows the members to withdraw cash, check balance,
change PINs and get a mini statement.
Customers can also pay utility bills like
electricity bills at the ATMs. The ATMs
offer 24 hours service.
Salary Advance
The Sacco gives salary advances to customers who bank regularly with them.
Salary advances can be either for school
fees, starting up business like mama
mboga saving, youth who operate boda
boda and other institutions.
Salary advance is processed and paid in
a day and attract an interest rate of 8 per
cent. The 50 per cent rule is also taken
into consideration in offsetting salary
advance. This is a new product where
members have an option of offsetting
>>NEXT PAGE
Some of the Stegro Sacco projects / investments.
OCTOBER - NOVEMBER
NOVEMBER,2015
2015|| Sacco Times
Stegro Sacco members reap big from new products

<< PREVIOUS PAGE
the existing salary advance at the rate
enjoyed by members.
Investments
Among other investments the Sacco
has are Stegro Oil, Stegro Tea Nursery
Bed, Stegro College and Stegro EPZ factory.
The Saccos good management which
ensures transparency and dedication
has seen it attract partners like the Cooperative Bank, ABC Bank, K-Rep Bank
and KCB, among others.
0721531643 - Towett
Its share per capital has also grown from

Sh26053336.30 to Sh36246198 while the
shareholders have increased from 4,704
to 6,170.
Last year the Sacco managed to loan

its members Sh56,262,394.03. The Sacco also grants loans to non-members
which include business loan, microcredit and motorbike loans.

The Sacco is about to complete its own
factory where 95 per cent of the work
has been done. Once the factory is completed 85 per cent of the products will
be exported and the rest sold locally.
The factory is owned by farmers through
the Sacco where 52 per cent of its shares
are owned by Stegro Sacco members
and the rest is being sold to the public
where the targets are individuals and
institutions. The factory is fully licensed
by relevant bodies including EPZ and
Tea Board of Kenya.
The main reason why the factory was
started is to end the monopoly of Kenya
Tea Development Agency KTDA, to improve the tea prices since KTDA is paying less to farmers and to do away with
middle men who have been exploiting
farmers as well as create jobs for the locals.
The factory is expected to operate towards the end of this year. Currently
they have floated tenders for the supply
of fire woods to the factory and transportation of green leaves from buying
canters to the factory.
Part of Stegro sacco investments
Over 10,000 members have registered

to supply raw materials to the new factory as soon as its ready to process it.
The management has already established a market for their final products.
STEGRO
STEGRO SACCO LTD

VISION:
To be a leading Sacco in
the provision of
Excellent, Efcient and
affordable nancial
and other diversied
services in Kenya.
FOSA PRODUCTS AND

SERVICES
F Boda Boda Savings Account
F Mama Mboga Savings
F Vijanaa Accounts
F Jimudu Savings Account
F Jolly Kids Savings Account
F Biashara Savings Account
F Fixed deposit Account
F Institutions Account
BACK OFFICE PRODUCTS
School Fee Loan
Biashara Loan
Emergency Loan
Jiinue Group Loan
Kilimo Bora Loan
Development Loan
F
F
F
F
F
F
MOTTO:
Together We
Succeed
MISSION:
To Mobilize and prudently
Manage Members
Resources in Order to Offer
Affordable
Financial Services, Create
Wealth and improve their
Standard of living.
LONG TERM ADVANCE

OTHER PRODUCTS
SHORT TERM ADVANCE
Recoverable in ones
month time
F Crop Advance
F Salary Advance
F Pension Advance
F
OKOA ADVANCE
F 6 months
F Interest rate on reducing
balance
F Minimum 20,000
F Bankers Cheque
F Franchaise banking
F Mobile services / Point of
sale
F ATM
F M-Sacco
F M-pesa
F Conference Hall
HEAD OFFICE Silibwet

P.O Box 251-20400, BometTel: 020-104352/2045515/020-2026608
BRANCHES
Olenguruone Branch - Tel: 02021772586 | Kapkoros Branch - Tel: 0518003801
Merigi Branch - Tel: 0518011720 | Tegat Branch -Tel: 0202172583
Kamogoso Branch - Tel: 0518003802
FOCUS ON TOP PERFORMING SACCOS IN MOUNT KENYA
Kirinyaga Matatu Sacco ups

game to beat competition
By Hilday Mutugi
atatu Saccos across the
country are coming up with
creative and unique ways of
beating competition.
The Matatu Saccos were formed in order to bring sanity to public transport.
The Government requires matatu and
bus operators to organise themselves
into Saccos or companies for ease of
management and enforcement of discipline.
It is mandatory for all those seeking a
Transport Licensing Board (TLB) certification to be members of a Matatu
Saccos in Kenya or belong to a company.
Matatu operators, who constitute 80
per cent of the public transport system, are estimated to have an annual
turnover of Sh73 billion. To its credit,
the Matatu sector buys over Sh4 billion insurance premiums every year
and remits over Sh1 billion taxes annually.
The sector continues to play an important role in the growth of public
transport and some have now become respected brands in the sector.
One of the Matatu Saccos that have
come up with unique way of beating
competition is KUKENA Sacco based
in Kirinyaga County.
10
powering their members financially

to buy new vehicles.
Speaking during the Saccos Annual
General Meeting held at Roswan Hotel in Keruguoya town, Mbuthia said:
The passengers enjoy travelling in attractive vans and buses and therefore
we are empowering our members to
buy the modern vans and buses.
He added that the upgrade of the fleet
means that they will spend less money on maintenance.
The Sacco has also introduced a concept for school transport where it offers separate transport for boys and
girls.
Although the Sacco has had such
arrangements with schools like St
Agnes Boarding School, Kutus Municipality and St Marys Secondary
School Muthithi, the issue has been
given weight by the recent incident
where a bus carrying boys and girls
to Nairobi was intercepted as Sagana
where it was found that the students
were engaging in shocking behaviour.
KUKENA Sacco is among those cited
as having had a major contribution to
the success of orderly transport system that is run by professionals.
The Sacco which is the biggest in the

region has started upgrading its fleet
to ensure the members have the latest
vehicles in order to ensure passenger
comfort and also reduce the cost of
repairs.
Today, KUKENA Sacco is arguably

one of the most recognised and respected brands not only in Kirinyaga
but also in Nyeri, Embu and parts of
Nairobi. When it was thought that
chaotic public transport could not
build a strong brand, KUKENA Sacco
has proved such as just myths.
According to KUKENA Sacco Chairman, Jackson Mbuthia, they are em-
This recognition is driven by the consistency of good customer service
Kukena Sacco headquarters in

Kirinyaga County.
FOCUS ON TOP PERFORMING SACCOS IN MOUNT KENYA

that the Sacco has maintained since
its inception.
For Kirinyaga County, where the Sacco was born, the honour of being the
home of people who saw opportu-
nity in structured and professionally

run transport management system is
priceless.
Today, the 250-strong membership
Sacco has diversified to transport as-
sociated business including parcel

services, a petrol station, a tyre distribution shot and transport shuttle
services using jointly owned vans and
buses.
According to Mbuthia the success
of the Sacco is due to working with
highly skilled and competent staff,
visionary leadership by the board of
directors, cooperation between the
members, the directors mutuality
and support from the community.
We put customer first. We listen to
criticism and implement positive
change. We undertake continuous
staff training of employees, drivers,
and the board of directors on essentials of good customer service.
We also have exchange programmes
held with similar service Saccos, says
Mbuthia.
One major advantage that has helped
win KUKENA more customers and
admiration is the consistent discipline of their drivers. They are courteous and are genuinely concerned
about the welfare of the passengers.
They also respect road rules and do
not drive their vehicles at dangerous
speed.
The Sacco has an active disciplinary
committee that disciplines errant
drivers and other employees. It also
maintains a 24-hour customer service desk, where those with issues to
raise can call any time of the day and
night.
The Sacco also runs a computerised
fleet management and car tracking system to ensure that the vehicle
owner does not lose money to rogue
drivers.
The member also benefits from the
control of vehicle revenues as all of
the Sacco stages are manned by experienced staff.
11
NEWS
Nyeri: Wananchi Sacco boosts youth, farmers

By Hildah Mutugi
ananchi Sacco in Nyeri
County has entered into a
partnership with companies
such as Lifan Company to enable farmers acquire machinery to help them add
value to their farm produce as well as
generate additional income.
The idea of forming Wananchi Sacco

was mooted in 1991 by the then Nyeri
District Tea Committee and Tea Officer
of 1991 1993 periods.
After the consultations with tea growers from the three tea growing areas,
namely; Mathira, Tetu and Othaya Divisions, the society was formed with the
aim of helping tea growers to improve
their saving and enable them to borrow
for different purposes such as development, school fees and funding micro
enterprises.
On 14th May 1992, the Society was
registered by the Commissioner of Cooperatives in the Ministry of Co-operatives under the name Nyeri District Tea
Growers SACCO Society Limited under
Certificate No. 6531.
By then, an interim management committee of ten members manned Wananchi Sacco with only 827 members,
two employees and a share capital of
Sh1.2 million.
Twenty-four years later it has grown to
have over 45,000 members, 90 employees, share capital of over Sh65 million,
deposits of over Sh460 million and a
turnover of over Sh149 million and a
loan portfolio of over Sh400 million.
Speaking to farmers recently, the Sacco
Marketing Officer, Peter Mwariri, said
the partnership with firms like Lifan has
seen several youths venture into boda
boda business which has greatly helped
them improve their living standards.
Lifan has also been providing farmers
with machinery while Wananchi Sacco
offers loans for the acquisition of the
property and facilitate training of members.
Mwariri said the Sacco was commit-
12
Wananchi Sacco members at a past AGM.

ted to improving horticulture farming
in Arid and Semi Arid areas within and
outside Nyeri County by helping farmers procure water pumps.
Wananchi Sacco vision is To be the
leading and preferred Sacco of choice
in mobilisation of funds through well
researched products and services in the
Republic of Kenya while the mission
it to provide well researched financial
products and services to economically
active Kenyans through well interlinked
branches for them to achieve their social economic needs.
The Sacco is governed by the Co-operative Act and the Rules and the established By-Laws. The Management
structure is well established and ensures democracy, transparency, accountability and good return on Investments to members.
The members have the supreme authority. The members elect delegates
who discuss and give the Sacco mandate of operations in the Annual Delegates Meeting (ADM) which is held at
the end of every year or can be held as
Special ADM for special agenda
There is a Full Management Board that
comprises nine members which is subdivided into various sub-Committees
as shown below: Finance and Administration Committee; Credit Committee;
Education/marketing Committee and
Audit committee.
The division of the Full Board into Sub
Committees is for ease of administration and management of the Sacco and
the subcommittees have specific duties.
There is a Supervisory Board that comprises three members.
GROWTH STRATEGY
When Wananchi Sacco started in 1992
the members were only tea growers in
Nyeri but due to changes in environment and growth challenges together
with the members needs, Wananchi
Sacco expanded to other sectors like
dairy, women activities, youth and
other off farm business entrepreneurial
services.
Competition, technological changes
and availability of information have
made the Sacco to undertake strategic
steps to ensure that it remains relevant
to the community it is serving.
Wananchi Sacco draws its membership
and members from the Small-scales
farmers and micro-entrepreneurs who
contribute savings in form of Shares
and Deposits as well as the Front-Office
Services.
Through the Savings, the members are
able to access credit facilities and other
available services conveniently and
cheaply.
NEWS
Why Sacco AGMs are crucial

By Nixon Kavai
ince January this year thousands
of delegates have been attending their Saccos Annual General Meetings (AGMs) or Annual Delegates Meetings (ADCs) where they
are briefed on their Society financial
performance on the year ended.
The AGMs or ADMs are also the forums where the delegates decide the
way forward for their Saccos, including booting out officials who fail to accomplish their tasks.
For the above reasons it is imperative for Sacco members to attend the
AGMs or ensure their voice is heard
during the ADMs.
During the AGMs or ADMs the following tasks are carried out.
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.
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. Members
should take keen interest in the minutes to confirm whether the resolutions reached during the past meeting
were captured accurately.
To ascertain financial position and performance
Before the date of the meeting, the directors prepare and circulate a copy
of audited accounts for approval and
adoption.
The financial statement gives the
membership a clear picture of performance and whether it is prudent
to continue being a member, keeping
the regular contributions constant, reducing the figure or raising it based on
the returns.
Cosmopolitan Sacco AGM.
Therefore, before the AGM, go through

the financial statements by comparing with the previous years to gather
the trend of performance. If there is a
decline, demand to know the underlying factors and propose ways and
means of improving performance.
Lastly, you monitor revenue growth.
Since dividends are paid on net profits, a member can propose how related expenses should be treated to
improve future returns.
To get the outlook
At the AGM, one gets the chance to
gather how the directors are planning
for future growth. Based on performance, the directors will propose either a dividend pay-out or retaining
earnings.
You should attend to raise issues on
the earned profits for the past year.
Importantly, members should read
the recommendations of the auditors
opinion on the financial statements as
the true representation.
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.
This requirement is a challenge to

many sacco members who want to
borrow but have no one to guarantee.
This may delay ones projects.
The AGM, one gets a chance to meet
other members who are potential
guarantors and promise you would
return the favour. A wide network of
sacco friends increases chances of
getting easy
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. Like employees, the directors
need to be remunerated as an incentive or reward for managing the sacco
on your behalf. This depends on the
performance score card.
To read your wish-list
Members get the rare opportunity to
raise issues outside the agenda of the
day. The Any Other Business (AOB)
session is where the real matters
touching on your return on deposits
would be discussed. It is the time to
propose ways of enhancing Scco performance. This, probably, is why you
should attend the forthcoming AGM.
13
FOCUS ON SOME SACCOS IN NAIROBI
Asili Sacco lives up to its vision

