Corporate News
Saccos target members for fresh capital
Stima Sacco members during an AGM at Stima Sports Club in Ruaraka, Nairobi. Saccos will provide a business plan including financial projections over the 3-4 years showing how they will meet the various financial standards including investment, liquidity, capital and asset quality. Photo/FREDRICK ONYANGO
Posted Friday, July 16 2010 at 00:00
Saccos will have to file monthly reports with the authority, indicating their adherence to prudent guidelines.
An just like in the banking sector Saccos will not be allowed to charge interest on a delinquent loan exceeding the Principal owed when the loan became delinquent.
Entry fee
Sacco managers said the ending Sacco’s low interest rate lending will deny them the competitive edge in the marketplace, making them vulnerable to competition from commercial banks’ recent foray into the low end of the market––a move that is set to accelerate with the advent of agency banking.
As Saccos face compliance, they are also likely to raise their entry fee or membership fee in a bid to boost their accounts.
“We are encouraging members to reinvest part of the dividends. In the last fiscal year, they reinvested 60 per cent of dividends. By reinvesting, we should be in a very strong position over the next six years,” said Mr Ken Odire, the treasurer of Maisha Bora Sacco in a previous interview.
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