By Nick Kavai
sili Sacco continues to live
up to its vision of being the
preferred Sacco in provision
of quality service and share-holders
benefit.
The Sacco, whose mission is To continuously mobilise members savings

for provision of sustainable competitive financial services by using appropriate technology while adhering
to cooperative principles for the benefits of the share holders, has become
the place of choice for those seeking
good returns on their investments.
Asili Sacco Society Limited was started in 1972 with members drawn from
Ministry of Environment and Natural
Resources, Forest Department now
Kenya Forest Service (KFS), Kenya
Forestry Research Institute (KEFRI),
National Environment Management
Authority, Kenya Wildlife Service
(KWS), Kenyatta National Hospital
and other ministries. Currently, the
Sacco has opened the common bond
and now boasts of a membership of
over 10,000 with the ratio of women
to men being 1:3.
The success of the Sacco depends
greatly on quality service and it is in
this endeavor that during a recent education drive at Kenya Forest Service
(KFS) headquaters, the management
under the leadership of the Chairman, Evans Kegode Aluda promised
members to expect improved services and dedication.
Members were encouraged to have
confidence in the new management
and improve their savings in order
to maximise on the products in Asili
Sacco.
Innovativeness has been the backbone of improved profit which has
ensured tailor made products to suit
Asili members needs through provi-
14
Asili Sacco CEO, Mathias Oliech after receiving awards during a past Ushirika
Day celebrations.
sions of loans to members. The Sacco
and reasonable rates of interest; To
continues to strive for greater heights
provide an opportunity for its individby recruiting new members while reual members to improve their respectaining the current members steered
tive economic and social conditions-,
by the customer service charter.
and to perform the functions and exercise the powers designated for savIn the recent past the Sacco has been
ings and credit co-operative societies
involved in giving back to the society
under the applicable law.
through corporate social responsibility with beneficiaries including LitAsili Sacco Customer Service Chartle Sisters of the poor (Kasarani) and
ter sets out the standards of service
Thika Karate childrens home (Thika).
members expect.
During the event held at KFS HQs the
management issued Asili branded
We want to provide you with the
t-shirts and pens to members an acbest possible service in a caring and
tivity that has been carried out in all
efficient way. The charter sets out rethe counties to all Asili members and
sponse policy for contact with us by
partners.
telephone, email or in person. It also
gives guidance on how Asili Sacco
It is believed that through hard work
staff are expected to behave and how
and co-operation Asili will propel to
we receive and deal with complaints
greater heights as the Sacco of our
and praise, says the Chairman.
future as enshrined in its motto ASILI
OUR SACCO OUR FUTURE.
The Charter states: We are committed to offering you excellent service
The objectives for which the society
with honesty, transparency, responwas established include: To encoursiveness and fairness; We commit
age thrift among its members by acourselves to: Our services are free,
cording them an opportunity to accuand we up hold the ethics in a cormulate savings; To create and develop
ruption free environment and we will
a source of funds for lending to qualiprovide you with clear information
fied members at comparatively low
about our services and products.
Stima Investment wins big in

2015 Ushirika Day Celebrations
By Nick Kavai
tima Investment bagged numerous trophies during the
2015 Ushirika Day celebrations
held on July 4, this year at Uhuru Park.
The Sacco scooped four trophies in

various categories. It emerged first
position in highest return on investment; first position in best housing
and investment projects; first position in the most consistent housing
(best housing and investment projects) and first position in the highest savings housing and investment
co-operative.
Stima Investment is an investment
company registered under the co-operative act whose main mandate is to
carry out investment activities using
members funds.
It has successfully completed putting
up Stima Investment Plaza, Stima
Investment Plaza II, Stima Village at
Syokimau and sale of lands in different regions of the country plus trading in equity and money markets.
According to the Chief Executive Officer, Nelson Irungu, the firms core
values include quality which sees it
always endeavour to demonstrate
the highest possible quality in daily
work and interaction with members, clients, suppliers and all other
stakeholders and integrity where it
upholds honesty, transparency in
all its management and investment
dealings.
Others are innovation where it adapts
creative ways to increase the wealth
of members through new products
and services and social responsibility where it carries out operations in
a socially responsible manner and
Sigilai Kirui, Chairman
Nelson Irungu, CEO
team work as it believes in the synergy principle and to always harness

individual strengths to increase output.
Stima Sacco has been aggressively

seeking new members by diversifying
its products offering. It has increased
its membership and asset base to
move up the ranking ladder to position three from fifth.
The firm has entered into a partnership with various partners in a bid to
serve the members more efficiently.
The partnership ensures members
and non-members of Stima Investment who wish to buy houses and
plots sold by the co-operative have
easy access to cash.
Late last year the firm entered into a
partnership with Rafiki which has set
aside Sh300 million for the members
to benefit from credit facilities. Stima
Investment has a membership of over
30,000 members.
Our partnership with Stima Investment Co-operative Society provides
an opportunity for its members and
non-members to access credit facilities that will promote home acquisition as well as construction, read a
statement from Rafiki Microfinance
Bank.
In July last year Stima Investment Cooperative Society handed over its first
residential housing project in Syokimau, Machakos County. Christened
Stima Village, the residential housing
project came ahead of the societys
commercial projects, which include
Stima Plaza and Stima Mall.
The project, located 3.5km off the
Mombasa-Nairobi highway, comprises a total of 76 maisonettes - 35
three-bedroom units and 41 fourbedroom ones. Speaking during the
ceremony, Stima Investment Cooperative Society Chairman, Sigilai Kirui, said their next residential
project will be on Kangundo Road in
Machakos County.
In July last year Stima Investments
broke the ground for construction of
housing units, to sit on a five-acre plot
CONTINUED ON PAGE 16
15
NEWS
Chai Sacco to train youth groups

By Joseph Ngure
n response to a challenge by United States President Barack Obama
during his recent visit to Kenya
for firms to empower the youth with
the necessary skills, Chai Sacco has
embarked on a youth empowerment
campaign in Nairobi County targeting 200 youth groups who require financial and management training.
to include all members from well-established business organisations and

tea farmers. The society has widened
its membership to include business
people, investors, and savers beyond
the KTDA employees.
Chai Sacco has been recognised internationally by the World Council of

Credit Unions (WOCCU) in Microfinance Expansion Programme (MFI)
among other sixteen Saccos in the
country as a model for others.
The campaign which is being held in

various parts of Nairobi is coordinated by Chai Sacco and various financial experts.
It aims at empowering Nairobi-based
youth groups and businesses with
financial and management skills,
among other types of training.
The Sacco in a statement released by
the Chairman, Boniface Ayub, said
the future growth of the Kenyan economy would require a well-educated
and financially informed population.
As such, we need to empower such
youth groups and social clusters so
that they can contribute to the socioeconomic development of Kenya and
help attain maximum potential as
echoed by President Barack Obama
at the Global Entrepreneurship Summit 2015, he said.
Boniface Ayub, Chai Sacco Chairman

Ayub also said the Sacco is ready to invest heavily in well-structured youth
groups with serious investment potential and is setting aside money to
be extended to these groups in form
of grants. Chai Sacco was registered
in 1973 to offer financial services to
KTDA employees both at the factories
and Head Office.
In 1999, Front Office Service Activity
(FOSA) was started and has evolved
to a fully-fledged Deposit Taking
Society with branches in Nairobi
and Litein and a marketing office in
Mombasa. The Society intends to
open seven more branches and 25
marketing offices countrywide. The
common bond was opened in 2005
The Society has also been selected by

Micro-Save Africa in product Development Programme from micro enterprises to assist the organisation in
product development process.
Its core values which constitute bedrock beliefs and values that drive
the Sacco are Transparency and Accountability, Equality, Team work,
Professionalism and Integrity
Its vision is to be A Sacco providing excellent financial services to its
stakeholders while the mission it To
continuously provide quality financial products and services through
emerging technology, efficient customer care and motivated workforce
to economically empower our stakeholders.
Stima Investment wins big in 2015 Ushirika Day Celebrations

FROM PAGE 15
and 76 luxury maisonettes of which
40 are three-bedroom and 36 fourbedroom. Provisional prices for the
houses were pegged at Sh9.2 million
and Sh9.85 million for the two- and
three-bedroom units respectively.
Land prices in Syokimau have shot up
after the dualling of Mombasa Road
and the ongoing construction of a
16
commuter rail network, with a terminus being built at the neighbourhood.

Stima Investments was registered in
2005 with one of the objectives being
to invest in real estate both for rental
and sale to members and the public.
The co-op has engaged in various
projects in the past such as developing the Stima Investments Plaza
whose expansion was completed in

June 2011. The fully occupied commercial building is its main income
earner.
Besides real estate development, the
co-operative society engages in buying bulk land across the country, subdividing and selling it off to its membership of over 4,000.
Stima Sacco lures Kenyans

in Diaspora in growth plan
S
By Joseph Ngure
tima Savings and Credit Co-operative Society Limited (Stima
Sacco) which was established in
1974 with the sole objective of uplifting
the members social-economic wellbeing has embarked on a campaign to
bring on board Kenyans in the Diaspora.
Stima Sacco is a leading Kenyan, fast

growing and licensed DTS (Deposit
Taking Sacco) with an asset base of
Sh17.6 billion and a membership of
over 45,000. Its vision is to be a market
leader in the provision of world class
financial services to the members.
The Sacco in its 2015-2020 Strategic
Plan aims to grow through innovative
products, unparalleled customer service, aggressive resource mobilisation
and expanded distribution channels.
In the past six years, the return on
members savings has been 11 per cent
to 12 per cent interest deposits and
shares, respectively. Members can also
obtain credit at better rates than those
offered by commercial banks.
The Stima Sacco Chief Executive Officer, Paul Wambua, members of the
Board and Management representatives have been meeting members
and partners to educate them on the
Saccos products and services, and to
receive their feedback. This is helping
them to improve the quality of services
offered to the members.
On 11th July, this year, the Sacco representatives met Kenyans living or working in Dallas, United States at Holiday
Inn while on 18th July, 2015 they met
others residing in Huston at Houston
Marriot West Chase Hotel. On 19th
for 90 days) will be listed as provided

under Section 18 of The Credit Reference Bureau Regulations 2013.
The members can also withdraw a
maximum of Sh40,000 using their Sacco link ATM Card from Stima Sacco.
Stima Sacco CEO, Paul Wambua

July, this year, they met other Kenyans
living in Minnesota, United States at
Jambo Africa Restaurant. The objective
of the meetings was to recruit Kenyan
nationals to join Stima Sacco.
Stima Sacco in its bid to meet the customers demands and in response to
the changes in the market, on July 1,
2015, made policy adjustments on
loan products.
The changes include; Increased the
loan tenor of Mpawa Advance from 30
days to 60 days; Increased the maximum loan amount of Mpawa-Advance
from Sh10,000 to Sh20,000 payable in
two monthly installments; Changed
interest computation method for all
short term loans (repayment period of
up to 12 months) from reducing balance to straight line basis and changed
interest of salary advance from 3% to
5%.
The other features of the products remained the same.
The Sacco has registered with Credit
Reference Bureau (CRB) meaning
non-performing loans (loans unpaid
Stima Sacco has also entered into a

collaborative pact with Family Bank. In
the pact the Sacco members can now
undertake depository services in all
Family Bank branches countrywide. A
member only needs to quote his or her
number and account name to enjoy
Family Bank services.
In the deal with the bank the money
deposited reflect in the Sacco and one
can deposit in any of the following accounts: Alpha Deposit, Share capital
account, Prime account, Junior star
account, Msingi bora account, Twiga
account and Mustard account.
In April 2003 the Sacco responded to
members banking needs by introducing the Front Office Service Activity
(FOSA) to offer banking services to its
members. To date the Sacco has five
branches in Nairobi, Mombasa, Kisumu, Nakuru and Olkaria.
The objective of establishing Stima
Sacco was to enhance members individual socio-economic status by way
of mobilisation of savings and affording them credit at fair and reasonable
rates.
The Saccos mission is Empowering
members for life while the core values
are teamwork, responsiveness, integrity, innovation and professionalism.
The motto is towards a prosperous future together.
17
FOCUS ON TOP PERFORMING SACCOS IN NAIROBI
Ufanisi Sacco promotes thrift among members

By Joseph Ngure
fanisi Sacco Society Ltd which
was registered on 6th July 1973
as a Savings & Credit Society
for employees of Agricultural Finance
Corporation has continued to live up
to its core business of promoting thrift
among members by mobilising savings
and in the process creating a source of
funds for onward lending to members
at a fair and reasonable rate of interest.
The Society which has since opened its

membership to the public is manned
by competent staff ready to serve the
members in a fast and efficient manner.
And in a bid to educate the members
on the wide array of products and services on offer, Ufanisi Sacco on August
15, this year held Members Education
Day at Kenya Institute of Curriculum
Development (KICD), Muranga Road,
Nairobi. During the function the members were informed of the products
and services on offer and encouraged
to continue investing in their Society.
The Sacco assists members by advancing the following types of loans:- Development loans; Emergency loans;
School fees loans and short-term advances known as Members Personal
Advances (MPA) for one month, three
months, six months and one year.
Ufanisi Sacco mission is to empower
members financially by promoting
thrift and offering them affordable and
sustainable financial services using
modern technology.
The Society which was registered with
SASRA on 22nd July 2013 encourages
thrift among members by affording
them an opportunity to accumulate
their savings.
It also creates a source of funds where
members can borrow at a fair and reasonable interest rate and also provides
18
Unfanisi Sacco members during the AGM.

members with credit for provident and
productive purposes.
The objectives for which the Society
was established are: To promote thrift
among its members by affording them
an opportunity for accumulating their
savings and deposits to create a source
of funds from which loans can be made
available to them for purposes of providence or production or both at a fair
and reasonable rate of interest.
To provide an opportunity for each
of its members and their immediate
community to improve their respective
economic and social conditions.
To offer the members complementary
savings and credit services and other
financial products.
To ensure safety and soundness of the
members funds through risk management programme or any other appropriate insurance scheme.
To ensure progress of members
through continuous education, training and dissemination of information.
To cooperate with other Cooperatives
in order to promote members interest
and in furtherance of this object, the
Society is an affiliate in National Cooperative Organisations.
To perform within the relevant law

(The Act, the Rules and the Regulations) and these By aws, all those acts,
deeds and things necessary to further
enhance, promote and encourage any
or all of the foregoing purposes and
objects provided that such acts, and
things are approved by the Annual
General Meeting.
The Saccos vision it to be a leading institution, in the provision of financial
and advisory services to its customers
in a dynamic environment while the
core values are integrity, customer Focus, team work, strategic Leadership,
networking and innovation.
The Sacco which upholds universal
cooperative values as entrenched in
the Sacco by-laws draws it membership from employees or ex-employees
of Agricultural Financial Corporation,
members of staff of Ufanisi Sacco Society, employees of parastatal bodies
and other agencies approved by the
board as per the membership policy
and employees in the private sector, as
approved by the board.
For one to join the Sacco he or she is
expected to have the following qualifiCONTINUED ON PAGE 19
Kenversity holds Special General Meeting

By Correspondent
enversity Co-operative Savings
and Credit Society Limited held a
Special General Meeting on September, this year at Kenyatta University
Science Zone Hall.
According to the Secretary, Dr Ambrose

Jagongo, the agenda of the meeting was
confirmation of the previous minutes of
the Special General Meeting held on 27th
September, 2014; receiving Chairmans
remarks; receiving Supervisory Committee Chairmans remarks; considering
and approving the proposed budget for
year 2016; considering and approving
proposed borrowing power and considering and approving Bosa Loans Insurance and Risk Management Fund.
Kenversity Co-operative Savings and
Credit Society Limited was registered as
a Savings and Credit Co-operative Society in 1976. Originally membership was
drawn from Kenyatta University but now
it has opened up its common bond to the
East Africa.
The Saccos Mission is to mobilise savings, provide friendly and affordable
credit facilities and other financial ser-
FROM PAGE 18
cations: Is not less than 18 years of age,
if a natural person; Is not a member
of another salaried based Sacco with
competing interest as Ufanisi; Is not
directly or indirectly a money lender
or carrying such activities that may
be detrimental to the objectives of the
Sacco; Is of good character and is a
member of the immediate family of the
primary member.
PRINCIPLES
Voluntary and open membership
The Society is always guided by the
principle of voluntary and open membership in its member recruitment
drive without political, ethnic, reli-
A section of Kenversity banking hall

vices for customers while the vision is
to be the most dynamic and profitable
Sacco in East Africa.
The Saccos Slogan is Tuungane Tujijenge while the philosophy is being
pro-active to equitable wealth creation
and management in response to the society and members/customers needs.
The aspirations are: Construction of an
office block on the existing society plot
in Kahawa Sukari; Increase the societys
capital base; Provide a higher rate of re-
gious, gender or social discrimination.

Democratic member control
The Society is fully controlled by members who have equal voting rights on
the basis of one member one vote.
Economic participation by member
Members contribute equitably to the
capital of the Society and share in the
results of its operations.
Autonomy and independence
The Society operates on mutually acceptable terms with its stakeholders
who ensure its autonomy and independence.
turn on members deposits/savings, Provision of more products to the members;

Achieving full computerisation status
and initiate more revenue avenues for
the members.
Kenversity Board of Directors comprise
Dr George Makokha (Chairman), Job
Maina Thuo (Vice Chairman), Dr Ambrose Jagongo (Secretary), James Muteithia (Treasurer) and members Dustan
Indimuli, Mrs. Winnie Mwangi, Charles
Nderitu, Patrick Kilonzo and Mary Ngugi.
Education, training and information

The Society fosters reciprocal, ongoing education programmes for members, leaders, staff and the community
so that they can teach and learn from
each other or from the appropriate resource persons in understanding and
carrying out their respective roles.
Cooperation among cooperatives
In order to better serve the interests of
the members and the community, the
Society actively co-operates with other
co-operatives locally, regionally, nationally and internationally.
Concern for community in general
The Society shows concern to the community in which it exists and operates.
19
Waumini Sacco conquers new heights

By Nick Kavai
aumini Sacco based in Westlands, Nairobi has continued to live up to its vision of becoming the fastest growing
Sacco by providing, effective value added products to its customers.
Waumini Sacco conquers

new heights
The Sacco whose mission is to Empower customers through provision of innovative products and
efficient services through swift resource mobilization, has become the investment choice for
most Catholic faithful and parishioners.
During the Annual Delegates Meeting held on
March 21, 2015, the delegates passed a number of
resolutions for implementation.
In the resolutions the Sacco opened its doors to
all Catholic faithful and parishioners as from May
this year. This is enabling it to increase its client
base and returns.
Fr George Maingi
The delegates also resolved to increase the share

capital to a minimum of Sh10,000. During the
35th ADM in 2014 the delegates resolved that the
share capital be increased from a minimum of
Sh5,000 to a minimum of Sh15,000 distributed to
two years thus a minimum of Sh10,000 in 2015.
The Sacco also plans to open two branches this
year in Kisii and Nakuru. One branch was set
to be opened last month while the other will be
launched in October. The members around these
two counties are encouraged to take advantage of
the services that have come or will come closer to
them. Waumini Saccos desire is to take services
closer to members.
Agnes Mbuya
The delegates also resolved to raise the entrance
fee from Sh200 to Sh500 after considering the
market trend and other factors. This increase in
entrance fee will benefit members as it ensures
increased income, hence increased returns to
members.
Brunal Khumba
20
Since the Sacco has started implementing the

opening of branches and after research done
among Saccos, the management decided that all
loans paid by Waumini Sacco will be channelled
through FOSA.
This will enable members to get

their loans faster and it will also assist the Sacco to pay members their
loans within 24 hours for loans below
Sh300,000 as stated in the customer
care charter.
The Mbanking, ATM, over the counter withdrawals or withdrawals from
any Cooperative Bank POS in the
country. However any payment to
another institution will still be acceptable from FOSA and the normal
rates shall apply.
The Sacco has also revised its tariffs
for loan processing and as from June
2015 the Sacco started charging 0.
5% on the amount of loan approved
or Sh200 whichever is higher with a
maximum charge of Sh5,000.
During the Annual Delegates Meeting held on March 21, 2015, a new
Board was elected
and later elections done within the
Board to determine office bearers.
This was done as follows: Board
of Directors 1)Fr. Geoffrey Abdalla
Mawa, Chairman, Maurice Otsieno,
Vice Chairman, Agnes Mbuya, Treasurer, Monica Njoroge, Secretary, Sylvia Gumo, member, Titus Munene,
member, Fr. George Maingi, member,
Francis Kimani, member and Brunal
Khumba, member. The Supervisory
Committee has Lois Munala, Chairperson, Susan Wasike, Secretary and
Michael Machaka, member.
During the year the Interest and dividends were approved at a rate of 9%
and 9.5% respectively.
STRATEGIC PLAN
The Sacco also launched its 2015 2018 strategic plan during the 35th
ADM held. In the plan the management committed to achieving the targets to ensure Waumini Sacco grows
in leaps and bounds.
Kenyas start-ups to
benefit from partnership
HOUSING
The delegates were told that the
Sacco had finalised title deed processing for phase one to five (Katani
I, II and III, Kitengela and Kantafu);
these were ready for collection from
the Sacco.
Core Values
Waumini Sacco has its core values
and principles which should be ascribed to by all the stakeholders of
the Society ranging from suppliers,
customers, staff and the Board of Directors.
These tenets include the following;
Servant Leadership, Team work,
Honesty and Integrity, Professionalism, Transparency and accountability and Innovation and creativity. The
continuous value addition includes
Customer Centric, Commitment,
Reliability, Confidentiality, Prompt
Service Delivery, Flexibility, Diversity
and Empowerment.
The Sacco operating principles include corporate social responsibility
where the Society gives top priority to
environmental protection in all its areas of operations and contributes to
national vision based on the country
of operation.
The ADM is the supreme decision
making organ of the Sacco and is
held once every year not later than
four (4) months after the end of financial year.
Representation at the ADM is by the
way of delegates normally drawn
from representatives of both Catholic
Church managed institutions and ex
employees referred to as out of common bond.
The Society determines the number
of delegates representing each institution, however the members elects
from among themselves the delegates to fill the available vacancies.
Francis Kimani
By Nick Kavai
Kenyas start-ups will benefit from a partnership between a local bank and a firm with presence in many
countries across the globe.
Maurice Otsieno
The CfC Stanbic Bank has partnered with Seedstars

World, the global seed-stage startup competition
for emerging markets, to identify the best startup in
Kenya.
Up to 12 of the best start-ups in Kenya will compete
to represent the country at the Seedstars World competition at the final event in Geneva and win up to
$500,000 in equity investment.
Monica Njoroge
The local entrepreneurs will receive additional support from CfC Stanbic Bank Kenya. CfC Stanbic
Bank in Kenya will act as the main partner for the
event and will explore potential options for collaborations and partnerships with the participating entrepreneurs to empower them to succeed.
It brings together passionate people and also reflects our entrepreneurial spirit as we help them
take those important first steps in their entrepreneurial journey, Ben Wandawanda, Head of Business Banking, CfC Stanbic Bank Kenya, told journalist in Nairobi.
Sylvia Gumo
Titus Munene
Seedstars World expanded its competition to more

than 50 countries in 2015, up from the 36 countries
for last years edition. Its past participants have
raised $20 million together, providing employment
to +360 employees all around the world.
Kenya has consistently proven itself to be an exceptional startup ecosystem and an enabler of brilliant talent. Together with CfC Stanbic Bank Kenya,
we are very excited to discover and bring support to
all entrepreneurs participating in the competition,
said Gregory Pepper, Regional Manager for Africa at
Seedstars World.
21
NEWS
Nitunze Sacco headquarters in Mumias, Kakamega County.
Nitunze Sacco picks new board

to boost service delivery
By Fredrick Weyimi
itunze Sacco formerly known
as MOSACCO has picked a
new board of management
as one way of improving service delivery to members.
The move comes a few months after

the Sacco promoted Patrick Wechuli
to the post of the Chief Executive Officer after working for the society for
a number of years as a branch manager.
Nitunze Sacco which is located along
Mumias/Musanda road in Mumias
town, Kakamega County has also
elected Peter Magero as Board Chairman after serving since 2005 as Board
Secretary.
term of office expired last month together with that of his deputy, Henry
Manya.
Others elected as board members include Joseph Wasike (vice chairman),
Prodas Okuli (Secretary), Francis
Amboka (Treasurer) and the CEO,
Patrick Wechuli.
The other directors are Ephrem Chitayi, John Lunyiro, Daniel Makwata,
Alexander Lukhayo and Henry Manya.
The CEO in his office
Secretary, Produs Okuli.
Speaking to Sacco Times in Mumias

town recently, the new chairman
urged the board members and delegates to work as a team for them to
compete with other Saccos offering
similar services across the country.
Magero replaced Joseph Ayoi whose
22
Nitunze Sacco Board Chairman, Peter

Magero.
A senior official in her office
NEWS
Magero also asked politicians from
sugarcane growing zones, particularly Mumias zone, to give maximum
support to co-operative societies as
one way of boosting the living standards of the local communities.
Wechuli takes over from Anerico
Chitayi who has moved to Masinde
Muliro University after working for
Nitunze for 24 years.
Wechuli becomes the third Chief Executive Officer at Nitunze after the
founder manager, Michael Washika
and Chitayi.
Nitunze Sacco, was established in
1979 and has three branches, namely; Makunga, Malaha and Nasianda.
The main office is located in Mumias
town, a few metres from Mumias ACK
Diocese headquarters.
Nitunze Sacco members being served in the banking hall.
The society saving deposits stand at

Sh19.297.062.60 .
According to the CEO, the Societys
vision is To be the leading Sacco in
provision of quality financial services
in Kenya while the mission is To mobilise and manage resources so as to
offer quality, affordable and sustainable products and services that will
uplift members living standards.
The Saccos strategic plan covers the
period between 2015 -2021. Among
the plans at hand is launch of zero
grazing business to give members additional income.
ICT Manager Moses Kongoti, Finance Manager, Patrick Sannu and Mildred
Maelo, Branch Manager.
Currently the Society runs Front Office Service Activities (FOSA).

The members of the Sacco are drawn
from cane farmers, women groups,
youth groups and teachers. It covers
four counties, namely; Bungoma, Busia, Siaya and the host, Kakamega.
Finance Committee, from left, John Wasike (Chairman), Alexander Lukhayo

(Secretary) and Daniel Makwata (member).
23
NEWS
Kibera Sacco gives members hope

By Stephen Murimi
or over two years, Kennedy Odede has been overseeing Kibera
slums residents in Nairobi lend
money to each other, a process that has
enabled scores of them to engage in income generating activities.
Odede, the Chief Executive of Shining Hope for Communities (SHOFCO)

founded the Shofco Urban Network to
allow slums dwellers to access credit
without collateral, jobs or even bank
accounts.
Prior to starting the Sacco, Odede in
2004 founded the Shining Hope for
Communities (SHOFCO) with passion,
20 cents and a soccer ball. Growing up
in Kibera, one of the largest slums in
Africa, he experienced extreme poverty,
violence, lack of opportunity, and deep
gender inequality.
However, Odede also witnessed the
palpable hope that persists in slums
and recognised that people sought
something different for themselves,
their families and their communities.
Visionaries like Martin Luther King Jr.
and Nelson Mandela showed Odede
that great, systemic change can come
from within.
Women like Odedes mother inspired
him to build the solutions to urban poverty through addressing one if its core
obstaclesthe prohibitive level of gender inequality.
In 2007, Kennedy met Jessica Posner,
a bright and driven American student
studying abroad. Together they devised
the model that SHOFCO utilises today.
SHOFCOs innovation is to link girls
education to deeply-needed community-wide services.
This increases the value of girls and
women, invites both genders to participate in the solution, and allows girls
schools to be portals for large-scale social change.
Odede and Jessicas partnership is a
unique, pioneering collaboration in the
field of international development. Bolstered by grassroots knowledge, they
24
Outgoing British High Commissioner to Kenya Christian Turner with the Chief
Executive of Shinning Hope for Communities (SHOFCO), Kennedy Odete during the
launch of Shofco Urban Network in Kibera.
have dedicated their lives to bringing
hope to urban communities.
The duo added another feather to
their achievements recently when they
joined Kibera residents in celebrating
the launch of Shofco Urban Network,
a Sacco to enable the residents access
cheap loans.
Shofco Urban Network will allow slums
dwellers to access credit without collateral, jobs or even bank accounts.
All one needs is to become a member at
no cost and save in order to accumulate
shares with fellow members acting as
collateral.
The Sacco which was founded by Odede is supported by the American and
British governments.
It was launched in style in the presence
of US Ambassador to Kenya Robert Godec and British High Commissioner
Christian Turner. Members have raised
Sh12.3 million as working capital for
the new Sacco. The money was raised
through interest from consolidating
their savings for the last two years and
lending them to members to start their
own businesses.
From a single group of single mothers in

the slum in 2013 who were lending each
other money through the table banking
concept, the network has grown to over
3,000 members divided into 300 groups.
The project is run by Shining Hope for
Communities (Shofco).
Up to 86 per cent of the members are
women, a fact that Shofcos chief executive, Odede attributes to the demographics in the slums.
A lot of men are jobless but it is women
who feel the pain of raising a family because if their children are hungry they
are the ones who bear the burden, he
said.
Godec assured the crowd of his countrys technical and financial support
and asked them to stop depending on
politicians as they had failed to rescue
them from poverty.
President Barack Obama believes in
you. The United States will be there all
the way and we are beside you, he said
to a wild applause. He added: It is a
community that builds the nation.
America became prosperous because
people came together to build schools
and factories. You are the only ones that
NEWS
can better the slums.
Turner echoed Godecs sentiments
while pledging his governments support.
Communities can be transformed if
small groups of people come together
and support each others endeavours
instead of waiting for politicians, he
said.
Busia Governor asks

youths to join Saccos
The government has invested heavily in

Kibera through the National Youth Service projects
The United States has pledged to improve healthcare and education in
Kenyas urban slums. US Ambassador
to Kenya Robert Godec said his government is working with communities
and partners in slums to develop a joint
plan of action for provision of health
services.
Speaking at the launch of Shofco Urban
Network (SUN) in Kiberas Kamukunji grounds, Godec said US President
Barack Obama is fond of Kenya and
wants to see communities in slums
transformed. President Obama cares
about Kibera and he would have loved
to visit the area during his recent visit to
Kenya, he said.
Godec said he has formed synergy with
Odede, founder of SUN, to tap into local
peoples goodwill to improve basic services and healthcare.
It is communities that build a nation
and I believe through Shofco, we will
improve education and healthcare.
Together you can build the Kenya that
you want, he said. Turner said residents of Kibera should work together to
improve their livelihoods.
Today I am not a balozi (ambassador),
I am Shofco, said Turner, adding that
the initiative will empower youth and
women in Kibera, majority of who are
jobless. Odede urged the youth to shun
divisive politics, saying it was responsible for poverty and violence in the area.
We do not want politics here. When
you are fighting and killing each other,
politicians are watching on television
at a hotel, surprised at what you are doing, he said.
Busia Governor Sospeter Ojaamong

By Ken Otieno
Busia Governor Sospeter Ojaamong
has urged youth in the region to join
Saccos to benefit from their products.
The governor said the conversion of
seven boda boda associations in Busia county into Savings and Credit
Co-operative Societies was meant
to benefit the youth who can now
access loans easily.
The transformation of the seven associations into Saccos was spearheaded by Ojaamong and Teso
South Member of Parliament Mary
Emaase.
tors in Chakol and Amukura to register the Chamu Sacco, which has
Sh7 million capital base.
Speaking on behalf of the governor, the Chief of Protocol in the
governors office Pekol Mrade said
Ojaamong donated Sh100,000 to
register a Sacco in each Sub-County.
Mrade was speaking at the launch
of the Busia Township Boda Boda
Sacco in Busia town.
He urged the operators to apply for
Sacco loans to improve their businesses.
Mrade called on the operators to
pay the Sh10 levied by the county
government as operation tax.
Emasse helped boda boda opera-
25
NEWS
Murata Sacco unveils cheque book

By Joseph Karanja
urata Sacco Limited in partnership with Family Bank
has rolled out a cheque book
which will ensure the ease of payments,
record of financial transactions, convenience and security of payments by
members and customers.
The Murata Sacco cheque clearing partnership with Family Bank was launched
at Hotel Nokras in Muranga town on
September 25, 2015 in a ceremony attended by delegates, guests and staff of
the two institutions.
Speaking at the Special General Meeting, Murata Sacco Chief Executive Officer, James Kimani Mbui termed the
launch as a big milestone and longterm strategy for the Sacco to realise its
ambitious plans.
Mbui said the launch was in line with
Murata Saccos goal to benchmark with
the best financial providers worldwide,
noting that the cheque book was convenient to customers.
He saluted the team led by the Marketing and Public Relations Manager Salome Mukuria (Project Leader), Jackson
Muhuri (ICT), Joseph Kahumbi (Chief
Cashier) and Anthony Wachira (ICT officer) for working tirelessly to ensure the
success of the project.
Mbui also saluted the Family Bank team
led by Stephen Mararo, Ireri, Charles
Wamuti, Jesse Karimi and Debon Muraya for working hand in hand with his
team to successfully execute the project.
The CEO said the Sacco was in the process of launching ATMs in conjunction
with Kenswitch for members to withdraw and deposit money in major commercial banks.
Mbui told the hundreds of delegates
drawn from Gatanga, Kigumo, Kangema, Muranga area, Kiharu, Kiria-ini,
Kandara, Thika Region, Kahuro and
Maragwa that the membership has now
hit 121, 450 with a capital base of Sh2.1
billion, Sh1.5 billion deposits and Sh1.6
billion loan book.
26
James Kimani Mbui

Chief Executive Officer
Sacco Chairman, Hiram Mwangi

Mwaniki
He said the Sacco has 16 branches and

the Nairobi branch will be opened in
November this year.
The CEO said plans are at an advanced
stage to install ATM facilities in a bid to
change the traditional way of banking
hall service delivery and instead adopt
E- technology in transactions.
Further the Sacco will in the future
engage in virtual banking services, as
alternate transaction channel without
limitation of working time lines. This
will be delivered through agency banking to take our services closer to the
consumers, he said.
He added that to achieve the target
growth objectives, the Sacco management has created a process to enable
the staff embrace new culture, attitudes
and respectful handling of customers at
the workplace.
To up-scale the quality of human resource, the employment entry qualification has been raised to degree level so
as to attract well trained workers. Staff
members are expected to demonstrate
our core values, new culture and respectful conduct as they deliver services anywhere. We regard clients highly
and our new motto is my customer, my
guest being the most important person
in our premises, he added.
He noted that the response from the
market on their new financial products
James Kamau Gachau

General Manager
and agribusiness programmes has enhanced their confidence that they are
right on the business strategy.
In his address the Sacco Chairman,
Hiram Mwangi Mwaniki, said with the
cheque book the members can now
make payments at the comfort of their
desks.
The Chairman noted that the Sacco has
creatively drawn strategic programmes
which seek to deepen financial inclusion and accessibility to ordinary farmers, small, micro traders in the informal
sectors.
He noted that the Sacco was out to
get hardworking citizens with good
business ideas and projects who have
largely been kept out of the mainstream
banking and financial crediting.
NEWS
Wide array of products at Murata Sacco

By Correspondent
ince its formation, Murata Sacco has
been playing a major role in uplifting
the living standards of its members as
well as the residents of Muranga County and
beyond.
S
Dorcas Wanjiku Njuguna
Head Of Internal Audit
The Sacco has come up with innovative products that have endeared it to Many Kenyans.
For now its effects are being felt in counties
including Nairobi, Nyeri, Kiambu and Kirinyaga to mention just a few.
Dairy industry
Already, the Sacco has entered into a strategic partnership with Muranga County
government to strengthen the growth of the
milk industry. This has seen the installation
of 35 coolers by the county government to
enhance milk collection and marketing. The
milk farmers in turn receive their payments
through Murata Sacco.
Jackson Mani Muhuri

Ict Manager
The initiative has received support from

Muranga Governor, Mwangi wa lria who recently lauded the Sacco for sharing his vision
to build the countys dairy industry as key
driver of local economy.
The governor saluted the Sacco for supporting his pet project by paying farmers for their
deliveries in time.
This Sacco stands out remarkably in reaching out to farmers due to its well established
grassroots branch network, he pointed out.
John Kariuki Mwangi Asst. Marketing And Public Relations Manager
Joseph Kahumbi Macharia

Chief Cashier
Real Estate
And in a bid to tap into one of the most lucrative sectors, Murata Sacco recently formed a
subsidiary company to deal with real estate
property development for the shareholders.
The firm, Visionary Ventures Limited was
registered and is shopping for land and recruiting shareholders. The firms objectives
are; To facilitate shareholders/Sacco members to acquire land/plots at affordable rates
which can in turn be used as collateral for
loans; To facilitate shareholders to invest in
properties and to facilitate members

put low cost houses using modern
technologies.
The firm aims to help; Members of
Murata Sacco Limited; Delegates of
Murata Sacco; Board of Murata Sacco
Limited; Employees of Murata Sacco
Limited; Registered Investment and
Self Help Groups; Societies; Companies and any other person.
Rice Farming
Murata Sacco is backing Kirinyaga
rice farmers with necessary facilities
for commercial farming. The Saccos
intervention aims to change the traditional manual method of cultivation
to use of farm machines for enhanced
yields.
According to members of Mutithi
Rice Farmers Cooperative Society,
the machines have reduced human
labour in land preparation, time and
brought organised farming in the rice
growing lowlands of Mutithi region in
Kirinyaga.
Irrigation
Murata Sacco is supporting farmers
to establish irrigation driven agricultural projects. Under the intervention
of Murata Sacco, a farmer, Julius Irungu Gatuku has been able to transform
his farming from rainfall dependent
to irrigation propelled, under this
measure.
He says: I no longer look up at the
skies for rainfall to water the crops,
but I use water from the flowing river
nearby to run my farming projects.
And to tap into the agribusiness, Murata Sacco has developed Kilimo Bora
programme to mobilise investors to
participate in this emerging agriculture sub-sector.
CONTINUED ON PAGE 28
27
NEWS
Wide array of products at Murata Sacco

FROM PAGE 27
The programme provides mass training for farmers with a view to build
capacities to enable them grow high
value crops. The Sacco links the producers to high end buyers through
organised groups.
Fruit Farming
Murata Sacco has introduced fruit
farming in Kiambu County.
The Passion fruit farming has picked
up well as an alternative stream of income to the traditional tea and coffee
cash crops.
Farmers in Gatundu North region of
Kiarnbu County have embarked on
aggressive cultivation of this horticultural crop. Passion fruit growing was
introduced to Gatundu farmers in a
programme dubbed KILIMO BORA
managed by Murata Sacco.
After adopting the idea, farmers within Mataara region of Gatundu who
depended on tea and coffee are producing huge volumes of juicy passion
fruits.
Water Tanks
Water is a critical natural resource
which is required to flow in households to make living better.
This is geared to ensure users have access to

clean, hygienic and reliable water supply at
their households.
Further the reliable water resources created
opportunities to embark on poultry rearing
and dairy farming.
Green Energy
The increasing wanton destruction of forestry
resources in search of energy for basic cooking and heating is posing serious threat
to the survival of valuable environmental
wealth.
Concerned by this grave challenge, the Sacco
has devised a project which is providing alternative sources of energy to the consumers.
The project is promoting access to green energy through installation of biogas facilities to
generate clean energy at households.
The project is applying simple user friendly
latest technologies to process biogas generated energy.
28
Patrick Kamau Mukigi

Senior Accountant
Insurance Policy
Murata Sacco rolled out Jawabu Micro Health
Insurance to help Kenyans adapt a culture
of listing to health insurance as a measure to
mitigate unforeseen dangers in life.
The Sacco has developed a package affordable to the consumers. The Jawabu Murata
Afya insurance product has fewer conditions
compared to other providers.
But often this liquid is not found in

structured supply in most places in
the country.
Realising the deficit
to supply water, Murata Sacco has come
up with a product
which target to support consumers to
acquire water harvesting equipment.
The move involves financing water tanks
to individuals or organised social groups.
Martha Wangari Gichana

Human Resource Manager
Pius Muriithi Hiira

Credit Manager
Peter Kingaiya Gikonyo, Head Of

Operations And Administration
Salome Wanjiru Mukuria, Marketing

And Public Relations Manager
Peter Muthoga Gitau, Head Of

Finance And Accounting
NEWS
Innovative products and services, a determining

factor for membership retention in saccos
By Peter K. Angore
or organisations and in particular
Saccos to serve their members
amicably, they have to be in the
fore front in developing products and
services that meet members ever growing needs. As we know products have
a life cycle (from introduction into the
market to its declining stage) and it is
important that organisations always remain innovative by making sure whatever they offer remains relevant and
competitive.
I urge those who have not embraced

technology to do so as this is the way to
go.
Members have diversified needs and
as way of quenching their thirst, organisations should always introduce new
products and services.
STRATEGIES
For products to remain relevant, Saccos must always rely on the three major
strategies used by most organisations to
develop products. These are:

Members driven needs

Market research & survey

Technology
(a)
Members driven needs
Service rendering organisations may
develop products based on demand by
the members. In most cases members
may gauge the services their organisations provide with other similar organisations and as a result ask their leaders
to come up with similar products.
A good example is the Teacher based
Saccos, where most of the products
offered look similar. While products
developed as a result of members demand are in order, it should be noted
that before an organisation develops a
product, it should be able to sustain it
in respect to financing especially when
it is a loan product. Loan products require huge capital to finance as members come to borrow.
PRODUCT DEVELOPMENT TEAM

Innovative products and services is one
of the key factors influencing customer
retention in organisations. Members
will patronise the products if such products satisfy their needs, and once satisfied they will remain and support the
organisation to grow.
obsolete, organisations constantly do
research on how to replace or repackage the existing and old products. Market research is the most ideal method
organisations can use as opposed to
members driven needs. This is why
some organisations have a research and
consultancy department to assist in advising as far as development of products
is concerned.
In most cases for a research to be undertaken and give positive results, there
is need for Saccos to set aside funds for
this activity.
It is only those Saccos who will be focused, will be able to compete with the
mainstream financial institutions, and
as such, Saccos should not shy away
from educating their members the importance of this fact. This is the only way
to satisfy and retain members.
Not all products developed as demanded by members may be viable as

the reasons for the demands have to be
consistent with the growth of the organisation as well as the background of the
economic activities of the members be
taken into account.
(c) Technology
Finally products may be developed as a
result of Technology. Recently we have
seen many Saccos develop M- Banking services platform due to the use of
mobile phones and other gadgets such
as POS. With the M-Banking platform
members of a Sacco can Deposit and
withdraw cash from their accounts in
their own comfort.
(b)
Market Research and Survey
Market research and survey is another
source of an organisation coming up
with products. As products become
Technology has seen Saccos partner

with other financial institutions to offer
ATM services and members can access
their cash anytime anywhere.
It is for this reason that organisations

have put in place Product Development
Teams to specifically design and develop products in line with the strategic
plan of the organisation.
Based on the three approaches mentioned above, the PDT teams craft and
strategies on making sure new products
are in place. Some Saccos loose members due to lack of innovative products.
When commercial banks were giving
long term unsecured loans, Saccos
were still adamant and offered loans
based on multiplicity of shares payable
in 48 months as opposed to 72 and up to
84 months by the banks.
I salute those Saccos who took the bold
decision to introduce such long-term
products based on pay slip eligibility.
SALES & MARKETING
Finally for products and services to be
patronised by members, the marketing team and the entire staff must relate well with the customers/members.
Customers have different behaviours
and tests, so the front line staff must
understand the members well. This
coupled with best practices will always
make customers like and enjoy the services offered and will always come back
for more and this is the only way organisations can be sustained and be able to
give returns to the member/investor.
The author is the CA Manager, Imarika SACCO
29
NEWS

By Nixon Kavai
he government is borrowing
heavily from the domestic market
despite the high interest rates on
Treasury bills.
According to statistics from the Central

Bank of Kenya, yields on the 91,182 and
364 days Treasury bills all average 21 per
cent this month, rising from about 10 per
cent in June.
The rates have been surging since July
when the CBKs raised its benchmark
rate to 11.5 per cent as it sought to mop
up excess liquidity in the market to save a
weakening shilling, which has strengthened at an average of 103 against the US
dollar, from 106.
In mid October, yield on the 91-day bill
stood at 21.4 per cent, up from 20.6 per
cent the first week.
Similarly, the yields on the 182-day and
364-day bills stood at 21.6 per cent and
21.5 per cent, up from 20.3 per cent and
20.7 per cent respectively in the same
period.
The three-year high yields saw investors
scramble for the three bills the Central
Bank of Kenya (CBK) put on sale. In the
last weeks of September and early weeks
of October, the bank auctioned bills
worth a total of 117 million US dollars,
seeking to raise 39 million dollars from
each.
The 91-day bills attracted the highest
bids as subscription hit a massive 427
per cent.
The total number of bids received was
621 amounting to 165 million dollars,
representing a subscription of 427.4 per
cent, CBKs Acting Director of Financial
Markets John Birech said.
While CBK had sought to raise 39 million dollars, the bank ended up accepting 122 million dollars, three times more
30
Treasury Principal Secretary Kamau Thugge

than what the government had sought to
borrow. Similarly, for the 182 days bills,
the government received a subscription
of 142 per cent. The total number of bids
received was 202 amounting to 55 million dollars, said Birech.
tions that include paying salaries, funding free primary education, counties and
domestic and foreign debt repayment,
according to the Treasury.
The 364-day bills, on the other hand,

recorded a subscription of 316 per cent,
the highest in recent times. The Central
Bank received 518 bids amounting to
123 million dollars.
Treasury Principal Secretary Kamau

Thugge recently told a parliamentary
committee that the government is facing a cash crisis, with the Kenya Revenue
Authority having collected only 1.8 billion dollars in the first two months of the
current financial year.
For the two papers, the CBK accepted

bids worth 51.5 million dollars for the
182-day bills and 87 million dollars for
the 364-day bills, again more than the 39
million it had sought to raise from each
of the two securities.
Extensive borrowing from the local market, though an expensive option, offers
immediate relief to the government to
meet its financial demands. The CBK has
put on sale 91-day, 182-day and 364-day
bills worth 117 million.
Kenyas domestic debt stood at 14 billion

dollars as at October 2, according to the
CBK. The debt had dropped marginally
to 13.6 billion dollars end of September
but has been on the rise as interest rates
on the bills surge.
High cost of funds has now forced commercial banks to adjust their lending
rates upwards to maintain their profit
margins. Some lenders have already
alerted their customers of higher loan
costs from November, saying they will
increase their K component above the
Kenya Banks Reference Rate (KBRR) to
conform to market conditions.
K in the formula refers to various costs
associated with a loan that a particular
Analysts note that the Kenya government has stepped up borrowing from the
domestic market to finance its activities.
The government is cash-strapped, making it fail to meet its numerous obliga-
>> NEXT PAGE
BANKING
HFCK forms holding company ahead of rebranding

By Nixon Kavai
he banking sector witnesses
another major move when
the Housing Finance, an integrated property and financial solutions provider, announced the establishment of a non-operating holding
company, HF Group limited, following approval by the Central Bank of
Kenya (CBK).
The new development will result to

the transfer of the mortgage finance
business of the Company to a new
subsidiary, HFC Limited.
HFC Limited is licensed to carry on
the business of mortgage finance as
well as banking services under the
Banking Act.
Following the approval, the board
appointed Frank Ireri as the Group
Managing Director, with responsibility to oversee the HF Group subsidiaries.
Sam Waweru (formally Finance and
Administration Director) was appointed as the Managing Director,
HFC Limited.
The shareholders of the firm will
continue to own the same shares
that they owned before the re-organisation and these shares will remain listed on the Nairobi Securities
Exchange, the Board said in a press
release.
Frank Ireri, Group Managing Director

Steve Mainda, the Board Chairman,
said the new non-operating holding
company will give the stimulus to register further growth.
The Re-organisation supported by
funds from the recent Rights Issue,
will give the Group the impetus to
register further growth and optimally
deliver on its growth strategy, said
Mainda.
He said the Group holding structure
will allow for the management and
oversight of the group from an entity
that is better positioned to raise capital and channel it to the groups entities as appropriate.
This restructuring will also present

HF Group with an easier route for
acquisition and investment. The nonoperating holding company will host
the group brand and function as a
shared service centre for the subsidiaries, said Mainda.
He said plans are underway to embark on a rebranding exercise to support identity of the new group structure.
The rebranding exercise will be
phased over the next few months and
will create a strong brand identity for
the group and its subsidiaries. The
new capability will allow the group to
offer banking, he added.

>> PREVIOUS PAGE
bank charges its customers on top of the
rate recommended by the Central Bank
of Kenya.
Kenya Bankers Association (KBA) chief
executive officer Habil Olaka says the
KBRRcalculated as a six-month aver-
age of the interest rate on 91-day Treasury bill and the Central Bank Ratewas
introduced to enable customers to compare costs of loans by various banks.
The K is in addition to the interest rate
component and ranges from bank fees
and charges to third party costs, such as
legal fees, insurance and government
levies, he was quoted by a local daily.

He said loan applicants tend to focus
only on the interest rate when making
a loan decision, but the banks have proactively adopted the annual percentage
rate (APR) model which converts all direct costs associated with the loan into
one number.
31
REGIONAL
BANKING NEWS
Equity Bank CEO scoops top award

By Nick Kavai
quity Group Holdings Chief
Executive Officer Dr James
Mwangi was recognised as the
2015 Ai40 CEO of the Year during this
years 8th Annual Africa Investor (Ai)
CEO Investment Summit held in New
York recently.
During the Summit, Equity Bank was

named the 2015 Best Performing
Ai40 Company. The Bank emerged
top from a shortlist of companies that
included Commercial International
Bank (Egypt), Kenya Commercial
Bank, Safaricom, Stanbic IBTC Bank
(Nigeria), SABMiller, Mauritius Commercial Bank among others.
Africa investors Ai40 Investors indices capture the top 40 largest and
most liquid publicly-traded stocks
across Africa, ranking them by market capitalisation and by liquidity, as
measured by the average daily value
traded in US dollars.
Dr Mwangi scooped top title from a
list of CEOs that included Hisham
Ezz Al-Arab, Chairman and Managing Director, Commercial International Bank, Bob Collymore, CEO,
Safaricom, Yinka Sanni, CEO, Stanbic IBTC Bank, Joshua Oigara, CEO,
Kenya Commercial Bank, Albert Essien, CEO, Ecobank, Alan Clark, CEO,
SABMiller, Mohamed Benchaboun,
CEO, Banque Centrale Populaire.
The Ai CEO Investment Summit is an
annual business forum designed to
facilitate action, to highlight and address project-specific investment climate challenges and to shed light on
Africas investment success stories.
It is held in association with the IFC
and the World Bank Group Trade
32
Equity Group Managing Director and CEO Dr. James Mwangi receives the
2015 Ai40 CEO of the Year Award from Africa Investor CEO and Vice Chairman,
Hubert Danso during the 8th Annual Africa Investor (Ai) CEO Investment Summit held in New York. Equity Bank was also named the Best Performing Ai40
Company from a shortlist of top 40 largest and most liquid publicly-traded
stocks by market capitalization and liquidity as measured by average daily
value traded in US dollars
and Competitiveness Global Practice. During the summit, Ai hosts
the Investment and Business Leader
Awards to recognise the achievements of investors, business leaders
and institutions improving Africas
investment climate.
The awards are linked to the Ai Index
Series and are the only pan-African
awards designed to recognise Africas
best-performing stock exchanges,
listed companies, investment banks,
research teams, regulators, socially

responsible companies and sovereign
wealth and pension fund investors.
Kenyas Capital Markets Authority
(CMA) scooped the Most Innovative
Capital Markets Regulator Award,
while the Most Innovative African
Stock Exchange Award went to the
Stock Exchange of Mauritius.
FBN won in the Best African Investment Bank category. This years
REGIONAL
BANKING
NEWS
awards brought together more than
250 of Africas most prominent and
influential business, government and
development finance leaders, as well
as five African Heads of State.
Meanwhile, Equity Investment Bank
(EIB) has hit the ground running in
the mutual funds market with nearly
Sh2.04 billion funds under management, barely a few months into the
soft launch of unit trust products by
its Asset and Wealth Management division.
Following closely on the Equity Bank
market penetration strategy, EIB has
developed unit trust products with an
affordable entry premium from as a
low as Sh1000, as it seeks to demystify
asset and wealth management, while
encouraging a savings culture.
Speaking when he confirmed its
continued success, Equity Investment Bank Managing Director Irungu Nyakera disclosed that the firms
Money Market and Balanced Fund
unit trust investment products had
been designed to provide further financial inclusivity for clients wishing
to enjoy higher returns on their savings.
The mutual fund products by EIB,
Nyakera said, provide a low denomination entry point with a Sh1,000
minimum investment for both funds.
At Equity Investment Bank, we are
glad that our uniquely designed mutual funds have provided us with a
solid take off momentum that will
allow us to revolutionise the local Asset and Wealth Management market,
Nyakera said.
Comparatively, the unique product
features on our unit trust products
has allowed us to claim a near market
leadership slot from a return perspective.
Equity Centre
Currently, EIBs Money Market fund
stands at Sh1.95 billion while the Balance Fund is at Sh95.2 million. The
Managed Accounts comprising both
equities and fixed income contribute
an additional Sh1.09 billion.
With a Sh1,000 minimum balance tag,
the EIB Money Market fund is geared
at providing a high level of yields (1015%) in the short term. To achieve
this, the portfolio is invested in fixed
income securities of various durations at attractive yields to ensure the
return on the Fund is maximised.
On the other end, the EIB Balanced
Fund also with a minimum investment tag of Sh1000 aims at realising
a reasonable level of current income
and enhanced capital growth. This is
achieved by investing in a diversified
spread of equities and fixed income
securities.
The EIB Balanced Fund has a strong
bias feature on equities and related
securities offering long term value
for an anticipated 15-18% return on
investment yield. However, the Balanced Fund is presently more biased
towards fixed income securities due
to high yields and slightly negative
performance of stock market.
Plans by Equity Investment Bank are
at an advanced stage to avail the two
funds countrywide as they are currently available only in Nairobi, across
the Equity Bank branch network.
The two products are also currently
available for Equity Bank Diaspora
customers wishing to invest back
home.
33
NEWS
By Nick Kavai
n yet another game changer in the
banking sector, Family Bank has
floated a Sh4 billion bond aimed
at deepening her core capital and supporting up its lending.
The bank says the Sh4 billion is part of

a five-year strategy to use the capital
market to raise Sh10 billion.
Family Bank Managing Director Peter
Munyiri told investors recently that
the bond will be listed on the secondary market of the Nairobi Securities
Exchange.
Commercial banks have launched a
flurry of cash raising activities since
the National Treasury gave them three
years to increase their core capital
from the current minimum of Sh1 billion to Sh5 billion by 2018.
This has led to most banks seeking
regulatory approvals from the Capital
Markets Authority to raise cash from
the capital market. Family Bank which
is eyeing tier one banking category has
become the latest to float a bond to
shore up her reserves.
Family Bank has appointed Faida Investment Bank and NIC Capital as lead
advisers and placing agents. The bank
which was ranked 16 out of 44 Kenyan
lenders at the end of last year in terms
of assets, said it will use the funds to
boost its core capital and invest in new
information technology systems.
The proceeds will go into Branch Network Expansion, Investment into ICT
software which at a cost of Sh500 million while the rest will go into lending
activities and regional markets entry
financing.
The bank has been on an expansion
drive riding on the emerging business
opportunities in the country. It targets
to roll out five more branches by the
end of the year.
We will use the proceeds to strengthen the banks core capital, improve the
34
Family Bank floats shares

to boost capital base
banks overall IT infrastructure as well
as to propel the domestic and regional
expansion plans, said Munyiri as the
bank announced the start of the sale.
Family Banks feasibility studies show
it has a keen interest on regional pres-
ence including in the Democratic

Republic of Congo, Tanzania, South
Sudan, Uganda, Ethiopia and Rwanda.
Last year, Family Bank which is ranked
fifth in Kenya in terms of branch network turned to its shareholders to
raise Sh3 billion through a rights issue
NEWS
to this growing markets and become
even more relevant to our clients who
trade across borders, said Kiboro.
Kiboro added: Partly this is what the
proceeds from the bond will enable us
to do. We also intend to invest heavily
in our IT infrastructure and in coming up with new and innovative ways
of not just responding to but also proactively responding to our customer
needs.
The bank has 3,000 agents for its
agency banking unit. According to the
banks Annual Report and Financial
Statements for the year ended 31st
December, 2014, it has been growing
at a very fast pace and posted very impressive financial results over the last
few years.
This growth is mainly attributed to
the unwavering support and clear
demonstration of the confidence our
highly esteemed shareholders and
customers have in the Bank and which
in turn has made the Family Bank
Brand grow from strength to strength
over the years.
The growth is also due to the aggressive drive and commitment by our
Board, management and staff. Once
again, we are excited to have outperformed all the banks in Kenya including the listed ones.
The Banks profit has grown tremendously despite operating in a very

dynamic and challenging macro-economic environment.
Our strategy and universal banking
model has and continues to serve us
well. With this remarkable financial
performance, we are indeed on course
to achieve our ambitious growth strategy of becoming a Tier 1 Bank in the
next few years, says Kiboro.
He cites key financial performance
highlights as profit before tax increased by 49 per cent from Sh1.76 billion for the year ended 31st December
2013 compared to Sh2.62 billion for
the year ended 31st December 2014
while total assets grew by 42 per cent
from Sh43.5 billion as at December
2013 to Sh61.8 billion as at December
2014.
Also, total shareholders funds grew
by 78 per cent from Sh5.97 billion as
at December 2013 to Sh10.62 billion as
at December 2014 while deposits grew
by 36 per cent from Sh34.6 billion as at
December 2013 to Sh47.2 billion as at
December 2014.
The loans grew by 36 per cent from
Sh27.9 billion as at December 2013 to
Sh37.9 billion as at December 2014.
The bank has over 1.6 million customers.
to fund growth.
This will allow those investors who
may not be able to get in on the ground
floor to invest with us, Munyiri said.
The bank chairman Wilfred Kiboro
said the bond will enable the bank
consolidate its capital position.
As we continue to grow our market
share, we seek to play in a bigger arenawe yearn to extend our presence
Wilfred Kiboro, Family Bank Chairman
35
NEWS
State to review CBK laws

T
By Nick Kavai
he Government is reforming
laws in order to enhance the
Central Bank of Kenyas (CBK)
role in ensuring currency stability,
a senior government official has
revealed.
National Treasury Cabinet Secretary
Henry Rotich told a media briefing
in Nairobi that stakeholders are
currently providing inputs to the
proposed laws.
The bill will soon be presented to
parliament for debate, so that it is
enacted, Rotich said during the
launch of the Central Bank of Kenya
Golden Jubilee celebrations.
The bank opened its door in 1966, and
began circulating the first generation
of Kenyan currency notes.
Rotich said the new law will align
the functions of the bank with that
of international best practice, adding
that operational independence will
lead to greater accountability to the
financial sectors.
Through the proposed law, the
government hopes to achieve further
deepening of the financial markets,
greater supervisory vigilance as well
as increased market discipline.
The CS said that the proportion of
currency outside banks has declined
significantly, reflecting financial
deepening and increased financial
innovations.
36
Treasury CS Henry Rotich
Through the proposed

law, the government
hopes to achieve further
deepening of the financial
markets, greater
supervisory vigilance as
well as increased market
discipline.
also promoting the development of
government bonds market in Kenya,
with the objective of lengthening the
maturity profile of securities in the
domestic debt portfolio.
Through this initiative, the Central
Bank in conjunction with the Treasury
has so far successfully revitalised
the government bond programme
and skewed the debt portfolio to the
current ratio of 78 per cent treasury
bonds and 22 per cent treasury bills,
he said.
Central Bank Governor Patrick

Njoroge said his organisation will
endeavour to promote transparency
in credit pricing so as to improve the
monetary policy transmission to the
financial sector.
Meanwhile the Central Bank of Kenya

has appointed the Kenya Deposit
Insurance Corporation (KDIC) as
the liquidator of Dubai Bank Kenya
limited in terms of Sections 53(2)
and 54(1) (a) of the Kenya Deposit
Insurance Corporation Act, 2012.
Njoroge said that the Central Bank is
According to a notice press release,
the KDIC has since commenced

processing payment of protected
deposits of up to Sh100,000 per
account and will pay all claims whose
forms have been duly completed and
returned to KDIC.
The payments are being made
through individuals bank accounts
and/or M-pesa as provided by the
claimant. Other deposit and creditor
balances will be paid as and when
funds become available from the
liquidation.
KDIC requests Depositors of
Dubai Bank limited (IL) to collect
claim forms and return them duly
completed from the banks Head
Office on Kenyatta Avenue, Nairobi
and Central Bank of Kenya branches
in Mombasa and Nakuru respectively
during office working hours. The
forms can also be downloaded from:
www.depositinsurance.go.ke, read
the notice.
The notice signed by Aggrey Bett,
Acting Chief Executive Officer, said:
KDIC will continue to protect the
interests of the depositors in pursuit
of its mandate to instill confidence
and to foster financial stability in the
Nations financial system.
NEWS
Points to consider in property investment
any Kenyans are taking loans

from Sacco in order to invest
in real estate. But before one
invests in real estate, he or she needs
to consider a number of factors that
will ensure he or she does not burn his
money.
Our writer, Nick Kavai explores some of
the factors to consider before going to
the Sacco to take the laon:
Are you thinking about investing in
property? It may seem easy; however
there are a number of points to consider
before you dive into a long-term commitment, to ensure security, success
and a strong return on investment.
Global real estate portal, Lamudi explores the top 10 things to keep in mind
when searching for the perfect rental
property.
1. The neighbourhood
The first thing to consider is the location
of your investment. Buying a house in a
high-end neighbourhood will attract
wealthier tenants, while investing in a
property in a university town is likely
to result in leasing to students during
term-time. Before you start looking,
make a list of areas, and spend some
time in each one to get a feel for the
neighbourhood.
2. Amenities
As important as the neighbourhood itself, consider what is available for your
tenants. Are there schools for their children? How far away is the nearest hospital or supermarket?
Choosing a property in close proximity
to current or planned shopping centres,
transport connections, and sports facilities will be a huge draw for potential
renters.
3. Crime
Just like the location, the local crime
rate will influence the types of tenants
interested in renting your property.
Ensure that you research the area carefully to determine whether crime will
become a problem. Is there a police
station in close proximity? Is vandalism noticeable in the vicinity? Has the
Rental houses
crime rate risen in recent years? These
are all questions to ask yourself before
purchasing.
in your chosen location, to calculate

how much you will lose to taxes each
month.
4. Jobs
To make your property as attractive as
possible, consider purchasing in an
area near to large corporations, or a
commutable distance away. While no
one wants to live right on the doorstep
of a building site for a major corporation, new businesses mean more employees in the area. If you would rather
invest in a quieter neighbourhood, consider commuter towns, likely to attract
workers looking for a more rural location.
7. Insurance
Do not forget, renters will not necessarily treat your property as you would
treat it yourself. Particularly if you are
renting to students or younger age
groups, keep in mind that damages do
not take long to occur and these can be
costly. Furthermore, if the area is prone
to flooding, insurance is essential to
protect your investment.
5. Rental costs
Research how much other properties
in the area are charging per month.
Ensure that you look at a number of
houses and apartments, and examine
how the rental prices have increased or
dropped over the past five to 10 years. If
the average rent in the area is too low to
cover your investment, consider looking elsewhere to ensure you dont lose
out.
6. Property tax
Make sure you have educated yourself on property tax, and how this can
change overnight. Remember, just because the property tax is high, this does
not mean that you should necessarily
walk away. Compare the property tax
with how much you can charge for rent
8. Target tenants
Before you purchase a rental property,
make sure you know who your ideal
tenants would be. Are you looking for
a student let, a family home, or a classic apartment for young professionals?
Are you going to allow your tenants to
decorate the property themselves, or
will you provide furniture? All of these
decisions influence how long a tenant
will stay, and ultimately how successful
your rental property will be.
9. Management
Dont be overambitious. Be realistic.
Do you have the time and resources to
manage your rental property yourself,
or should you explore the possibility of
employing a property manager to both
find tenants and take care of your property? This will free up your time, but cut
into your return on investment.
37
COVER STORY
Stima Sacco partners with

Chase Bank to aid contractors
By Joseph Karanha
tima Sacco and Chase Bank have

partnered to give loans to contractors bidding for electricity connection jobs from Kenya Power.
The deal will see the bank finance a
Sh650 million fund from which the contractors can borrow.
The funds will be disbursed at a premium by Stima Sacco. USAID will provide guarantees for the loans to a tune of
Sh814.3 million.
Speaking during the signing of the
agreement, Stima Sacco National Chairman, Dr Ben Chumo, said the strategic
partnership was a testament of the Saccos commitment to providing services to
its members.
Dr Chumo added that the partnership will enable the growth of the SMIB
business line and in particular contractors who have been missing out on opportunities due to lack of bid and performance bonds.
In his address
Chase Bank Chief Executive Officer, Paul

Njaga reiterated the banks commitment
to be the partner of choice for the entrepreneurs on their journey.
Chase Bank aims to offer a onestop-financial solution to our clients.
We have realised that the Sacco sector
is price sensitive hence partnering with
Saccos and Co-operatives by offering
subsidised rates with clients, he added.
Njaga said the first phase of the rollout will provide an array of services to
Stima Sacco clients, which include advanced payment guarantee, bid bonds
and performance bonds.
He said Chase Bank Kenya is very
keen on supporting the SME sector and
through this partnership with Stima
Sacco, Small and Medium Enterprises
(SMEs) will have increased revenue
growth, improved efficiency in service
provision, flexibility in operation as well
as return on investment.
Njaga said the fund is expected to
supplement government efforts to expand funding to SMEs through initiatives
like the Uwezo Fund as well as reserving
of 30 per cent of governments
1
38
procurement contracts for women,

youth and persons with disabilities.
Stima Sacco aims to strategically
align to key players within the Sacco
space as well as the entire value chain.
Through this partnership Chase Bank
will gain traction in the Sacco space,
align with key Saccos and Co-operative
Societies in the country in provision of
financial services and carve a niche in
the Sacco space as the financier of the
choice, remarked Eunice Kimera, Chase
Banks Assistant General Manager- SME
Partnerships.
Chase Bank (K) Ltd was incorporated in 1995. The Bank received awards
for being the Best SME Bank 2013, Fastest Growing Bank in Kenya in 2009 and
2010, as well as a special award for product innovation, at the Banking awards
2011 and 2013 in recognition for their
role in creating innovative products for
the SME market.
Chase Bank places a keen focus on
the SME and the provision of innovative
products for this ever growing market.
The Bank, modeled around relationship
banking provides its customers with value added services like Bank Assurance,
Bank Brokerage, and off shore investment op-
COVER STORY
portunities with the aim of improving
their overall customer experience.
Stima Sacco Chief Executive Paul
Wambua while welcoming the guests to
the partnership signing ceremony said
the partnership marked a new beginning
for the Sacco and will open new doors in
its growth and diversification strategy.
The signing of this partnership between Stima Sacco and Chase Bank is
indeed a testament to the fact that innovation and diversification as a strategic
approach seeks to respond to the need of
seamless service delivery to our customers across the globe, he said.
Wambua added: With the liberation
of our bylaws four years ago, the Sacco
began to service customers from the
non-energy sectors. We introduced various products and services targeting SME
who felt left out as our products and ser1. Stima Sacco Chief Executive Officer
Paul Wambua and National Chairman Dr Ben Chumo shake hands
during the signing ceremony.
vices could not fully service their needs.

Chase Bank and USAID have made it
possible for us to serve this very important market segment. As you are aware,
the government has been encouraging
youth to venture into income generating
activities as formal employment opportunities shrink every year.
Wambua added that the government
has set aside 3o per cent of all government contracts to youth and women.
This group lacks capital to be able to be
able to undertake the contracts, Stima
Sacco is poised to serve this market courtesy of this partnership. This partnership
will allow thousands of SMEs service
their contracts on time.
Stima Sacco is aware that excellent
service is the key determinant to the
choice of a financial partner. The spirit
of partnerships and collaboration will
ensure the Sacco transents legal and operational huddles in its endevour to offer
competitively priced products to its clientele, the CEO noted.
I am confident that this partnership
will open more opportunities for mutual

collaboration between the two organisations. With a strong commitment from
the parties, I am confident that this collaboration would inspire more joint ventures in future and increase the growth
of our membership loan book as well
as contributing to social economic well
being of our clients. I once again want
to thank all our partners Kenya Power,
Chase Bank and USIAD among others
for their support to make this day a reality, he concluded.
2. Stima Sacco National Chairman Dr

Ben Chumo and Chase Bank CEO
James Njaga display the deal.
3. The National Chairman Stima Sacco
Dr. Ben Chumo (left) and the Chase
Bank CEO Paul Njaga signing a
partnership in Nairobi.
4. Proxima Group Executive Chairman
Moses Muriithi
5. Stima Sacco National Chairman Dr
Ben Chumo
3
39
NEWS
Afya Sacco opens new line of business

By James Karume
n a bid to meet the expectations of its
members, Afya Sacco has continued
to roll out a number of products to
suit their taste.
markets, business opportunities and

economic growth for the members,
society and the nation, the chairman
said during the launch of the product
recently.
Recently, the Sacco launched Afya Sacco Microcredit Activity (AMCA) which is
an important milestone in the societys
history.
Lukiri said AMCA targets the unbanked,

credit constrained and micro entrepreneurs in the urban and rural communities and it aims at giving opportunity
to members, business persons, youth,
women and farmers to access savings
and credit facilities to enable them boost
their business potential, growth and development.
By launching AMCA, Afya Sacco opened

a new line of business that is spurring
the growth of the society and positioning it as a major prayer in the Co-operative Sector and financial industry.
D.M.K Waroe, CEO
Afya Sacco Society was formed in 1971

by a group of 20 health workers and registered by the Ministry of Co-operatives
on 8th May, 1971 as a savings and credit
co-operative society.
Our mission is to promote the social

economic wellbeing of the members by
providing affordable investment opportunities, acquisition of properties and
creating additional income for members, said Lukiri.
Within the last 43 years the society has

grown into a large financial institution
with over 40,000 members spread all
over the country in 103 branches.
The primary objective of the society has
been to promote thrift among its members by affording them an opportunity
to accumulate their savings and deposit
and provision of credit for productive
and provident purposes thereby enabling them to improve their economic
and social wellbeing.
According to the National Chairman,
Vitalis Lukiri, the society has enabled
members to save over Sh9.7 billion and
has given members loans totaling to
more than Sh50 billion since inception.
The society has given members loans
for productive and provident purposes
including capital development, education, buying land, developing houses,
medical treatment, starting businesses
and other needs.
Although the society has had an impressive performance, it has faced challenges through competition by other
financial players and the increasing
members demands. This has called
for creativity and innovation to open
new frontiers and opportunities for do-
40
He said the Society had trained and

equipped its staff with knowledge and
skills that they will use to offer fast and
efficient services to AMCA customers
using an up-to-date information technology system.
V.P.Lukiri, Chairman
ing businesses. To keep abreast with
the changing economic situation in the
country brought about by liberalisation
and devolution, the chairman adds, the
society decided to expand its business
scope and products range by introducing the microcredit activity.
This new activity will support the transformation of the society into a one-stop
financial centre. The microcredit activity
will open a new line of business that will
target the unbanked credit constrained
people and micro entrepreneurs in the
urban and rural communities.
Through AMCA the society will open
business Centres in the counties and
districts to tap into the new opportunities. AMCA will be a critical innovation
in driving the society business in the
next millennium. This will create new
Afya Co-operative Savings and Credit

Society is a democratic, member driven, self-help, financial institution. It is
owned and governed by members who
share the same common bond.
Afya Sacco treats all members equally regardless of race, religion, colour,
creed, gender or job status. These practices are in line with core co-operative
values that are shared and nurtured by
the co-operative movement worldwide.
The operating principles include: Open
and voluntary membership; the Societys doors are open for membership
to all who wish to join it as long as they
are within the accepted common bond.
Members are free to withdraw their
membership if they so wish provided
they do not have outstanding obligations with the Society.
Democratic control: The members enjoy
rights to vote and participate in making
decisions affecting the Society through
their elected delegates.
NEWS
Sukari Sacco members being served in the banking hall.
Sukari Sacco set to re-brand

By Fredrick Weyimi
ukari Sacco Co-operative Society
in Mumias Sub-County plans to
re-brand in order to tap into the
wider market across the country.
According to the Sacco Chairman,

Isaac Sheunda, the Board has identified a firm that will launch programmes towards achieving the rebranding objective.
We aim to tap into new markets and
enhance our corporate identity which
will provide a platform for the Sacco
to compete favourably in the market,
said Sheunda.
Addressing Sacco members at Booker
multi-purpose hall during the Special
General Meeting recently, the Chairman revealed that the re-branding will
see the society get a new name and
equally change the mode of electing
officials.
Currently, the Saccos name seems to
be an entity of people in Mumias who
deal in sugarcane only. But we want
to expand our membership by having

members from outside the sugar industry, explained Sheunda.
The Chairman said the Sacco was improving in its operations as Mumias
Sugar Company (MSC) was remitting
members deductions.
We shall be able to disburse loans to
members in the near future and meet
other financial obligations after going through a serious cash flow when
MSC was experiencing financial hardships, he said.
We aim to tap into

new markets and enhance our corporate
identity which will
provide a platform
for the Sacco to compete favourably in the
market,
Sheunda said between December

2014 and August 2015, MSC owed the
Sacco Sh85,603,326 million and others Sh138 million.
But the employer has in the last two
months remitted over Sh30 million
for its workers who are our members,
he explained, adding that the Sacco is
headed in the right direction after the
appointment of a new managing director at MSC, Eroll Johnson.
Kakamega County Co-operative
Commissioner, Nathan Mukhweso,
said Sukari Sacco has over Sh100 outstanding debts and urged the board to
come up with modalities of clearing
the debts.
He urged the officials to use all venues including involving the cooperative movement and circulating names
of defaulters to the Credit Reference
Bureau so that they can be hunted to
repay back the loans.
41
BANKING
Understanding Treasury Bills

By Kosta Kioleoglou
ver the last few weeks, the
Kenya T-Bills have been both
in several headlines and in the
centre of most economic talks. Everybody started to talk about them. So I believe it is important to understand what
T-Bills are and what is happening with
the T-Bill high yield increase.
Treasury Bills (T-bills) are the most

marketable money market security.
Their popularity is mainly due to their
simplicity. Essentially, T-bills are a way
for the governments to raise money
from the public.
T-bills are short-term securities that
mature in one year or less from their
issue date. They are issued with threemonth, six-month and one-year maturities. With exception of the 364-days paper which is on offer once every month,
91- and 182 -days Treasury bills are sold
weekly.
Each new offer is advertised in the
newspapers (Daily Nation Newspaper
on Fridays). T-bills are purchased for
a price that is less than their par (face)
value; when they mature, the government pays the holder the full par value.
Effectively, your interest is the difference between the purchase price of the
security and what you get at maturity.
For example, if you bought a Sh100,000
- 91-day T-bill at Sh96,000 and held it
until maturity, you would earn Sh4,000
on your investment, (depending on the
% offered).
This differs from coupon bonds, which
pay interest semi-annually. Investors
who do not wish to hold their investments until maturity are allowed to sell
back (rediscount) their Treasury Bills
to Central Bank as a last resort. This is
however punitive to the investor as a
way of discouraging the practice.
42
Treasury bills (as well as notes and

bonds) are issued through a competitive bidding process at auctions. If you
want to buy a T-bill, you submit a bid
that is prepared either non-competitively or competitively.
In non-competitive bidding, youll receive the full amount of the security you
want at the return determined at the
auction. With competitive bidding, you
have to specify the return that you would
like to receive. If the return you specify
is too high, you might not receive any
securities, or just a portion of what you
bid for. In Kenya, as of this year (2015),
a retail investor can electronically invest
in government securities with as little as
Sh3000 in a move that was bound to improve market liquidity.
The biggest reasons that T-Bills are so
popular is that they are one of the few
money market instruments that are affordable to the individual investors.
Other advantages are that T-bills (and
all Treasuries) are considered to be safe
investments because the government
backs them.
The question is though what determines the percentage that the government is willing to pay in order to borrow
money?
Just over a year ago (July 2014) the yield
on the 91-day Treasury bills was at 9.27
per cent. Today, October 2015 interest rates have gone haywire, with the
weighted average interest rate on the
benchmark 91-day Treasury Bill surging to 20.6 per cent.
This is a 12%+ respectively real increase of the interest that the Kenya
government is willing to offer in order
to achieve cash liquidity and pay its
bills. The actual increase is over 120%
in a year!!! Considering the fact that the
government had planned the Budget
in June, expecting that would go to the
market and borrow money at 8 per cent

the situation becomes more complicated. The increase of the T-Bill interest
rates has also a direct effect on the interbank rate which is over 27% already.
A large government expenditure growing day after day requires more and
more income and when the income is
not enough the need to find alternative
solutions to finance the countrys expenses is obligatory.
The country already has borrowed large
amounts of money directly from the
IMF (International Monetary Fund),
BANKING
Europe via Eurobonds and indirectly
from several other sources outside the
country for it to support the expenses
and the infrastructure projects that are
under construction around the country.
Another way to get cash is to look for
money inside the country by targeting
retail and institutional investors via TBills, bonds etc. When I see a government who is ready to accept as little as
KES 3000 while offering over 20% interest rates I start to worry.
How bad is the situation?
Over the last 12 months, we have seen
the currency losing over 15% of its value
against most of the foreign currencies,
we saw the expected growth rather
going down. We faced a two times in-
crease of the CBR in just 30 days by

almost 30%, (CBR was 8.5% and now
11.5%).
We have seen the account balance deficit growing, the external debt becoming bigger and with the currency losing
its value, it is becoming harder to be
repaid, unemployment remaining extremely scary high, the real estate sector stagnating and already starting to go
down, tourism sector not been able to
recover, the stock market facing huge
challenges, two banks have gone down,
and the list goes on.
All the above bad economic data force
the government to offer more in order
to find money to pay the countrys lia-
bilities and bills. Part of what is happening is because the government is trying
to defend the shilling by all means. And
that is what is pushing the interest rates
high, the emerging need for money by
the government.
Sounds like this is a good opportunity
for investors to make some good and
easy returns?
In the short term maybe. The reality is
that what matters is not the percentage we get for our money but the actual value of our money. For example
in UK, you will get maybe 1% return on
T-Bills but the British Pound remains
strong, with high value growing against
almost all foreign currencies. So actually even if you get 30% on your money
but the countrys economy is not strong
enough in order to support its currency
and create sufficient income to be able
to pay its bills then eventually the local
currency will devaluate, and the whole
economy will go into a new phase with
big challenges.
So before we start celebrating I suggest
we start to read behind the letters. Understand where we are standing; is it
solid earth or moving sand?
The problem of the Kenyan economy is
quite complicated although it is easy to
explain. Like every business, a country
needs to produce more income than
its expenses. A healthy business also
requires to make the right moves and
expand in a sustainable way that will
create the right environment for a profitable future.
If we start to grow a business and while
we are doing well we start to spend
money without control, this results to
lack of healthy business expansion.
When our managers and stakeholders
spend most of their money without reinvesting in the future of the company
or decide to proceed very fast with
mega plans that will expose the companys liquidity, then the chances to see
our business going down are very high.
43
BANKING
KCB earns accolades for business acumen

By Nick Kavai
he Global ratings agencies Standard & Poors (S&P) and Moodys
have assigned KCB Group top
ratings and a stable outlook, affirming
the Banks strong corporate franchise
and its increasing penetration in the retail market.
The Groups strong capital ratios which

compare favourably to industry averages provides a buffer against unexpected
shocks, said Oigara adding the Bank
now has a bigger headroom to fund
larger and more projects in the East African region.
Standard and Poors Ratings Services

has given the Bank B+/B long-term and
short-term credit rating with a stable
outlook while Moodys has assigned
KCB a rating of B1 stable.
Last year, Kenya rode on a B+ and B1
with a stable outlook assigned by S&P
and Moodys respectively to issue a
highly-sought US$2 Billion sovereign
bond, its first in global markets.
The favourable rating, KCBs management said, gives the bank bigger headroom to borrow funds for expansion
and also affirms its growing role as a
regional lender and a sustainable business.
In their assessment, the agencies said
the rating reflect KCBs credit strength,
solid profitability metrics supported by
strong domestic franchise, strong capital buffers, a well structured depositbased funding model and high level of
liquid assets.
We believe KCB is well placed to maintain its revenue stability in the context
of rising external shocks and weaker
domestic economic growth.
Whilst we anticipate credit losses to rise,
we also expect the Groups access to
low-cost deposits and well established
corporate lending franchise to support
more stable credit losses and stronger
margins than the industry average over
the next 12-18 months, said Standard &
Poors in a statement.
KCB through its six operationsKenya,
Uganda, Tanzania, Rwanda, Burundi
and South Sudanoperates as a diversified financial services provider, and
is active across the East African region,
targeting both retail and wholesale customer segments.
44
KCB CEO ,Joshua Oigara

KCB Group Chief Executive Officer,
Joshua Oigara, said: The verdict by the
two agencies is a clear confirmation of
KCBs story of a strong growth that is
formed around building not only a profitable but also a sustainable business.
We continue to leverage on innovation
to simplify access to financial services,
focus on customer experience and
boosting capital buffers to build an African business for the future. We sit at the
epicenter of shepherding Africas economic transformation agenda.
KCBs strategic initiatives further support growth potential. The Bank has
been strengthening its corporate product offering, management team, IT reliability and capacity in order to improve
customer service and offer a more complete product suite to cross-sell to existing and new clients, said Moodys in
their report.
We expect the Banks capital levels to
remain strong amid a strong internal
capital generation supported by its
strong profitability and a dividend payment ratio of 50% that will support the
Banks domestic and regional growth,
the Moodys report expounded.
In the first half of the year ending June
2015, KCB maintained a strong show
on all prudential ratios with core capital to total risk weighted at 14.6% (CBK
minimum-10.5%), total capital to total risk weighted assets at 15.9% (CBK
minimum-14.5%), core capital to total
deposits at 17.2% (CBK minimum-8%)
and liquidity ratio at 32.2% (CBK minimum-20%).
The ratings come two months after another rating agency Global Credit Ratings, an African-focused rating agency
assigned KCB a stable rating of AA (KE)
and A1+(KE) in the long term and short
term respectivelycurrently the highest rating for a Kenyan bank accorded
by GCR.
KCBs operations are concentrated in
Kenya, but its regional operations are
increasing. In 2014, the Bank derived
about 20% of its revenues and 10% of
total profits before tax from its subsidiaries in the region. The banks loan
portfolio is fairly diversified across sectors, reflecting the diversification of the
East African economy and its buoyant
private sector.
KCB Groups profit before tax grew
13% in the first half of the year ending
June 2015from KShs.11.7 billion to
KShs.13.2 billionriding on increased
earnings from new business lines and
the international business.
The rating agencies said a positive rating action on Kenya could lead to a
similar rating action on KCB, providing
that economic and industry risks are
also improving, the groups geographic
and business diversification strengthens and there is an improvement in the
groups asset quality and loan loss coverage.
We do not rate Kenyan banks above
the sovereign rating because of the direct (high government bonds exposure)
and indirect effects the sovereign would
have on a banks operations in case of a
financial stress said S&P.
KCB Group has been on the forefront in
offering innovative products and solutions that meet the dynamic demands
of customers in the changing world of
technology.
NEWS
Key facts about Co-operatives in Kenya

In Kenya the history of cooperatives
date back to 1908 and has continued to
grow since then;

1908- first Co-operative Society

was established in Kenya, a dairy
Co-operative
1931 Governments first formal

involvement in Cooperatives when
the first Co-operative Ordinance
was enacted to regulate the operations of co-operatives.
1946 -Inclusion of Africans in the

Movement when the colonial government acknowledged that Africans needed to participate in the
economy through co-operatives
resulting in the enactment of a new
Co-operative Societies Ordinance.
1955-African involvement in the

growing of cash crops following the
Swynnerton Plan paved the way for
the formation of more co-operatives.
1932 1969; 1,894 societies had

been registered.
These first co-operatives were Predominantly marketing oriented &

Auxiliary focus,
A Safaricom delegate makes his point during a past ADM.

management of societies, intensification of education and training
for members, committee and staff
with provision of government support staff as supervisors.

Key examples then were Kenya Cooperative Creameries (KCC-1925),

Kenya Planters Co-operative Union
(KPCU-1923) and Kenya Farmers
Association (KFA-1923).
These organizations were originally
registered as companies and only
became registered as co-operatives
in 1931 when the first Co-operative
Ordinance was promulgated.
1965-The sessional paper No. 10 of

1965 on African Socialism gave
impetus to rapid Africanization
of Kenyan economy and poverty
eradication based on principles
similar to those adopted by the cooperative movement.
1970-The first post-independence

Government Co-operative Development Policy was contained
in Sessional Paper No. 8 of 1970
whose main goal was the consolidation of the cooperative activities.
This included improvement of
1975- Another review of the Cooperative Development Policy took

place in which the government
continued to recognize co-operatives as vital organs for mobilizing
material, human and financial resources for national development.
The government reiterated its commitment to pursue and promote
expansion of co-operative activities
in all the productive spheres of the
economy.
1980s The government started implementing Structural Adjustment
Programmes (SAPs) for a market
economy. Sessional Paper No.1 of
1986 on Economic Management
for Renewed Growth, emphasized
the importance of unfettered (free)
private sector led economic development.
The government through Sessional
Paper No. 4 of 1987 on Renewed
Growth through the Co-operative
Movement, reiterated its commitment to enhance the participation
of Kenyans in the economy through

Co-operatives.

The responsibility of organizing

and managing co-operatives was
left to the members and their management committees while the
government played an advisory
role.
The Sessional Paper No. 1 of 1994

on Recovery and sustainable Development to the Year 2010 reaffirmed the need for a private sector
led economy to accelerated and
sustained development.
Through Sessional Paper No. 6 of

1997, on Co-operatives in a Liberalized Economic Environment, the
government reviewed its involvement in the management of cooperatives by providing a legislative
framework under which co-operatives were to survive in a competitive economic environment.
The enactment of the Co-operative Societies Act No. 12 of 1997

removed completely the governments role in the affairs of co-operative societies. This resulted into
a near collapse of the entire co-operative movement in the country.
45
BRIEFS
Coast Sacco in big growth

By Juma Ali
alindi Women Sacco (MAWOSA) has recorded incredible growth over short
period of existence.
The Sacco, currently situated behind

former Malindi Municipal Stadium
in Malindi town, was established to
cater for the needs and the welfare of
women with low income in Malindi
Sub-County and its environs.
The Sacco that was started in 2014,
recently launch Okoa Mama Product that helps its members facing
challenges to top up their loans. It
is geared towards offering quality
services to its members who are all
women.
Speaking in Malindi town, the Saccos chairperson, Havviet Kavumbi
said the Sacco started with only nine
members after realising that women
were threatened by high poverty levels.
Mrs Kavumbi noted that poverty was

a major obstacle towards the members progression and they could not
therefore accomplish personal development.
The chairperson disclosed that before the Sacco was registered, the
members had formed an Association
called Malindi Women Association,
which could not serve its intended
purpose either.
She said that members later decided
to form a full-fledged Sacco, now Malindi Women Sacco with members
drawn from different occupations
and from which a majority have already secured loans.
The Sacco made its by-laws and was
officially registered by the Ministry of
Industrial on October 21, 2014, she
explained.
Farmers oppose new rules

By Felix Njenga
iambu County dairy farmers
have opposed new procurement rules in Co-operative
societies.
The rules suggest that the Treasury

classified Co-operative societies as
public institutions and they are required to follow the Public Procurement and Disposal Act in buying
their products.
The over 10,000 Githunguri Dairy
Farmers Co-operative Society members want orders to stop the implementation of the rules, arguing that
they will give an advantage to their
competitors in the Dairy industry.
Their lawyer Kamau Kuria argues
that the regulations are based on
wrong assumptions that Co-operative societies are public entities
when they are private organisations
run by members.
The co-operative society argues that
the requirement would force it to
provide its confidential business information to rivals.
Barclays records jump in profit

By Hildah Mutugi
arclays Bank of Kenya has reported an 8% increase in profit
after tax for the half year period
ending June 2015. Net profit rose from
Sh4.2 billion in June 2014 to Sh4.6 billion on the back of increased earnings
from non-interest income lines.
Non-Interest income grew by 12% to

Sh4.8 billion from Sh4.3 billion supported by new revenue streams such
as bancassurance.
Total assets grew by 10% to Sh235 billion compared to Sh213 billion in the
corresponding period in the previous
year while impairments remain well
controlled amounting to Sh586 million which is 0.9% of the average gross
46
advances-underscoring the quality of

the asset book.
pressure of declining interest margins.
Highlights of the Financial Results

include: 4% growth in Net interest income growth to Sh10 billion
(2014: Sh9.7 billion) on the strength
of growth in interest earning assets.
10% growth in customer deposits
to Sh163 billion (2014: Sh148 billion)
Strong Core Capital ratios at 16.4%
against a regulatory limit of 10.5%.
Total Capital ratios at 19.0% against a
regulatory limit of 14.5%.
Non-Interest Income went up by 12%

to Sh4.8 billion, up from Sh4.3 billion.
New alternative revenue streams
such as bancassurance, mortgage
and asset finance Centres of excellence contributed to this growth.
Income Net interest income increased by 4% to Sh10 billion, up from

Sh9.7 billion in the same period last
year. This was largely due to growth
in interest earning assets despite the
The Board of Directors approved a

Tier II capital injection in the form
of a USD 50mn (Sh4.5 billion) subordinated loan from Barclays Africa
Group which was drawn down in
the first half of 2015. This led to an
increase in the total capital to risk
weighted assets to 19.0% which strategically positions the Bank for future
growth.
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47
BANKING
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www.chasebankkenya.co.ke
We understand that collaboration and team work are essential for the growth of your
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Enjoy personalized services with our Ushirika Accounts as well as co-branded cheque
books and debit cards for all SACCO members!
Open an account today and let us enable you achieve what matter most to you.

48
atyourservice@chasebank.co.ke
0722 121431|0709 800000

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THE

OCTOBER - NOVEMBER, 2015 | KSh 200

Stima Sacco, Chase Bank

SASRA turns heat on

Should Saccos invest

OCTOBER - NOVEMBER, 2015| Sacco Times

P.O. Box 295, Mumias

Nitunze Savings and Credit

OCTOBER - NOVEMBER, 2015 | KSh 200

Stima Sacco, Chase Bank

SASRA turns heat on

Should Saccos invest

OCTOBER - NOVEMBER, 2015| Sacco Times

Stegro Sacco members reap big from new products

Kirinyaga Matatu Sacco ups game to beat competition 10

Why Sacco AGMs are crucial

Asili Sacco lives up to its vision 14

Chai Sacco to train youth groups 16

DISTRIBUTION AND CIRCULATION

Kenversity holds Special General Meeting

Waumini Sacco conquers new heights

Nitunze Sacco picks new board to boost service delivery 22

Murata Sacco unveils cheque book

State borrows heavily as interest rises

Equity Bank CEO scoops top award

Family Bank floats shares to boost capital base

State to review CBK laws

Stima Sacco partners with Chase Bank to aid contractors 38

Sukari Sacco set to re-brand

Understanding Treasury Bills

KCB earns accolades for business acumen

OCTOBER - NOVEMBER, 2015| Sacco Times

Saccos must adhere to SASRA rules

stipulated by the regulator, the Sacco Societies

The Sacco managers are aware that the principal

Today, the Savings and Credit Societies (Sacco) is

By failing to adhere to the rules, the managers of

Stima Sacco National Chairman, Dr Ben Chumo and

OCTOBER - NOVEMBER, 2015 | Sacco Times

SASRA blacklists 5 Saccos

According to SASRA acting Chief

John Nthuku, SASRA Board Chairman.

But speaking to a local daily Urithi

The five Saccos were

NTSAs move comes as details

OCTOBER - NOVEMBER, 2015| Sacco Times

Stegro Sacco members reap

Its pioneer farmers were mostly those

fordable financial and other diversified services in Kenya.

The Stegro Sacco headquarters.

ing balance at a maximum of Sh20,000.

Stegro Sacco members waiting to be served in a banking hall.

Some of the Stegro Sacco projects / investments.

Stegro Sacco members reap big from new products

Its share per capital has also grown from

Last year the Sacco managed to loan

which include business loan, microcredit and motorbike loans.

Part of Stegro sacco investments

OCTOBER - NOVEMBER, 2015 | Sacco Times

Over 10,000 members have registered

STEGRO SACCO LTD

FOSA PRODUCTS AND